Law Protects Seniors Bank Accounts from Seizure
Author: National Consumer Law Center
Synopsis and Key Points:
Law prevents debt collectors from illegal seizure of Social Security funds from bank accounts of seniors.
Main DigestNational Consumer Law Center Hails Rule to Protect Seniors Bank Accounts.
New rules proposed by Obama's Treasury Department would prevent debt collectors from triggering the illegal seizure of Social Security funds from the bank accounts of tens of thousands of seniors.
"Once enacted, this regulation will stop banks from illegally freezing Social Security, SSI and veterans' benefits to satisfy garnishment orders from debt collectors," said Margot Saunders, an attorney with the National Consumer Law Center.
Existing law exempts Social Security, veterans and other federal benefits from being taken through court orders obtained by creditors and debt collectors. However, banks regularly freeze accounts that contain such funds and charge hefty overdraft, bounced check and garnishment fees to consumers.
"This is a critical protection for seniors and others who depend on federal benefits to pay for food, medicine and shelter," Saunders said.
The proposed rules will require banks to identify bank accounts which in the past 60 days have had direct deposit of Social Security, veterans and other federal benefits. All of the federal benefits deposited during those 60 days will be protected from seizure, regardless of whether other, non-exempt funds have also been deposited or withdrawn from the account.
"The National Consumer Law Center applauds the Obama administration and Senators Max Baucus and Herb Kohl for finding a solution to a flaw in the banking system that has financially strangled vulnerable seniors and other recipients of Social Security and other federal benefits," Saunders said.
The proposed rules were made public Wednesday and posted on-line at www.federalregister.gov/OFRUpload/OFRData/2010-08899_PI.pdf. Comments will be received by Treasury through mid June. Saunders urged citizens and organizations to file comments in support of those rules starting on April 19 at www.regulations.gov.
The National Consumer Law Center is a non-profit organization with 39 years of experience working on issues that affect low-income consumers. NCLC publishes legal manuals and consumer guides and works with and trains legal services, government and private attorneys, community groups and organizations representing low-income and elderly consumers. Support for NCLC's advocacy was provided in part by The Retirement Research Foundation.
- 1: Disability Bias in AI Hiring Tools and Legal Protection : Juyoun Han and Patrick Lin (2020/11/25)
- 2: Can School Districts Carve Out a Placement from the IDEA's Stay-Put Provision? : David Greco : RMO LLP (2020/05/01)
- 3: U.S. Jails Hold More Mentally Ill Persons Than Hospitals : Joe D. Gonzales Law Office (2010/08/21)
- 4: Ambulance Chasing Lawsuits : Litigation, Extortion and Lawyer Complaints : Emma Johnson (2013/12/28)
- 5: Lawsuit Alleging Disability Discrimination by Owners and Developers of Apartment Complexes in 13 States : U.S. Department of Justice Office of Public Affairs (2019/05/10)
- 6: Crowdfunding Legal Expenses Such as Litigation, Court or Trial Defense : Disabled World (2015/01/13)
- 7: U.S. Justice Department Files Lawsuit Alleging Disability-Based Housing Discrimination : The U.S. Justice Department (2019/02/21)
• Disabled World is strictly a news and information website provided for general informational purpose only and does not constitute medical advice. Materials presented are in no way meant to be a substitute for professional medical care by a qualified practitioner, nor should they be construed as such. Any 3rd party offering or advertising on disabled-world.com does not constitute endorsement by Disabled World. Please report outdated or inaccurate information to us.