President Joe Biden said Monday over 100 million economic impact payments will have been delivered to Americans within the next 10 days.
The cash payments, amounting to $1,400 for most recipients, are part of the American Rescue Plan that Biden signed into law last Thursday.
Over 158 million households are expected to receive the cash payments, with people earning less than $75,000 eligible to receive the full $1,400 amount, which ramps down to zero at incomes of $80,000 and above.
“By the time all the money is distributed, 85 percent of American households will have gotten a $1,400 rescue checks,” Biden said.
The economic impact payments (EIP), as the stimulus checks were formally known, were shielded from garnishment under previous COVID-19 rescue bills. But the American Rescue Plan, which President Joe Biden signed into law on March 11, does not explicitly prevent debt collectors from seizing those funds.
The American Rescue Plan does not explicitly prevent garnishment since it was passed via the budget reconciliation process. Democrats advanced the bill through Congress through reconciliation, which allowed them to pass the bill without having to win over Republicans, who opposed the bill as wasteful and packed with spending priorities unrelated to the pandemic.
“Allowing economic impact payments to be garnished could impose significant burdens on some families, especially those in communities of color, facing unprecedented circumstances,” the organizations wrote, adding that depository institutions—and even many debt collectors—believe the stimulus checks should be exempt from garnishment.
Unless Congress passes a standalone bill to close the loophole, deposit-taking institutions like banks and credit unions will be forced to comply with garnishment orders and will have to pay some creditors who try to freeze bank accounts and seize owed funds.
Sen. Ron Wyden (D-Ore.) chairman of the Senate Finance Committee, said in a statement that he plans to introduce a standalone bill that would shield the money from debt collectors.