Says State Law Says Money Is Public Assistance
April 15, 2020
Massachusetts Attorney General Maura Healey has issued guidance saying banks and credit unions in the commonwealth can’t seize the $1,200 grants coming from the federal government. That’s contrary to statements from the U.S. Treasury Department.
According to the guidance, Healey said it is the view of her office that, under state law, all funds provided to Massachusetts residents under the Coronavirus Aid, Relief, and Economic Security (CARES) Act constitute “public assistance.” Accordingly, she said, the funds are exempt from seizure, including garnishment, and attachment and remain exempt after payment regardless of how the funds are deposited or thereafter held.
The news site Common Dreams reported the U.S. Treasury Department told financial institutions during a webinar that U.S. banks had a green light to seize a portion or all of the one-time $1,200 coronavirus relief payments. In an audio recording from the webinar, Ronda Kent, chief disbursing officer at the Treasury Department's Bureau of the Fiscal Service, told bankers that "there's nothing in the law that precludes" financial institutions from seizing a person's payment and using it to pay off the individual's debts.
"These payments are supposed to help individuals and families put food on the table during this crisis, not enrich debt collectors," Healey said in a statement. "With this guidance... my office is putting the debt collection industry on notice that these payments are off limits."
Read more about COVID-19 aid seizure by banks.