Moves Could Keep Banks From Seizing Social SecurityBy ELLEN E. SCHULTZ (Wall Street Journal)
The Treasury Department is seeking to plug a loophole that has allowed banks to drain millions of dollars in fees from the Social Security benefits of elderly and disabled customers.
At issue are the accounts of customers whose Social Security benefits are deposited directly from the government to banks. When banks receive garnishment orders from creditors, many freeze the customers’ accounts, even when accounts contain only Social Security.
Federal law bars creditors from taking Social Security to recover a debt, but when they send garnishment orders seeking money in people’s bank accounts, the rules currently don’t specify what banks should do.
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