“We are temporarily crediting the overdrawn amount for customers, giving them full access to their stimulus payment,” said Anne Pace, a spokeswoman for Chase, in an email to The Times on Wednesday. “We hope this gives them a chance to catch their breath.”
On Monday, a group of 25 state attorneys general also registered their disapproval of garnishing relief checks. “During this public health and economic crisis, the states do not believe that the billions of dollars appropriated by Congress to help keep hardworking Americans afloat should be subject to garnishment,” they wrote in a letter to Mr. Mnuchin.
The American Prospect this week unearthed an audio recording of a Treasury official discussing with banks how stimulus money should be handled when there are outstanding loans or other debts. The official, Ronda Kent, said that “there’s nothing in the law that precludes that action” and that it was up to the discretion of the banks.
Progressive watchdog groups have seized on the issue to criticize the Trump administration’s handling of the economic crisis, describing it as a giveaway for banks.
“This money should be going toward food, rent and medicine — it’s not the time to hand out favors to debt-collection industry donors or pad some big bank’s bottom line,” said Jeremy Funk, a spokesman for Allied Progress. “Secretary Mnuchin needs to ensure that these $1,200 checks go straight into Americans’ pockets, where they belong.”
The Treasury Department had no comment.
Another hopeful stimulus recipient described having to fight for hours with her credit union on Wednesday before it would release the full $2,400 deposit. Initially, the institution, Digital Credit Union, which is based in Marlborough, Mass., kept $1,000 to make up for the customer’s overdrawn account balance.
The customer did not want to be identified because she was worried that the lender would close her accounts or penalize her for speaking publicly. She and her husband have four children. His hours at a group home for children were recently cut to three days a week, she said. She is out of work.