by Jeff Sovern
In an April 16 letter, ACA International, which describes itself as "The Association of Credit and Collection Professionals," complained that "Advocacy organizations have made several recent claims that, 'debt collectors are eager to garnish [stimulus] payments – threatening families’ access to food, shelter, and medicine, and endangering public health.'” I'm not sure where the quote in the letter is from–ACA doesn't say, though the letter includes citations to some other statements–but the letter goes on to say "This narrative is inaccurate and shows a clear misunderstanding of the garnishment process and the work of the debt collection industry in general." On the second page, the ACA letter states (I've added emphasis to highlight items that I return to below):
[T]he chance of funds from a stimulus check being subject to a new proceeding or being garnished as a result of a new action taken by the debt collection industry would be extremely rare. This is probably why Congress in its thoughtful determination of who should receive public money and under what circumstances in the Coronavirus Aid, Relief, and Economic Security (CARES Act), did not identify this issue as requiring additional legislative attention. Furthermore, any problems for consumers that arise could be more easily solved through a conversation, rather than in complex legislation. In the rare event that stimulus funds are garnished, consumers have ample opportunity to have those funds returned, particularly if they have been directly impacted by COVID-19.
Notice the use of the word "new" twice in the first sentence in that paragraph. Consumers who lose their stimulus to pre-existing proceedings or garnishment orders have still lost their funds, and thus, in many cases, the ability to obtain food and other necessities. Nor is it clear how "rare" it is for stimulus funds to be garnished. According to the Washington Post, there have already been reports of such garnishments. But if such garnishments are indeed rare, collectors shouldn't lose anything by agreeing to legislation to ban them. As for the opportunity to have the funds returned, is the ACA committing in its letter that if a stimulus payment is somehow seized by a collector, the collector will return it upon request?
ACA, please join the National Creditors Bar Association in supporting the exemption of stimulus payments from garnishment. Wells Fargo and the Bank of America have also said they won't seize the payments. Your letter says "During this critical time, ACA members remain committed to assisting consumers." Prove it by endorsing rules that would prevent the seizure of stimulus funds from those who need that money to pay for the necessities of life.