CFPB Urges Stimulus Payment to Reach Consumers

Concerned that some payments will be intercepted to cover such things as unpaid overdraft fees, the Consumer Financial Protection Bureau encouraged financial institutions (including credit unions) and debt collectors to allow the payments to reach consumers in a March 17, 2021, statement.

CFPB Acting Director Dave Uejio said the Bureau is “squarely focused” on addressing the impact of the coronavirus crisis on economically vulnerable consumers and is watching the economic income payments (EIPs) to consumers authorized under the American Rescue Plan, adopted by Congress. The EIPs were part of President Joe Biden’s plan to provide an economic stimulus to the country in the wake of the financial impact of the pandemic.

Uejio also noted he is staying in touch with state regulators and their efforts to protect consumer payments. He said he wants to better understand the effectiveness of those states’ efforts.

As for the payments themselves, Uejio said his agency is concerned funds will not reach consumers and instead could be intercepted by financial institutions or debt collectors to cover overdraft fees, past-due debts, or other liabilities. Uejio further stated that it is the Bureau’s intent to remain closely engaged as the payment rollout continues.

According to the acting director, financial industry trade associations have expressed that their member institutions want to work with consumers struggling in the pandemic.

“Many of these organizations have told us they have begun or soon will take proactive measures to help ensure that consumers can access the full value of their stimulus payments,” Uejio said. “If payments are seized, many financial institutions have pledged to promptly restore the funds to the people who should receive them.”

Credit unions should exercise appropriate due diligence in the development of policies related to these payments to ensure compliance with all applicable regulations.