13 senators join Harris letter urging Mnuchin to exempt coronavirus checks from private debt collection

13 senators join Harris letter urging Mnuchin to exempt coronavirus checks from private debt collection
© Greg Nash

A group of Senate Democrats is urging Treasury Secretary Steven MnuchinSteven MnuchinMenendez, Rubio ask Yellen to probe meatpacker JBS The Hill's Morning Report - Presented by Goldman Sachs - Biden rallies Senate Dems behind mammoth spending plan Mnuchin dodges CNBC questions on whether Trump lying over election MORE to exempt checks being issued as part of last month's $2.2 trillion coronavirus relief bill from being subjected to garnishment by debt collectors. 

Fourteen senators on Friday sent a letter, spearheaded by Sen. Kamala HarrisKamala HarrisStefanik in ad says Democrats want 'permanent election insurrection' Live coverage: California voters to decide Newsom's fate Florida woman faces five years in prison for threatening to kill Harris MORE (D-Calif.), to Mnuchin urging him to issue regulatory rules that would exempt the stimulus checks from private debt collection. 

"There are concerns that the direct assistance checks that Americans are receiving may be subject to private debt collection, which could potentially deprive Americans of essential assistance that they need in order to pay bills and keep food on the table," the senators wrote to Mnuchin in the letter, a copy of which was obtained by The Hill ahead of its release. 

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"We ask you to act right away to use Treasury’s rulemaking authority to exempt Americans’ direct assistance payments from private debt collection so that American families can receive critical assistance to help them get through this unprecedented crisis," they added. 

In addition to Harris, Sens. Dick DurbinDick DurbinManchin keeps Washington guessing on what he wants Democrats hope Biden can flip Manchin and Sinema US gymnasts offer scathing assessment of FBI MORE (D-Ill.), Bernie SandersBernie SandersDemocrats urge Biden to commute sentences of 4K people on home confinement Briahna Joy Gray: Push toward major social spending amid pandemic was 'short-lived' Sanders 'disappointed' in House panel's vote on drug prices MORE (I-Vt.), Chris MurphyChristopher (Chris) Scott MurphySenators slow Biden with holds at Pentagon, State Tell our troops: 'Your sacrifice wasn't in vain' Sunday shows preview: Bombing in Kabul delivers blow to evacuation effort; US orders strikes on ISIS-K MORE (D-Conn.), Richard Blumenthal (D-Conn.), Chris Van HollenChristopher (Chris) Van HollenBottom line Spendthrift Democrats ignore looming bankruptcy of Social Security and Medicare Progressive pollster: 65 percent of likely voters would back polluters tax MORE (D-Md.), Jeff MerkleyJeff MerkleyDemocrats revive filibuster fight over voting rights bill Senate backers of new voting rights bill push for swift passage Stacey Abrams backs Senate Democrats' voting rights compromise MORE (D-Ore.), Patty MurrayPatricia (Patty) Lynn MurrayConservation group says it will only endorse Democrats who support .5T spending plan Support the budget resolution to ensure a critical investment in child care Senate Democrats try to defuse GOP budget drama MORE (D-Wash.), Doug Jones (D-Ala.), Sheldon WhitehouseSheldon WhitehouseDemocrats draw red lines in spending fight What Republicans should demand in exchange for raising the debt ceiling Climate hawks pressure Biden to replace Fed chair MORE (D-R.I.), Tammy BaldwinTammy Suzanne BaldwinWarren, Daines introduce bill honoring 13 killed in Kabul attack This week: Democrats kick off chaotic fall with Biden's agenda at stake Bottom line MORE (D-Wis.), Amy KlobucharAmy KlobucharHarris, CBC put weight behind activist-led National Black Voter Day Seven takeaways from California's recall election Live coverage: California voters to decide Newsom's fate MORE (D-Minn.) and Tina SmithTina Flint SmithOvernight Energy & Environment — Presented by Climate Power — Democratic leaders vow climate action amid divide Manchin puts foot down on key climate provision in spending bill On The Money — The Democratic divide on taxes MORE (D-Minn.) signed the letter. 

The coronavirus legislation passed last month provides $1,200 in direct assistance to individuals who make up to $75,000, with the amount scaled down for higher incomes until reaching an annual gross adjusted income of $99,000, where it phases out altogether. An additional $500 per child is also included. 

The letter comes after The American Prospect published audio this week of Treasury official Ronda Kent discussing with banks how they should handle the coronavirus checks if the account holder had outstanding loans or debt. According to the audio, Kent told banks there is "nothing in the law that precludes" the funds from being garnished and it is up to banks. 

Top banking associations also sent a letter to Sens. Sherrod BrownSherrod Campbell BrownAdvocates call on top Democrats for 0B in housing investments Democratic senators request probe into Amazon's treatment of pregnant employees Wyden releases new tax proposals as Democrats work on .5T bill MORE (D-Ohio) and Elizabeth WarrenElizabeth WarrenFederal Reserve officials' stock trading sparks ethics review Manchin keeps Washington guessing on what he wants Warren, Daines introduce bill honoring 13 killed in Kabul attack MORE (D-Mass.) noting that under the coronavirus bill, "Congress failed to define these payments as benefits subject to preemption from garnishment."

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"As a result, with regard to any legal garnishment, depository institutions have no discretion and are obligated to comply with applicable state laws and court-ordered garnishments," the groups said, adding that Congress should pass language clarifying future COVID-19 payments.  

The senators noted in their letter to Mnuchin that the coronavirus legislation did not directly exempt the direct cash payments from private debt collection, but that it "belies the intent behind the law."

"Treasury has the rulemaking authority specifically to ensure that as part of its process of implementing the direct payment program, it could ensure that the checks Americans were receiving were exempt from private debt collection," they wrote. 

"We ask you to ensure that direct assistance checks cannot be garnished for private debt collection purposes," they added. 

Harris's letter comes as the first round of stimulus checks went out this week for individuals who have authorized the IRS to make a direct deposit into their bank accounts. Senate Democrats, noting that money is already being sent out, asked Treasury to complete any rulemaking to protect the checks from private debt collection by April 24. 

Brown and Sen. Josh HawleyJoshua (Josh) David HawleySenators slow Biden with holds at Pentagon, State Overnight Defense & National Security — Milley becomes lightning rod Joint Chiefs Chairman Milley becomes lightning rod on right MORE (R-Mo.) sent their own letter last week to the Treasury Department, urging Mnuchin to use his rulemaking authority to protect the recovery checks from private debt collectors. A group of state attorneys general sent Mnuchin a similar request on Monday.