Banks authorized to grab stimulus checks off their customers

Emergency coronavirus paychecks in the US could be forfeited to banks to repay outstanding debts, reports Prospect, suggesting that they won’t reach the hands of those who need it the most. 

Because some people’s $1,200 checks, which come by way of the CARES Act, are deposited straight to bank accounts, rather than sent through the mail, banks have the right to seize checks from their intended beneficiaries. 

 Coronavirus

Coronavirus causes biggest recession in 90 years says IMF

The International Monetary Fund has made its economic predictions for the “Great Lockdown 2020.” The fallout will be “far worse” than the financial crisis of 2008, and “the worst recession since the Great Depression.”  In April’s World Economic Outlook, the IMF predicted that global growth in 2020 will fall to minus three percent, a drop of 6.3% since January 2020. We’re in for a big shock: around nine trillion of the global gross domestic product will be lost to the pandemic, “greater than the...

That’s because neither Congress nor the Treasury prevented banks from collecting private debts. According to an audio recording Prospect obtained, Ronda Kent, chief disbursing officer with Treasury’s Bureau of the Fiscal Service, explained that “there’s nothing in the law that precludes that action.”

The money can also use the money to offset $1,000 in overdraft charges, even if someone thought that the account had been closed. “Payday lenders in many states have access to bank accounts and can seize that money as well,” says Lisa Stifler, head of debt collection work at the Center for Responsible Lending.

Has China’s digital currency gone into public beta?

Screenshots of what appears to be China’s upcoming digital yuan flooded WeChat today. The digital currency appears to be part of a trial being conducted by the Agricultural Bank of China, or ABC. The bank, one of the country’s biggest, is not particularly tied to agriculture, but it is among four banks that the People's Bank of China tapped to be part of the beta rollout of the currency. Matthew Graham, CEO of Sino Global Capital, broke the news, as well as images of the currency, on Twitter on...

“At a time when people are desperate to buy food, the idea that anybody would grab [the $1,200 payments], let alone the banks they trust with their money, is appalling,” Lauren Saunders, associate director with the National Consumer Law Center, told Prospect. 

According to a later article by The Prospect, US Treasury Secretary Steven Mnuchin, who planned the CARES act, knew that banks would be able to take the cheques but didn't put in a measure to stop them.

The lesson? Don’t trust; verify. 

Please note: This article has been updated to include information from a later article.