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New law blocks recovery fund collectors


A new state law approved Thursday by Gov. Andrew Cuomo will bar debt collectors from accessing stimulus funds in bank accounts, a move that had been requested by consumer groups.

The law would cover federal stimulus measures approved in 2020 and earlier this year, prohibiting debt collectors from taking that money in summary judgments, debt collection and other forms of asset foreclosure.

“New Yorkers across the state have felt the effects of the COVID pandemic, many have lost their jobs through no fault of their own and are struggling to support themselves and their families,” Cuomo said. “This essential legislation will help ensure that relief payments to New Yorkers are protected from unscrupulous debt collectors so that the money can be used as intended – to help make individuals and families whole. as they continue to recover from the economic impacts of the pandemic. “

The problem for lawmakers who lobbied for the bill in New York was inconsistent language in federal law to protect stimulus funds when they are sent to individuals.

“Federal relief payments were intended to be a lifeline to help families and individuals struggling to make ends meet during these exceptionally difficult times,” said Sen. Kevin Thomas, a Democrat who sponsored the bill and New York City comptroller candidate this year. .

The new law also includes an exception provision to ensure that funds raised would pay child and spousal support, as well as to collect payments in the event of fraud.

Last year, Congress approved thousands of dollars in direct payments to Americans as part of the economic shutdown due to the COVID-19 pandemic, as millions of jobs were cut by businesses and Tax revenues have dried up for local and state governments. Subsequent stimulus measures sent more money to Americans in an attempt to jumpstart an economic recovery.

“Federal aid was intended to help families struggling to make ends meet during this unprecedented time,” said MP Helene Weinstein, sponsor of the bill. “This legislation ensures that families are able to use this safety net funding as originally intended, to provide for basic needs of families and away from the hands of debt collectors.”

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