The Consumer Financial Protection Bureau (CFPB) has made it easier for people to access stimulus CARES Act funds by removing some of the legal barriers barring banks from issuing the payments through prepaid accounts, according to a press release.
Banks or other government agencies are usually unable to get direct deposits right to consumers if the banks are not in possession of the consumer’s account information. In some of those cases, the faster option might be a fresh prepaid account through which the intended funds can be disbursed.
However, the Electronic Fund Transfer Act (EFTA) prevents that from happening, not letting banks require people to sign up for accounts just to receive government benefits.
Now, the CFPB has loosened those rules, saying the coronavirus pandemic has made it a necessity for people to receive the stimulus payments that the government passed at the end of March as part of the $2 trillion relief package. The package is intended to offset the catastrophic financial damage the virus has wrought by forcing people to stay home and businesses to close. Many have been laid off as a result of that turmoil.
So, the CFPB has determined that if certain conditions are satisfied and the purpose of the payment is to provide relief during the pandemic, then the rules can be broken in those cases. That includes any payments intended to alleviate financial burdens from the pandemic, which are not already part of another government benefit program, are on a one-time basis, and which don’t have broad requirements for the customer to sign up for a program in order to receive the payments.
CFPB Director Kathleen L. Kraninger called the times “unprecedented” and said she hoped the steps the bureau is taking would help the money reach its intended targets.
The CARES Act, intended to provide sweeping financial aid measures for individuals, small businesses and other entities, began distributing stimulus payments on Saturday (April 11).