Brown, Hawley Call On Mnuchin To Ensure That Direct Payments Go To Hardworking Americans Not To Predatory Debt Collectors

U.S. Sen. Sherrod Brown (D-OH), Ranking Member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, and Senator Josh Hawley (R-MO) today sent a letter to Secretary Mnuchin urging him to act immediately to ensure that Americans receive the full amount of their direct payments, provided for by Congress in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. The Senators in their letter made clear that Treasury must use every available tool to ensure that hardworking American families get their full payments to pay for necessities like food and medicine instead of going to debt collectors seeking to settle past debts.

“If Treasury fails to take action, the CARES Act direct payments are at risk of being seized by debt collectors. That is not what Congress intended. We came together to pass the CARES Act to help American families pay for food, medicine, and other basic necessities during this crisis. To carry out Congress’s intent and ensure that American families receive the help they need, we ask that you immediately exercise your authority to protect these payments from private debt collectors,” wrote the Senators.

Today’s bipartisan push builds on Brown’s recent push to get Treasury to end the garnishment of direct stimulus payments.

A copy of the letter is here and below:

The Honorable Steven Mnuchin

Secretary

Department of Treasury

Dear Secretary Mnuchin:

We write to request that the Department of Treasury (Treasury) take immediate action to ensure that American families receive the full amount of the direct payments Congress provided for in the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Congress included this critical relief in order to help American families struggling to pay for food, medicine, and other basic necessities during the novel coronavirus-19 (COVID-19) pandemic and resulting economic crisis.

Under Section 2201 of the CARES Act, Congress provided for “recovery rebates” of up to $1,200 for qualifying individuals, along with an additional $500 per dependent child, to mitigate the financial blow of COVID-19 on our families and economy. To ensure that American families receive the full amount of this intended relief, the CARES Act does not allow for the payment amount to be reduced, or “offset,” for past tax debts or other debts owed to federal or state governments.^[1] The only offset that Congress allowed is for past due child support payments.^[2]

Treasury has the authority—and must exercise it—to also protect CARES Act direct payments from being seized to satisfy garnishment orders for private debts (except for child support payments). Under current Treasury rules, two months of Social Security, Supplemental Security Income, and other federal payments are protected from being garnished by private debt collectors.^[3] Treasury can also apply this rule to protect the CARES Act direct payments from private debt collectors. Alternatively, Treasury can exercise the authority provided under Section 2201(h) of the CARES Act to issue new rules or guidance to protect the direct payments from private debt collectors.^[4]

If Treasury fails to take action, the CARES Act direct payments are at risk of being seized by debt collectors. That is not what Congress intended. We came together to pass the CARES Act to help American families pay for food, medicine, and other basic necessities during this crisis. To carry out Congress’s intent and ensure that American families receive the help they need, we ask that you immediately exercise your authority to protect these payments from private debt collectors.

Thank you for your attention to this important matter.

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