S. 3841, Act To Protect 2020 Recovery Rebates From Assignment or Garnishment
Summary
S. 3841 is an Act to protect 2020 recovery rebates for individuals from assignment or garnishment, and for other purposes. It states that it passed the Senate on July 23, 2020. Section 1 amends subsection (d) of section 2201 of the CARES Act (Public Law 116-136) to provide that the right of any person to an applicable payment shall not be transferable or assignable and that no applicable payment shall be subject to execution, levy, attachment, garnishment, or other legal process. It also directs the Secretary of the Treasury to issue direct-deposit payments with a unique identifier and to encode them under section 212.3 of title 31, Code of Federal Regulations. The amendments take effect on the date of enactment.
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“S. 3841, Act To Protect 2020 Recovery Rebates From Assignment or Garnishment.”
Original at www.govinfo.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/bills-bills-116s3841es-bills-116s3841es/
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116TH CONGRESS
2D SESSION
S. 3841
AN ACT
To protect 2020 recovery rebates for individuals from
assignment or garnishment, and for other purposes.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
2
1 SECTION 1. PROTECTION OF 2020 RECOVERY REBATES.
2 (a) IN GENERAL.—Subsection (d) of section 2201 of
3 the CARES Act (Public Law 116–136) is amended—
4 (1) by redesignating paragraphs (1), (2), and
5 (3) as subparagraphs (A), (B), and (C), and by mov-
6 ing such subparagraphs 2 ems to the right,
7 (2) by striking ‘‘REDUCTION OR OFFSET.—Any
8 credit’’ and inserting ‘‘REDUCTION, OFFSET, GAR-
9 NISHMENT, ETC.—
10 ‘‘(1) IN GENERAL.—Any credit’’, and
11 (3) by adding at the end the following new
12 paragraphs:
13 ‘‘(2) ASSIGNMENT OF BENEFITS.—
14 ‘‘(A) IN GENERAL.—The right of any per-
15 son to any applicable payment shall not be
16 transferable or assignable, at law or in equity,
17 and no applicable payment shall be subject to,
18 execution, levy, attachment, garnishment, or
19 other legal process, or the operation of any
20 bankruptcy or insolvency law.
21 ‘‘(B) ENCODING OF PAYMENTS.—As soon
22 as practicable, but not earlier than 10 days
23 after the date of the enactment of this para-
24 graph, in the case of an applicable payment
25 that is paid electronically by direct deposit
26 through the Automated Clearing House (ACH)
† S 3841 ES
3
1 network, the Secretary of the Treasury (or the
2 Secretary’s delegate) shall—
3 ‘‘(i) issue the payment using a unique
4 identifier that is reasonably sufficient to
5 allow a financial institution to identify the
6 payment as an applicable payment, and
7 ‘‘(ii) further encode the payment pur-
8 suant to the same specifications as re-
9 quired for a benefit payment defined in
10 section 212.3 of title 31, Code of Federal
11 Regulations.
12 ‘‘(C) GARNISHMENT.—
13 ‘‘(i) ENCODED PAYMENTS.—In the
14 case of a garnishment order received after
15 the date that is 10 days after the date of
16 the enactment of this paragraph and that
17 applies to an account that has received an
18 applicable payment that is encoded as pro-
19 vided in subparagraph (B), a financial in-
20 stitution shall follow the requirements and
21 procedures set forth in part 212 of title
22 31, Code of Federal Regulations, except a
23 financial institution shall not, with regard
24 to any applicable payment, be required to
25 provide the notice referenced in sections
† S 3841 ES
4
1 212.6 and 212.7 of title 31, Code of Fed-
2 eral Regulations. This paragraph shall not
3 alter the status of applicable payments as
4 tax refunds or other nonbenefit payments
5 for purpose of any reclamation rights of
6 the Department of Treasury or the Inter-
7 nal Revenue Service as per part 210 of
8 title 31 of the Code of Federal Regula-
9 tions.
10 ‘‘(ii) OTHER PAYMENTS.—If a finan-
11 cial institution receives a garnishment
12 order, other than an order that has been
13 served by the United States or an order
14 that has been served by a Federal, State,
15 or local child support enforcement agency,
16 that has been received by a financial insti-
17 tution after the date that is 10 days after
18 the date of the enactment of this para-
19 graph and that applies to an account into
20 which an applicable payment that has not
21 been encoded as provided in subparagraph
22 (B) has been deposited electronically or by
23 an applicable payment that has been de-
24 posited by check on any date in the
25 lookback period, the financial institution,
† S 3841 ES
5
1 upon the request of the account holder,
2 shall treat the amount of the funds in the
3 account at the time of the request, up to
4 the amount of the applicable payment (in
5 addition to any amounts otherwise pro-
6 tected under part 212 of title 31, Code of
7 Federal Regulations), as exempt from a
8 garnishment order without requiring the
9 consent of the party serving the garnish-
10 ment order or the judgment creditor.
11 ‘‘(iii) LIABILITY.—A financial institu-
12 tion that acts in good faith in reliance on
13 clauses (i) or (ii) shall not be subject to li-
14 ability or regulatory action under any Fed-
15 eral or State law, regulation, court or other
16 order, or regulatory interpretation for ac-
17 tions concerning any applicable payments.
18 ‘‘(D) DEFINITIONS.—For purposes of this
19 paragraph—
20 ‘‘(i) ACCOUNT HOLDER.—The term
21 ‘account holder’ means a natural person
22 whose name appears in a financial institu-
23 tion’s records as the direct or beneficial
24 owner of an account.
† S 3841 ES
6
1 ‘‘(ii) ACCOUNT REVIEW.—The term
2 ‘account review’ means the process of ex-
3 amining deposits in an account to deter-
4 mine if an applicable payment has been de-
5 posited into the account during the
6 lookback period. The financial institution
7 shall perform the account review following
8 the procedures outlined in section 212.5 of
9 title 31, Code of Federal Regulations and
10 in accordance with the requirements of sec-
11 tion 212.6 of title 31, Code of Federal
12 Regulations.
13 ‘‘(iii) APPLICABLE PAYMENT.—The
14 term ‘applicable payment’ means any pay-
15 ment of credit or refund by reason of sec-
16 tion 6428 of the Internal Revenue Code of
17 1986 (as so added) or by reason of sub-
18 section (c) of this section.
19 ‘‘(iv) GARNISHMENT.—The term ‘gar-
20 nishment’ means execution, levy, attach-
21 ment, garnishment, or other legal process.
22 ‘‘(v) GARNISHMENT ORDER.—The
23 term ‘garnishment order’ means a writ,
24 order, notice, summons, judgment, levy, or
25 similar written instruction issued by a
† S 3841 ES
7
1 court, a State or State agency, a munici-
2 pality or municipal corporation, or a State
3 child support enforcement agency, includ-
4 ing a lien arising by operation of law for
5 overdue child support or an order to freeze
6 the assets in an account, to effect a gar-
7 nishment against a debtor.
8 ‘‘(vi) LOOKBACK PERIOD.—The term
9 ‘lookback period’ means the two month pe-
10 riod that begins on the date preceding the
11 date of account review and ends on the
12 corresponding date of the month two
13 months earlier, or on the last date of the
14 month two months earlier if the cor-
15 responding date does not exist.’’.
16 (b) EFFECTIVE DATE.—The amendments made by
17 this section shall take effect on the date of the enactment
18 of this Act.
Passed the Senate July 23, 2020.
Attest:
Secretary.
† S 3841 ES
116TH CONGRESS
2D SESSION S. 3841
AN ACT
To protect 2020 recovery rebates for individuals
from assignment or garnishment, and for other
purposes.
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