Some Banks Keep Customers’ Stimulus Checks if Accounts Are Overdrawn

A Minneapolis couple with a USAA account — a disabled veteran and his wife — were anxiously awaiting their relief payments, the wife said. She and her young family had just moved into their own apartment after living with their extended family while they struggled to get out from under thousands of dollars of debt.

But the woman, who did not want to be identified by name out of concern that her financial troubles could harm the careers of family members, had to quit her job after being unable to find child care when Minnesota ordered all day care centers to close because of the virus. She had been counting on a relief payment to help pay rent and buy formula for her 10-month-old daughter.

But USAA told the couple that it was keeping the money because their account was overdrawn.

The woman showed The New York Times screenshots of a Twitter exchange between her husband and a USAA representative. Using USAA’s verified Twitter account, the representative explained that if the family’s bank account had a negative balance, “any deposits to the account will go toward the negative amount owed to the bank.”

After this article was published on Thursday, USAA said it would pause overdraft collections for the next 90 days.

“This will allow members access to their full stimulus payment to help cover the costs of rent, food and other important necessities,” Matthew Hartwig, a bank spokesman, said in an email. “Beginning as early as today, we will apply this policy retroactively to any member accounts with a negative balance at the time the first stimulus checks were deposited, so that members will have access to their stimulus funds.”

The government checks are meant to cushion the pandemic’s financial blow to some of the hardest-hit Americans. Anyone who earns up to $75,000 in adjusted gross annual income and has a Social Security number will receive $1,200. Married couples who file joint tax returns will receive $2,400 if their adjusted gross income is under $150,000. The amount declines for those who make more.

In a March 2018 survey, the Pew Charitable Trusts, a nonpartisan research institute, found that more than 39 million Americans had incurred overdraft fees within the past year, with people essentially using overdrafting as credit.

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