On April 1, according to new reporting from David Dayen at The Prospect, Sen. Sherrod Brown directly told Treasury Secretary Steven Mnuchin that he would have to act to make sure that banks and private debt collectors wouldn't seize the $1,200 coronavirus stimulus payments that are now supposed to be hitting people's bank accounts. Dayen broke the story yesterday, explaining how Mnuchin had the power to make sure that the $1,200 payments could be protected from being garnished by private creditors and banks, but was refusing to do so. Now Brown's office is claiming that Mnuchin was made aware that he needed to act on it two weeks ago.
"On a call with Secretary Mnuchin on April 1, Senator Brown raised the garnishment issue to Secretary Mnuchin, who at the time was not aware of the issue," Senator Brown's office said in a statement to Dayen. Mnuchin was in on the negotiations and helped craft the law, so he should have been aware of that from the beginning. But to be sure he would do the right thing and act to protect the payments from creditors, Brown reiterated that with him. Beyond that discussion, Dayen writes, "Brown on two occasions urged Mnuchin to write regulations to flag the CARES Act payments and prevent financial actors from taking them. On April 3, he joined Senators Ron Wyden (D-OR) and Elizabeth Warren (D-MA) in a letter. Then on April 9, he wrote a bipartisan letter with Senator Josh Hawley (R-MO)."
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Yet Mnuchin did nothing to stop it, and in a webinar with bank officials last week, a Treasury official who was asked about it said "There’s nothing in the law that precludes" banks or private creditors from going after the payments. "We do understand that concerns have been raised about this legal requirement, but it is a legal requirement at this time," the official continued, while leaving out the part that the Treasury Department could make a rule to suspend that requirement.
Brown’s office said in the statement to Dayen "Treasury has the power to fix this and they should." They haven't. Some states, including Massachusetts and Ohio have moved to put protections in place so that private debt collector and financial institutions can't seize the payments, but with the snap of a finger, Mnuchin could do that for every state. And he's known he could for two weeks.
