(1) IN
GENERAL.—Section 2201(d) of the 
CARES Act (Public Law 116–136) is amended— 
(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 ‘‘REDUC-
TION OR OFFSET’’ and inserting ‘‘REDUCTION, 
OFFSET, GARNISHMENT, ETC.’’; 
(C) by striking ‘‘Any credit’’ and inserting 
the following: 
‘‘(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 per-
son 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 pay-
ment that is paid electronically by direct deposit 
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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 in-
stitution to identify the payment as a payment 
protected under subparagraph (A). The Sec-
retary shall further encode the payment pursu-
ant 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 re-
ceipt of a garnishment order that applies 
to an account that has received an applica-
ble payment that is encoded as provided in 
subparagraph (B), a financial institution 
shall follow the requirements and proce-
dures set forth in part 212 of title 31, 
Code of Federal Regulations, except a fi-
nancial 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 para-
graph shall not alter the status of pay-
ments as tax refunds or other nonbenefit 
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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 finan-
cial 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 pro-
vided in subparagraph (B) has been depos-
ited electronically or by check on any date 
in the lookback period, the financial insti-
tution, 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 pay-
ment, as exempt under law from a garnish-
ment order without requiring the consent 
of the party serving the garnishment order 
or the judgment creditor. 
‘‘(iii) LIABILITY.—A financial institu-
tion that acts in good faith in reliance on 
clause (i) or (ii) shall not be subject to li-
ability or regulatory action under any Fed-
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eral or State law, regulation, court or other 
order, or regulatory interpretation for ac-
tions concerning any applicable payments. 
‘‘(D) DEFINITIONS.—For purposes of this 
paragraph: 
‘‘(i) ACCOUNT
HOLDER.—The term 
‘account holder’ means a natural person 
whose name appears in a financial institu-
tion’s records as the direct or beneficial 
owner of an account. 
‘‘(ii) ACCOUNT
REVIEW.—The term 
‘account review’ means the process of ex-
amining deposits in an account to deter-
mine if an applicable payment has been de-
posited into the account during the 
lookback period. A financial institution 
shall perform an account review following 
the procedures outlined in section 212.5 of 
title 31, Code of Federal Regulations, and 
in accordance with the requirements of sec-
tion 212.6 of such title 31. 
‘‘(iii) APPLICABLE
PAYMENT.—The 
term ‘applicable payment’ means any pay-
ment of credit or refund by reason of sec-
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tion 6428 of the Internal Revenue Code of 
1986 or subsection (c). 
‘‘(iv) GARNISHMENT.—The term ‘gar-
nishment’ means execution, levy, attach-
ment, garnishment, or other legal process. 
‘‘(v) 
GARNISHMENT
ORDER.—The 
term ‘garnishment order’ means a writ, 
order, notice, summons, judgment, levy, or 
similar written instruction issued by a 
court, a State or State agency, or a mu-
nicipality or municipal corporation to effect 
a garnishment against a debtor. 
‘‘(vi) LOOKBACK PERIOD.—The term 
‘lookback period’ means the two month pe-
riod that begins on the date preceding the 
date of an account review and ends on the 
corresponding date of the month two 
months earlier, or on the last date of the 
month two months earlier if the cor-
responding date does not exist.’’. 
(2) EFFECTIVE DATE.— 
(A) IN GENERAL.—Section 2201(d)(2) of 
the CARES Act, as added by subsection (a), 
shall take effect upon enactment. 
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(B) EXCEPTION.—Notwithstanding para-
graph (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 en-
actment of this Act. 
(b) PROHIBITION ON USE OF COVID-19 STIMULUS 
PAYMENTS AS OFFSET BY CREDIT UNIONS AND DEPOSI-
TORY 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 alleg-
edly due, to the credit union or depository institu-
tion. 
(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) net-
work, the Secretary of the Treasury shall issue a 
COVID–19 stimulus payment using a unique identi-
fier that is reasonably sufficient to allow a credit 
union or depository institution to identify the pay-
ment as a payment protected under paragraph (1). 
(3) DEFINITIONS.—In this subsection: 
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(A) COVID–19 STIMULUS PAYMENT.—The 
term ‘‘COVID–19 stimulus payment’’ means 
any payment made pursuant to section 6428 of 
the Internal Revenue Code of 1986 or section 
2201(c) of the CARES Act. 
(B) CREDIT
UNION.—The term ‘‘credit 
union’’ means a Federal credit union and a 
State credit union, as such terms are defined, 
respectively, under section 101 of the Federal 
Credit Union Act. 
(C) DEPOSITORY INSTITUTION.—The term 
‘‘depository institution’’ has the meaning given 
that term under section 3 of the Federal De-
posit Insurance Act. 
Æ 
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