FDIC COVID Consumer 27 – Garnishment. Are Economic Impact payments subject to garnishment?

Compliance > COVID & Pandemic-Related
Q:   Garnishment. Are Economic Impact payments subject to garnishment?
 
A:   Specific exemptions apply prohibiting garnishment of economic impact funds, such as for federal garnishment orders (CARES Act), certain federal benefits payments, certain unemployment benefits (state law), and student loan debt (CARES Act). Absent additional guidance or clarification from the U.S. Department of Treasury, Economic Impact payments may otherwise be garnished in accordance with garnishment orders currently in force. For example, payments may be garnished to provide child support pursuant to a court order. COVID-19 related developments continue to evolve. We recommend that you monitor the U.S. Treasury Department’s website in the event it issues any new information addressing garnishment protections regarding economic impact payments. Some states and local jurisdictions have suspended enforcement of certain garnishment orders, and banks are encouraged to monitor developments from local and state jurisdictions.
 
 
This Q&A was contained in the Frequently Asked Questions for Financial Institutions Affected by the Coronavirus Disease 2019 (Referred to as COVID-19) – As of March 3, 2021 (which may be updated from time to time).  This may be found on the FDIC’s website here:  https://www.fdic.gov/Coronavirus/faq-fi.pdf.
 

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