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CFPB Acting Director Dave Uejio released a statement yesterday calling on financial institutions to ensure consumers receive the full amount of their economic impact payments (EIPs) provided by the American Rescue Plan Act. NAFCU President and CEO Dan Berger and Executive Vice President of Government Affairs and General Counsel Carrie Hunt spoke with Uejio Tuesday to discuss the issue and how credit unions are working to get the payments into members' accounts.

NAFCU and other groups advocated for Congress to "pass standalone legislation addressing garnishment to ensure that American families will receive these benefits as intended to fulfill our common goal of protecting these payments from garnishment within the practical realities of existing financial institution systems." The groups also urged Treasury Secretary Janet Yellen to support the effort. However, no such legislation was considered before enactment of the American Rescue Plan Act. Senate Finance Committee Chairman Ron Wyden, D-Ore., and Senate Banking Committee Chairman Sherrod Brown, D-Ohio, proposed such a standalone bill this week and may try to get the Senate to consider it by unanimous consent today; however, it is unclear if all 100 senators would agree to move it in an expeditious manner.

Although Congress has not taken action on garnishment, Maryland Gov. Larry Hogan Tuesday issued an emergency order prohibiting garnishment of EIPs for recipients in his state.

Uejio, in the statement, indicated his concern that some EIPs wouldn't reach consumers and funds would be used to settle fees, past-due debts or other liabilities. He noted that the bureau had been engaged with financial industry trade associations on financial institutions' efforts and also said the bureau would work with consumer groups and monitor its consumer complaint database to understand how consumers are impacted by the issue.

In addition to the garnishment issue, the IRS chose yesterday – March 17 – as the settlement date for the first wave of EIPs made via direct deposit, limiting financial institutions' ability to make funds available any sooner. The Treasury Department Wednesday announced that 90 million EIPs totaling $242 billion had been disbursed; 150,000 of those disbursements were made via check.

"Credit unions are working to get stimulus funds into their members’ accounts as soon as possible," said Hunt. "Credit unions are not for profit regulated depository institutions who protect their members’ funds with the safety of the full faith and credit of the US Government, unlike fintech payment providers.

"With that safety comes rules credit unions have to follow, including IRS instructions related to funds availability,” added Hunt. “As the IRS sends additional batches of stimulus payments to millions of Americans in need of economic assistance, credit unions will work with members to ensure prompt availability of funds as soon as the IRS has allowed. Credit unions' entire purpose is to serve their members."

NAFCU and industry trade groups have also asked for additional clarity regarding processing electronic and paper check transactions to ensure credit unions and other financial institutions have the resources and guidance needed to efficiently get funds to consumers. A NAFCU Compliance Blog from earlier this year outlined some considerations for credit unions processing EIP checks to help address potential issues.

Stay tuned to NAFCU Today for the latest developments on these issues.