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In-may 2011 the Treasury Department introduced a new regulation that identifies exempt deposits, including Social safety advantages, if they show up on a bank worker’s screen, telling the lender why these funds can not be garnished. “Before, the lender would typically state, ‘It’s maybe not as much as us to choose whether funds are exempt.’ They’d get a garnishment demand and freeze your account,” claims Jay Speer, executive manager associated with the Richmond-based Virginia Poverty Law Center. “You’d need certainly to visit court to show they certainly were exempt. Meanwhile, your bank account is frozen and you also can not withdraw cash buying food. Now the garnishment is avoided and never having to head to court. It is making the banking institutions do whatever they must have been doing all along.”
Although the regulation should make it harder for storefront loan providers to garnish borrowers’ advantages, banking institutions which make payday-style loans would not have the exact same trouble. Read More