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USAA, a financial company that caters to military members and veterans, has suspended a policy that had resulted in members having their stimulus checks used to offset existing debts.
In a statement to FOX Business, USAA confirmed that it had paused collection of negative account balances.
“For members with negative deposit account balances, USAA will pause the collection of a negative account balance existing at the time their stimulus payment was deposited for 90 days,” the spokesperson said. “This will allow members access to their full stimulus payment to help cover the costs of rent, food and other important necessities.”
The policy will be applied retroactively and will be implemented as early as this week. That means any members who may not have received their full payment will be made whole.
USAA had initially defended the practice under legal guidelines.
For those in need of further aid, the group does have special assistance available to military members and their families, including returning money to auto policyholders, 90-day credit card payment deferral and mortgage assistance.
As previously reported by FOX Business, there have been concerns raised regarding the payments and Americans who have outstanding debt.
In a letter to Treasury Secretary Steven Mnuchin this week, a group of 25 state attorneys general requested that the government stipulate that the coronavirus relief payments would not be subject to garnishment by creditors and debt collectors.
In some cases, debt collectors obtain a court order whereby they are permitted to take money from them through various means – including directly from bank accounts.
The administration has, so far, not weighed in.
More than 80 million Americans were expected to receive the economic impact payments via direct deposit this week.
The payments are $1,200 per adult for those with adjusted gross incomes of up to $75,000. The threshold for married couples is $150,000 – they are eligible for $2,400 and $500 per child.
The IRS is expected to begin processing paper checks next week.
Late Monday, the government also got approval from the Consumer Financial Protection Bureau to issue the payments on prepaid cards – as a potentially safer and faster alternative to paper checks. The method has been advocated for reaching underbanked individuals.
For more information on the payments, click here.