Gov. Phil Murphy said on Wednesday that financial institutions across New Jersey have put in place measures to protect residents’ federal stimulus funds during the COVID-19 pandemic.
“The American Rescue Plan is for the American people, not the banks and creditors,” Murphy said. “We want residents who have received their federal stimulus funds to be able to put it to use as they deem necessary. I am pleased that 50 banks and credit unions have signed on to our agreement to protect these federal payments being received by New Jerseyans from being garnished for past debts or overdrawn accounts.”
A third federal stimulus package, the American Rescue Plan Act of 2021, was signed into law on March 11. As part of this federal stimulus package, the U.S. Department of the Treasury will mail to and deposit stimulus payments into the bank accounts of eligible Americans.
The initiative is aimed at making sure residents can access their stimulus funds and use them to cover essential expenses, said New Jersey Department of Banking and Insurance Commissioner Marlene Caride. Under the initiative, residents of the state will be eligible for relief from participating financial institutions by contacting their bank or credit union. The initiative prevents the garnishment of the $1,400 direct stimulus payments for past debts or overdrawn accounts. The Murphy Administration secured support from Bank of America, Citibank, PNC Bank, TD Bank, and Wells Fargo, in addition to 45 other federal and state-chartered banks and credit unions. More financial institutions are expected to sign on in the coming days.
Participating institutions have put in place measures to protect access to stimulus funds for at least 30 days, regardless of whether the consumer’s bank account is overdrawn or has a negative balance. A list of participating institutions is available online. Murphy also signed an executive order that exempts stimulus payments from garnishment by private creditors and debt collectors. The order continues to allow for garnishment related to child support, spousal support, or family support, or criminal restitution payable to victims.