Title: 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.
Policy area: Finance and Financial Sector

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.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6850 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
                                H. R. 6850

  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.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              May 13, 2020

 Mr. Meeks (for himself, Ms. Pressley, and Ms. Waters) introduced the 
following bill; which was referred to the Committee on Ways and Means, 
and in addition to the Committee on Financial Services, for a period to 
      be subsequently determined by the Speaker, in each case for 
consideration of such provisions as fall within the jurisdiction of the 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
  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.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act have been cited as the ``Protect our Checks Act of 2020''.

SEC. 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) 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 ``Reduction 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 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' means a natural person whose name 
                        appears in a financial institution's records as 
                        the direct or beneficial owner of an account.
                            ``(ii) Account review.--The term `account 
                        review' means the process of examining deposits 
                        in an account to determine if an applicable 
                        payment has been deposited 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 
                        section 212.6 of such title 31.
                            ``(iii) Applicable payment.--The term 
                        `applicable payment' means any payment of 
                        credit or refund by reason of section 6428 of 
                        the Internal Revenue Code of 1986 or subsection 
                        (c).
                            ``(iv) Garnishment.--The term `garnishment' 
                        means execution, levy, attachment, 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 municipality or municipal 
                        corporation to effect a garnishment against a 
                        debtor.
                            ``(vi) Lookback period.--The term `lookback 
                        period' means the two month period 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 
                        corresponding 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.
                    (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'' 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 Deposit Insurance Act.
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