116TH CONGRESS 

2D SESSION S. 3841 

AN ACT 

To protect 2020 recovery rebates for individuals from 

assignment or garnishment, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 
2 

†S 3841 ES

1 SECTION 1. PROTECTION OF 2020 RECOVERY REBATES. 

2 (a) IN GENERAL.—Subsection (d) of section 2201 of 

3 the CARES Act (Public Law 116–136) is amended— 

4 (1) by redesignating paragraphs (1), (2), and 

5 (3) as subparagraphs (A), (B), and (C), and by mov6 ing such subparagraphs 2 ems to the right, 

7 (2) by striking ‘‘REDUCTION OR OFFSET.—Any 

8 credit’’ and inserting ‘‘REDUCTION, OFFSET, GAR9 NISHMENT, ETC.— 

10 ‘‘(1) IN GENERAL.—Any credit’’, and 

11 (3) by adding at the end the following new 

12 paragraphs: 

13 ‘‘(2) ASSIGNMENT OF BENEFITS.— 

14 ‘‘(A) IN GENERAL.—The right of any per15 son to any applicable payment shall not be 

16 transferable or assignable, at law or in equity, 

17 and no applicable payment shall be subject to, 

18 execution, levy, attachment, garnishment, or 

19 other legal process, or the operation of any 

20 bankruptcy or insolvency law. 

21 ‘‘(B) ENCODING OF PAYMENTS.—As soon 

22 as practicable, but not earlier than 10 days 

23 after the date of the enactment of this para24 graph, in the case of an applicable payment 

25 that is paid electronically by direct deposit 

26 through the Automated Clearing House (ACH) 
3 

†S 3841 ES

1 network, the Secretary of the Treasury (or the 

2 Secretary’s delegate) shall— 

3 ‘‘(i) issue the payment using a unique 

4 identifier that is reasonably sufficient to 

5 allow a financial institution to identify the 

6 payment as an applicable payment, and 

7 ‘‘(ii) further encode the payment pur8 suant to the same specifications as re9 quired for a benefit payment defined in 

10 section 212.3 of title 31, Code of Federal 

11 Regulations. 

12 ‘‘(C) GARNISHMENT.— 

13 ‘‘(i) ENCODED PAYMENTS.—In the 

14 case of a garnishment order received after 

15 the date that is 10 days after the date of 

16 the enactment of this paragraph and that 

17 applies to an account that has received an 

18 applicable payment that is encoded as pro19 vided in subparagraph (B), a financial in20 stitution shall follow the requirements and 

21 procedures set forth in part 212 of title 

22 31, Code of Federal Regulations, except a 

23 financial institution shall not, with regard 

24 to any applicable payment, be required to 

25 provide the notice referenced in sections 
4 

†S 3841 ES

1 212.6 and 212.7 of title 31, Code of Fed2 eral Regulations. This paragraph shall not 

3 alter the status of applicable payments as 

4 tax refunds or other nonbenefit payments 

5 for purpose of any reclamation rights of 

6 the Department of Treasury or the Inter7 nal Revenue Service as per part 210 of 

8 title 31 of the Code of Federal Regula9 tions. 

10 ‘‘(ii) OTHER PAYMENTS.—If a finan11 cial institution receives a garnishment 

12 order, other than an order that has been 

13 served by the United States or an order 

14 that has been served by a Federal, State, 

15 or local child support enforcement agency, 

16 that has been received by a financial insti17 tution after the date that is 10 days after 

18 the date of the enactment of this para19 graph and that applies to an account into 

20 which an applicable payment that has not 

21 been encoded as provided in subparagraph 

22 (B) has been deposited electronically or by 

23 an applicable payment that has been de24 posited by check on any date in the 

25 lookback period, the financial institution, 
5 

†S 3841 ES

1 upon the request of the account holder, 

2 shall treat the amount of the funds in the 

3 account at the time of the request, up to 

4 the amount of the applicable payment (in 

5 addition to any amounts otherwise pro6 tected under part 212 of title 31, Code of 

7 Federal Regulations), as exempt from a 

8 garnishment order without requiring the 

9 consent of the party serving the garnish10 ment order or the judgment creditor. 

11 ‘‘(iii) LIABILITY.—A financial institu12 tion that acts in good faith in reliance on 

13 clauses (i) or (ii) shall not be subject to li14 ability or regulatory action under any Fed15 eral or State law, regulation, court or other 

16 order, or regulatory interpretation for ac17 tions concerning any applicable payments. 

18 ‘‘(D) DEFINITIONS.—For purposes of this 

19 paragraph— 

20 ‘‘(i) ACCOUNT HOLDER.—The term 

21 ‘account holder’ means a natural person 

22 whose name appears in a financial institu23 tion’s records as the direct or beneficial 

24 owner of an account. 
6 

†S 3841 ES

1 ‘‘(ii) ACCOUNT REVIEW.—The term 

2 ‘account review’ means the process of ex3 amining deposits in an account to deter4 mine if an applicable payment has been de5 posited into the account during the 

6 lookback period. The financial institution 

7 shall perform the account review following 

8 the procedures outlined in section 212.5 of 

9 title 31, Code of Federal Regulations and 

10 in accordance with the requirements of sec11 tion 212.6 of title 31, Code of Federal 

12 Regulations. 

13 ‘‘(iii) APPLICABLE PAYMENT.—The 

14 term ‘applicable payment’ means any pay15 ment of credit or refund by reason of sec16 tion 6428 of the Internal Revenue Code of 

17 1986 (as so added) or by reason of sub18 section (c) of this section. 

19 ‘‘(iv) GARNISHMENT.—The term ‘gar20 nishment’ means execution, levy, attach21 ment, garnishment, or other legal process. 

22 ‘‘(v) GARNISHMENT ORDER.—The 

23 term ‘garnishment order’ means a writ, 

24 order, notice, summons, judgment, levy, or 

25 similar written instruction issued by a 
7 

†S 3841 ES

1 court, a State or State agency, a munici2 pality or municipal corporation, or a State 

3 child support enforcement agency, includ4 ing a lien arising by operation of law for 

5 overdue child support or an order to freeze 

6 the assets in an account, to effect a gar7 nishment against a debtor. 

8 ‘‘(vi) LOOKBACK PERIOD.—The term 

9 ‘lookback period’ means the two month pe10 riod that begins on the date preceding the 

11 date of account review and ends on the 

12 corresponding date of the month two 

13 months earlier, or on the last date of the 

14 month two months earlier if the cor15 responding date does not exist.’’. 

16 (b) EFFECTIVE DATE.—The amendments made by 

17 this section shall take effect on the date of the enactment 

18 of this Act. 

Passed the Senate July 23, 2020. 

Attest: 

Secretary. 
116TH CONGRESS 

2D SESSION S. 3841 

AN ACT 

To protect 2020 recovery rebates for individuals 

purposes. from assignment or garnishment, and for other