You are here

New York AG Issues New Guidance Surrounding CARES Act

On Monday, April 20, 2020, New York Attorney General Letitia James issued guidance regarding the treatment of CARES Act stimulus payments under New York law. In the guidance, James states that CARES Act funds are exempt from garnishment by any creditor or debt collector. The garnishment of these payments will be deemed fraudulent, as illegal conduct under Executive Law § 63(12), and as deceptive conduct under General Business Law § 349.

In certain circumstances, New York law does allow a financial institution the right of setoff, allowing them to seize funds in a consumer’s account to pay a debt owed to the institution. However, since CARES Act payments are exempt from garnishment, James has stated that such payments are also exempt from setoffs.

For more information on how COVID-19 affects your industry, please visit our Resources Center.