Archive Doc Economic Impact Payments Qanda 20200416

Summary

A question-and-answer sheet on Economic Impact Payment "Stimulus Checks" and check cashing, prepared by the Texas Senate Committee on Business & Commerce, chaired by Senator Kelly Hancock. It states that financial institutions qualified as essential businesses and are operating across Texas under modified operating plans. It describes how payments will be received by direct deposit, prepaid accounts or paper checks, and where government checks can be cashed, including certain national banks, payday lenders and other credit access businesses, and pawn shops. It notes that pawn shops not registered as a Money Service Business have a $1,000 limit on cashing checks. The sheet states it was prepared with input from the Independent Bankers Association of Texas, the Texas Bankers Association, Consumer Service Alliance and Pawn Coalition.

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                    Economic Impact Payment
             “Stimulus Checks” & Check Cashing Q&A
Are financial institutions open for business?
    • Financial Institutions from large national banks, community banks, and credit access businesses
        have all qualified as essential businesses under disaster preparedness standards and are currently
        operating across Texas, though under modified operating plans to meet public health guidance.

How will stimulus payments be received?
  • Direct deposit or automated payments:
            o The payments will be received by direct deposit for qualifying individuals who included
               account information on their 2018 or 2019 tax return.
            o Taxpayers who have not authorized a direct deposit can update their bank information
               using the U.S. Department of Treasury website.
  • Prepaid accounts:
            o The Consumer Financial Protection Bureau (CFPB) issued a statement stating that it
               modified a rule to “pave the way” for prepaid accounts to get stimulus funding to
               individuals faster than paper checks. Bankers caution that it’s ultimately the decision of
               the IRS on how to distribute the funds.
  • Paper checks:
            o The U.S. House Committee on Ways and Means has issued this timeline on when
               payments, including paper checks, are expected to be issued.

Where else can government checks be cashed?
  • Certain national banks:
           o Half of the banks that are members of the Texas Bankers Association have indicated they
               will also cash stimulus checks for non-customers for no fee, but they have not announced
               this publicly.
  • Certain payday lenders and other credit access businesses:
           o Larger payday lenders may cash stimulus checks with no fee associated.
           o Smaller credit access businesses are not allowed to keep sufficient cash on hand under
               federal money services business regulations to make that statement.
           o Of note - most transactions at a payday lender are performed via direct deposit or
               automated payments.
  • Certain pawn shops:
           o Pawn shops that are currently not registered as a Money Service Business have a $1,000
               limit on cashing checks.
           o Most stimulus payments are expected to be more than the $1,000 limit. In order for
               pawn shops that are not currently registered as a money service business to cash a
               stimulus check, there will need to be a waiver granted by the Federal Government for
               that specific purpose.

*This document was prepared with the input of the Independent Bankers Association of Texas, the Texas
Bankers Association, Consumer Service Alliance, Pawn Coalition

   PREPARED BY TEXAS SENATE COMMITTEE ON BUSINESS & COMMERCE  SENATOR KELLY HANCOCK , CHAIR


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