Banks taking stimulus checks for unpaid debt and fees — what to do - Business Insider

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As of now, there's only one potential solution: Pick up the phone

Electronic payments are supposed to put cash in hands much quicker than a paper check, but some people's money is bypassing them completely and being used to pay off negative balances.published on Tuesday, banks have the implicit right to seize a coronavirus relief payment deposited into a customer's account and use it to offset any delinquent loans or overdraft fees owed to the bank.

"There's nothing in the law that precludes that action," a Treasury Department official reportedly said in reference to the CARES Act on a phone call with banking officials. The bill does, however, explicitly prohibit debt collectors from snatching stimulus payments for unpaid state or federal debts other than child support. In some cases, offsetting negative account balances is an automatic process.

2. If that doesn't work, reach out to a reporter who can publicize the ongoing issue or call attention to a member of Congress who has the power to reach the decision makers.People who bank with credit unions or local banks may be more vulnerable This week, the four largest US banks — Wells Fargo, JPMorgan Chase, Citibank, and Bank of America — have said they will pause collections on unpaid balances so customers can get their full stimulus payment,

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