Pennsylvania's Treasury Department is urging financial institutions to make it easier for taxpayers to cash federal economic impact checks by waiving check-cashing fees and penalties.
State Treasurer Joe Torsella announced in a May 4 release that PNC and Wells Fargo — two of the state's largest active depositories — have agreed to cash economic impact checks for customers and non-customers and will waive fees and penalties that would otherwise reduce the payments. Fees vary but can be as high as $25 per check, according to the release.
“The stimulus checks coming in from the federal government are meant to help Pennsylvanians get through this crisis. Now is the time to make sure every penny stays in the pockets of our families and neighbors,” Torsella said. He called on other financial institutions to adopt the same policies, which he said "could literally save [Pennsylvanians] as much as tens of millions of dollars in unnecessary check cashing fees alone.”
State lawmakers have taken other steps to temporarily clear the path for federal economic payment checks to reach their intended recipients untouched by offsets from debts or fees. The House on May 4 voted 202-0 to pass H.B. 2408, which would exclude from income, earned income, or taxable income the payments received by individuals under the Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136). It would also exclude loan forgiveness for loans granted by the Small Business Administration to help with payroll costs, according to the bill.
The CARES Act payments can't be seized to settle past tax debts or other debts owed to federal and state governments, but there is nothing in the act protecting the payments from garnishments by private debt collectors.
In April a coalition of 25 attorneys general called on Treasury Secretary Steven Mnuchin to issue guidance or regulations prohibiting private debt collectors from garnishing the economic recovery payments. The move followed similar calls from Sens. Sherrod Brown, D-Ohio; Josh Hawley, R-Mo.; Ron Wyden, D-Ore.; and Elizabeth Warren, D-Mass.
Thirteen states and the District of Columbia, along with several localities in other states, have issued orders preventing the garnishment of bank accounts in some form, according to legislative tracking from the National Consumer Law Center.