SEE: Your Coronavirus Check Is Coming. Your Bank Can Grab It. (American Prospect)
WASHINGTON D.C. – Explosive audio obtained by the American Prospect reveals the U.S. Treasury Department gave banks the “green light” to seize stimulus check money from customers with outstanding debt — a callous and counterproductive move that could keep critical food, rent and medicine money out of the hands of Americans in most dire need.
And in what has been called a ‘legislative oversight,’ the $1,200 stimulus checks established in the CARES Act for Americans struggling in the health crisis did not include protections prohibiting the debt collection industry from withholding those funds, much like Social Security checks. Attorneys general from 26 states and a bipartisan group of U.S. senators have urged U.S. Treasury Secretary Steve Mnuchin to use his authority to swiftly correct the oversight to ensure that American families receive their relief checks without interference from debt collectors trying to cash in on the COVID-19 crisis.
“After a third of U.S. renters couldn’t make rent this month, the Treasury Department is pointing out opportunities for banks and debt collectors to steal Americans’ relief checks out from under them,” said Jeremy Funk, spokesperson for Allied Progress. “It’s the middle of a pandemic. This money should be going toward food, rent, and medicine — it’s not the time to hand out favors to debt collection industry donors or pad some big bank’s bottom line. Secretary Mnuchin needs to ensure that these $1,200 checks go straight into Americans pockets where they belong.”
Why Is Mnuchin Doing Favors for the Debt Collection Industry at Struggling Workers’ Expense? Allied Progress recently released an analysis showing the debt collection industry trade groups have spent over $2.1 million on federal lobbying since Trump took office, and debt collectors have donated over $343,000 to Republican political campaigns since 2016. That followed Allied Progress’ report spotlighting the history of consumer abuse from some of the debt collection industry’s biggest players.