A legislative fix is needed, said one observer, to prevent “a flood of new judgments from debt collectors to siphon stimulus funds out.”

By Jake Johnson, staff writer for Common Dreams. Published 3-14-2021

Screenshot: C-SPAN

Direct payments from the newly approved coronavirus relief package began landing in people’s bank accounts with striking quickness this weekend, but a glaring shortcoming of the American Rescue Plan caused by the arcane procedural tool that Democrats used to pass the bill could prevent checks from reaching many vulnerable households.

Unlike the Covid relief bill that Congress passed through regular order in December, the new $1.9 trillion legislation does not include protections barring debt collectors from hoovering up the checks and using them to pay off people’s private debts—which, as The American Prospect‘s David Dayen put it, makes the American Rescue Plan “also a cash cow for debt collectors.” Continue reading →