Stimulus deposit

[adjusterjack]

It seems that some banks are/were applying the stimulus checks to overdrafts.

It's called the right of set off. It's part of every account agreement of every bank account, credit card, loan of every bank. Which makes it a contract that the account holder agrees to by opening the account.

I'm not saying that banks shouldn't cut there customers some slack (they should) just explaining how and why it works and that it's not "stealing" as opined by s
(some) Democrat Senators.

I bet they've never read their account agreements.

 

[NeilTheCop]

It's called the right of set off. It's part of every account agreement of every bank account, credit card, loan of every bank. Which makes it a contract that the account holder agrees to by opening the account.

I'm not saying that banks shouldn't cut there customers some slack (they should) just explaining how and why it works and that it's not "stealing" as opined by s
(some) Democrat Senators.

I bet they've never read their account agreements.

I understand completely, especially if it's an electronic deposit as the banks computers don't know and don't care where the check came from, it's just applied to the account.

 

[quincy]

I imagine the banks will be replacing the stimulus money in their customers’ accounts.

Although the CARES act did not specifically prohibit banks from taking these check deposits if made to overdrawn accounts, the clear intent of the Act was to get cash to the people.

The text of the Act did specify that the amount of money would be used to cover any child support arrearages but could not be garnished for debts.

 

[NeilTheCop]

They interviewed a lady on local TV here, and she had just spent her check on a set of new tires and paid her cellphone bill. She then went on to complain that the check wasn't enough

 

[PayrollHRGuy]

I'd be willing to bet that every bank's computer system would apply any deposit automatically to any overdraft amount. And even if the bank didn't want to apply the amount it would A) have to reprogram their systems and/or B) have to be done manually for each deposit. Both of which would take more time than they have had.

Let's also throw in having that program will also need to be able to discriminate between the CARES check and regular IRS refunds.

 

[quincy]

I'd be willing to bet that every bank's computer system would apply any deposit automatically to any overdraft amount. And even if the bank didn't want to apply the amount it would A) have to reprogram their systems and/or B) have to be done manually for each deposit. Both of which would take more time than they have had.

Let's also throw in having that program will also need to be able to discriminate between the CARES check and regular IRS refunds.

I agree that the banks where the stimulus check deposits covered overdrafts probably was due to the banks’ automated systems and not an intentional act by the banks to deprive customers of their stimulus funds.

All actions and reactions to the Coronavirus will no doubt be investigated thoroughly to determine what has worked and what has failed to work. With luck, there will never be a pandemic of this magnitude again but, realistically, there will be - and next time, perhaps the world will be better prepared.

 

[Taxing Matters]

I imagine the banks will be replacing the stimulus money in their customers’ accounts.

Although the CARES act did not specifically prohibit banks from taking these check deposits if made to overdrawn accounts, the clear intent of the Act was to get cash to the people.

The text of the Act did specify that the amount of money would be used to cover any child support arrearages but could not be garnished for debts.

But I've already in another thread laid out why it is not illegal for creditors, including banks, to attach the checks once they hit the bank account. Had Congress not wanted that result, it could have clearly indicated that in the legislation. Congress knows who to do that if it wants — after all, it made SSI funds not available for ANY attachment, even after it hit the bank account. It did not use similar language here. The courts apply the statute as written when the statute itself is clear. And in this case the Congress was very exacting in what offsets were not allowed. I know you seem to be resistant to that outcome, but that is the way the CARES Act is drafted.

 

[quincy]

But I've already in another thread laid out why it is not illegal for creditors, including banks, to attach the checks once they hit the bank account. Had Congress not wanted that result, it could have clearly indicated that in the legislation. Congress knows who to do that if it wants — after all, it made SSI funds not available for ANY attachment, even after it hit the bank account. It did not use similar language here. The courts apply the statute as written when the statute itself is clear. And in this case the Congress was very exacting in what offsets were not allowed. I know you seem to be resistant to that outcome, but that is the way the CARES Act is drafted.

I didn’t read your other post.

The CARES Act was drafted swiftly and not everything that needed to be included was included - and some stuff that should not have been included was.

 

[davew9128]

They interviewed a lady on local TV here, and she had just spent her check on a set of new tires and paid her cellphone bill. She then went on to complain that the check wasn't enough

Well depending on the tread remaining on the tires and time overdue on the cell phone, this could be serious. As in legit serious.

 

[quincy]

I think having a cell phone and internet access can be vital right now. There are programs available to help with mortgage and rent payments and there are orders to prevent foreclosures, evictions and utility shut offs, but there is little but stimulus check money to assist individuals in other areas.

 

[Taxing Matters]

I didn’t read your other post.

You did, as we had a rather lengthy exchange on the matter.

But I'll summarize it here with what I hope is bit more clarity than I did in that other exchange.

The stimulus checks are technically tax refund checks. The law has always been that tax refund checks are attachable by creditors once they hit the bank account or hands of the taxpayer. But the law restricts what debts may offset a tax refund while it is still in the hands of the IRS. The CARES ACT carefully turned off all those refunds offsets (which, by the way, would not have been necessary if the payments were not tax refunds) by specifically listing each offset that was being turned off, save one — the child support offset. The child support offset remains because it was not listed. When you look at the offsets that were turned off, ALL of them were offsets where the money goes to the government. So the clear intent of Congress was that the government not suck up the money. But Congress did not express any intent in the legislation that private creditors could not get their hands on the money.

Had the Congress intended for the payments to be broadly exempt from all attachment, it would not have taken the narrow approach of listing certain federal and state government offsets that get turned off. It would have used the broad language of the sort used with respect to SSI payments. The Congress knows how to do that, it could have just lifted that language and put it in this bill. It would have actually been shorter had it done that. Given how carefully the language was written, I have no doubt the drafters knew exactly what they were doing. Now, perhaps in hindsight after the stories come out about various creditors taking the money Congress may decide in a future round of stimulus payments to provide more protection for them.

 

[PayrollHRGuy]

Clearly the PPP checks aren't meant to only be used for vital necessities. If that were the case they would have been means-tested.

 

[quincy]

Clearly the PPP checks aren't meant to only be used for vital necessities. If that were the case they would have been means-tested.

Agreed. They are to be used as needed.

 

[PayrollHRGuy]

Agreed. They are to be used as needed.

I helped stimulate the economy with part of mine this weekend. I bought a new pistol.

 

[quincy]

I helped stimulate the economy with part of mine this weekend. I bought a new pistol.

You will fit right in with the (fill in the adjective of your choice) protesters who are congregating in various states in defiance of stay-at-home orders. If you do not wear a face mask or social distance, you will fit in even better.