Protect our Checks Act of 2020

To protect stimulus checks from garnishment and fees and from being used as an offset by a credit union or depository institution, and for other purposes. 1. Short title This Act have been cited as the Protect our Checks Act of 2020 2. Protecting stimulus checks from garnishment and fees (a) Protection of 2020 recovery rebates (1) In general Section 2201(d) of the CARES Act ( Public Law 116–136 (A) by redesignating paragraphs (1), (2), and (3) as subparagraphs (A), (B), and (C), and by moving such subparagraphs 2 ems to the right; (B) in the heading, by striking reduction or offset reduction, offset, garnishment, etc. (C) by striking Any credit (1) In general Any credit ; and (D) by adding at the end the following new paragraphs: (2) Assignment of benefits (A) In general The right of any person to any applicable payment shall not be transferable or assignable, at law or in equity, and no applicable payment shall be subject to execution, levy, attachment, garnishment, or other legal process or the operation of any bankruptcy or insolvency law. (B) Encoding of payments As soon as practicable, in the case of an applicable payment that is paid electronically by direct deposit through the Automated Clearing House (ACH) network, the Secretary of the Treasury shall issue the payment using a unique identifier that is reasonably sufficient to allow a financial institution to identify the payment as a payment protected under subparagraph (A). The Secretary shall further encode the payment pursuant to the same specifications as required for a benefit payment (as defined in section 212.3 of section 31, Code of Federal Regulations). (C) Garnishment (i) Encoded payments Upon receipt of a garnishment order that applies to an account that has received an applicable payment that is encoded as provided in subparagraph (B), a financial institution shall follow the requirements and procedures set forth in part 212 of title 31, Code of Federal Regulations, except a financial institution shall not, with regard to any applicable payment, be required to provide the notice referenced in section 212.6 or 212.7 of such title 31. This paragraph shall not alter the status of payments as tax refunds or other nonbenefit payments for purpose of any reclamation rights of the Department of Treasury or the Internal Revenue Service as per part 210 of such title 31. (ii) Other payments If a financial institution receives a garnishment order, other than an order that has been served by the United States, that applies to an account into which an applicable payment that has not been encoded as provided in subparagraph (B) has been deposited electronically or by check on any date in the lookback period, the financial institution, upon the request of the account holder, shall treat the amount of the funds in the account at the time of the request, up to the amount of the applicable payment, as exempt under law from a garnishment order without requiring the consent of the party serving the garnishment order or the judgment creditor. (iii) Liability A financial institution that acts in good faith in reliance on clause (i) or (ii) shall not be subject to liability or regulatory action under any Federal or State law, regulation, court or other order, or regulatory interpretation for actions concerning any applicable payments. (D) Definitions For purposes of this paragraph: (i) Account holder The term account holder (ii) Account review The term account review (iii) Applicable payment The term applicable payment section 6428 (iv) Garnishment The term garnishment (v) Garnishment order The term garnishment order (vi) Lookback period The term lookback period . (2) Effective date (A) In general Section 2201(d)(2) of the CARES Act, as added by subsection (a), shall take effect upon enactment. (B) Exception Notwithstanding paragraph (1), clauses (i) and (ii) of section 2201(d)(2)(C) of the CARES Act, as added by subsection (a), shall take effect after the end of the 10-day period beginning on the date of enactment of this Act. (b) Prohibition on use of COVID-19 stimulus payments as offset by credit unions and depository institutions (1) In general A credit union or depository institution may not offset or seize a COVID–19 stimulus payment to pay any amount due, or allegedly due, to the credit union or depository institution. (2) Encoding of payments As soon as practicable, in the case of a COVID–19 stimulus payment that is paid electronically by direct deposit through the Automated Clearing House (ACH) network, the Secretary of the Treasury shall issue a COVID–19 stimulus payment using a unique identifier that is reasonably sufficient to allow a credit union or depository institution to identify the payment as a payment protected under paragraph (1). (3) Definitions In this subsection: (A) COVID–19 stimulus payment The term COVID–19 stimulus payment section 6428 (B) Credit union The term credit union (C) Depository institution The term depository institution

Summary: Protect our Checks Act of 2020 This bill prohibits the transference or assignment of a 2020 recovery rebate by legal process, including attachment, levy, or garnishment. Additionally, credit unions and depository institutions are prohibited from seizing a rebate to pay an amount due to them. A 2020 recovery rebate is a stimulus payment made to individual taxpayers and their dependents who have been affected by the COVID-19 (i.e., coronavirus disease 2019) pandemic.