April 24, 2020:
California Exempts CARES Act Payments from Garnishment
On April 23, 2020, California’s Governor Newsom, signed an Executive Order that exempts garnishment for any individuals receiving federal, state or local government financial assistance in response to the COVID-19 pandemic. This means, effective immediately, any federal, state or local government financial assistance made available to individuals in response to the COVID-19 pandemic is exempt from attachment, levy, execution or garnishment without any further action taken by the individual to the extent the funds are traceable to the financial assistance received by that individual.
So, what does this mean? COVID-19 related funds may still be garnished for child support, family support, spousal support or criminal restitution for victims. Any money collected in violation of the Executive Order or collected or retained prior to the date of this Order, must be promptly refunded without any further action (including, but not limited to, the filing of any claim of any kind, or the payment of any fee or penalty of any kind).
Student Loan Relief for Californians
The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act provided relief for students with federal loans, including the suspension of monthly payments, interest, and involuntary collection activity until September 30, 2020. However, the CARES Act did not address millions of student loan borrowers with federal loans that are not owned by the U.S. government as well as loans made by private lenders. To alleviate this gap, Governor Newsom also announced additional help for student loan borrowers. Under the new initiative, students with commercially owned Federal Family Education Loan or privately held student loans may also be eligible for expanded relief. Relief options include providing a minimum of 90 days forbearance, waiving late payment fees, ensuring that no borrower is subject to negative credit reporting, and helping eligible borrowers enroll in other assistance programs.
New Weekly Member Alerts
Going forward, RMAI will send weekly Member Alerts reporting state actions related to COVID-19, rather than sending separate Member Alerts throughout the week, unless there are urgent new policies that require immediate action.
You can expect to receive your weekly Member Alert every Wednesday or Thursday, depending on the activity.
We will continue with daily updates to the RMAI COVID-19 resource page.
This alert is intended for members of the Receivables Management Association International and is for informational purposes only and is in no way intended to provide legal advice. Members are encouraged to consult with an attorney of their choice for legal advice concerning this matter.