The bank had been using the payments to offset existing debts.
USAA, the large bank that primarily serves veterans and military members, has changed its policy and will no longer be using emergency CARES Act payments to offset existing debts from individuals. The bank will return all money confiscated from customers under the old policy, including Carrie, the woman whose family lost $3,400 to USAA when their CARES Act payment was placed into an account they thought was closed.
“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,” wrote USAA spokesman Matthew Hartwig in a statement. “This will allow members access to their full stimulus payment to help cover the costs of rent, food and other important necessities.”
Hartwig added that the policy would be applied retroactively, giving members who had negative balances on their accounts “access to their stimulus funds.” This policy will be applied “as early as today,” he said.
It’s unclear how this will affect charged-off accounts like Carrie’s family had. The family no longer has access to the account, which they considered closed and which has $8,000 in debts on it (the family claims it’s in part from fraudulent activity). USAA could either remit the $3,400 in funds to the family via mail, or return the CARES Act payments to the IRS, enabling the IRS to mail them out to the family. Hartwig told the Prospect, “We are working through what the best solution for that will be” for that situation…
To read the entire article from The American Prospect, click https://prospect.org/coronavirus/usaa-changes-policy-will-return-emergency-payments/
