The Treasury Department is reviewing whether it has the legal authority to prevent banks and private debt collectors from seizing $1,200 government stimulus payments, as blowback builds over private lenders clawing back parts of the emergency financial relief package, the Washington Post reported. he review is being conducted by legal counsel at the Treasury Department, said the person, who declined to speak on record because the matter had not been finalized. It was unclear when a determination about the payments would be made. Earlier this month, the Trump administration began directly depositing stimulus checks in the bank accounts of 80 million Americans to help them survive the economic downturn caused by the coronavirus. Reports quickly surfaced that some of these payments were being redirected to banks and private debt collectors from people who have overdraft fees, delinquent loans or other debt obligations. These garnishments have sparked a bipartisan backlash in Congress, with lawmakers arguing the money should be walled off from collection by banks and private debt collectors. Several large banks announced they would stop taking the money amid public criticism.
