II 

116TH CONGRESS 

2D SESSION S. 3841 

To protect 2020 recovery rebates for individuals from assignment or 

garnishment, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 21, 2020 

Mr. GRASSLEY (for himself, Mr. BROWN, Mr. WYDEN, and Mr. SCOTT of 

South Carolina) introduced the following bill; which was read twice and 

referred to the Committee on Finance 

A BILL 

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, 

3 SECTION 1. PROTECTION OF 2020 RECOVERY REBATES. 

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

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

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

7 (3) as subparagraphs (A), (B), and (C), and by mov8 ing such subparagraphs 2 ems to the right, 


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

2 credit’’ and inserting ‘‘REDUCTION, OFFSET, GAR3 NISHMENT, ETC.— 

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

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

6 paragraphs: 

7 ‘‘(2) ASSIGNMENT OF BENEFITS.— 

8 ‘‘(A) IN GENERAL.—The right of any per9 son to any applicable payment shall not be 

10 transferable or assignable, at law or in equity, 

11 and no applicable payment shall be subject to, 

12 execution, levy, attachment, garnishment, or 

13 other legal process, or the operation of any 

14 bankruptcy or insolvency law. 

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

16 as practicable, but not earlier than 10 days 

17 after the date of the enactment of this para18 graph, in the case of an applicable payment 

19 that is paid electronically by direct deposit 

20 through the Automated Clearing House (ACH) 

21 network, the Secretary of the Treasury (or the 

22 Secretary’s delegate) shall— 

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

24 identifier that is reasonably sufficient to 


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1 allow a financial institution to identify the 

2 payment as an applicable payment, and 

3 ‘‘(ii) further encode the payment pur4 suant to the same specifications as re5 quired for a benefit payment defined in 

6 section 212.3 of title 31, Code of Federal 

7 Regulations. 

8 ‘‘(C) GARNISHMENT.— 

9 ‘‘(i) ENCODED PAYMENTS.—In the 

10 case of a garnishment order received after 

11 the date that is 10 days after the date of 

12 the enactment of this paragraph and that 

13 applies to an account that has received an 

14 applicable payment that is encoded as pro15 vided in subparagraph (B), a financial in16 stitution shall follow the requirements and 

17 procedures set forth in part 212 of title 

18 31, Code of Federal Regulations, except a 

19 financial institution shall not, with regard 

20 to any applicable payment, be required to 

21 provide the notice referenced in sections 

22 212.6 and 212.7 of title 31, Code of Fed23 eral Regulations. This paragraph shall not 

24 alter the status of applicable payments as 

25 tax refunds or other nonbenefit payments 


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1 for purpose of any reclamation rights of 

2 the Department of Treasury or the Inter3 nal Revenue Service as per part 210 of 

4 title 31 of the Code of Federal Regula5 tions. 

6 ‘‘(ii) OTHER PAYMENTS.—If a finan7 cial institution receives a garnishment 

8 order, other than an order that has been 

9 served by the United States or an order 

10 that has been served by a Federal, State, 

11 or local child support enforcement agency, 

12 that has been received by a financial insti13 tution after the date that is 10 days after 

14 the date of the enactment of this para15 graph and that applies to an account into 

16 which an applicable payment that has not 

17 been encoded as provided in subparagraph 

18 (B) has been deposited electronically or by 

19 an applicable payment that has been de20 posited by check on any date in the 

21 lookback period, the financial institution, 

22 upon the request of the account holder, 

23 shall treat the amount of the funds in the 

24 account at the time of the request, up to 

25 the amount of the applicable payment (in 


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1 addition to any amounts otherwise pro2 tected under part 212 of title 31, Code of 

3 Federal Regulations), as exempt from a 

4 garnishment order without requiring the 

5 consent of the party serving the garnish6 ment order or the judgment creditor. 

7 ‘‘(iii) LIABILITY.—A financial institu8 tion that acts in good faith in reliance on 

9 clauses (i) or (ii) shall not be subject to li10 ability or regulatory action under any Fed11 eral or State law, regulation, court or other 

12 order, or regulatory interpretation for ac13 tions concerning any applicable payments. 

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

15 paragraph— 

16 ‘‘(i) ACCOUNT HOLDER.—The term 

17 ‘account holder’ means a natural person 

18 whose name appears in a financial institu19 tion’s records as the direct or beneficial 

20 owner of an account. 

21 ‘‘(ii) ACCOUNT REVIEW.—The term 

22 ‘account review’ means the process of ex23 amining deposits in an account to deter24 mine if an applicable payment has been de25 posited into the account during the 


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1 lookback period. The financial institution 

2 shall perform the account review following 

3 the procedures outlined in section 212.5 of 

4 title 31, Code of Federal Regulations and 

5 in accordance with the requirements of sec6 tion 212.6 of title 31, Code of Federal 

7 Regulations. 

8 ‘‘(iii) APPLICABLE PAYMENT.—The 

9 term ‘applicable payment’ means any pay10 ment of credit or refund by reason of sec11 tion 6428 of the Internal Revenue Code of 

12 1986 (as so added) or by reason of sub13 section (c) of this section. 

14 ‘‘(iv) GARNISHMENT.—The term ‘gar15 nishment’ means execution, levy, attach16 ment, garnishment, or other legal process. 

17 ‘‘(v) GARNISHMENT ORDER.—The 

18 term ‘garnishment order’ means a writ, 

19 order, notice, summons, judgment, levy, or 

20 similar written instruction issued by a 

21 court, a State or State agency, a munici22 pality or municipal corporation, or a State 

23 child support enforcement agency, includ24 ing a lien arising by operation of law for 

25 overdue child support or an order to freeze 


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1 the assets in an account, to effect a gar2 nishment against a debtor. 

3 ‘‘(vi) LOOKBACK PERIOD.—The term 

4 ‘lookback period’ means the two month pe5 riod that begins on the date preceding the 

6 date of account review and ends on the 

7 corresponding date of the month two 

8 months earlier, or on the last date of the 

9 month two months earlier if the cor10 responding date does not exist.’’. 

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

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

13 of this Act. 

Æ 


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