Some Americans in Debt May Not Receive Stimulus Fund

Part of the $ 2,000 billion coronavirus stimulus package includes one-time cash payments of up to $ 1,200 to Americans from the federal government.

But a loophole in the law could prevent you from seeing the money if you have a student loan or credit card debt.

In an audio leak obtained by the American Prospect, Ronda Kent – director of disbursements at the Treasury Department’s tax services office, appears to be giving banks the green light to use the stimulus as a means of collecting debt.

“If a recipient of a federal payment owes an overdue debt that has been submitted to the Consolidated Revenue Fund for collection, we will intercept that payment to repay the debt,” Kent said on the recording.

The stimulus money is intended to provide millions of Americans with emergency financial assistance during the pandemic. Congresswoman Judy Chu and 36 other members of Congress on Thursday sent a letter to Treasury Secretary Steve Mnuchin stressing that the big banks do not need additional liquidity at the expense of taxpayers.

“That’s why we’ve made it an automatic program so that this money comes in without anyone asking for it first, so it’s important that it gets to everyone right now, because people are trying to bring the two together. tips, ”Chu said.

RELATED: Why some stimulus checks may have gone to the wrong accounts

Eyewitness News reached out to Wells Fargo, JP Morgan Chase, Bank of America and US Bank who all said they have taken steps to give customers access to the stimulus money. Wells Fargo says they are suspending collecting negative balances from customers receiving checks for 30 days, but Chu says it’s too short.

“We have to relieve people for at least a few months because we know that so many people are going to take a long time to get back on their feet,” Chu said.

The National Consumer Law Center recommends that anyone who is waiting for a stimulus check to closely monitor their bank account and withdraw the money immediately after it appears by direct deposit.

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