Member Alert: Minnesota Exempts Stimulus Payments from Garnishment

In other news, U.S. Supreme Court to Hear oral arguments in TCPA case Wednesday; Oregon issues more guidance for regulated entities.

5/5/2020 2:00 PM

AdvocacyDailyNewsCOVID-19
Member Alert: Minnesota Exempts Stimulus Payments from Garnishment

ACA International continues to monitor state and city updates and remains available as a resource for members during this difficult time of fast-moving and often ambiguous regulatory change. In addition, our team maintains regular direct and indirect communications with state and federal regulators to receive up-to-the-minute guidance on industry-relevant orders and emergency regulations, which we parse and report on at regular intervals.

DEADLINE: Applications for the 2020 Loomer-Mortenson Scholarship program are due in 10 days!

The ACA International Education Foundation is accepting applications for the Loomer-Mortenson Scholarship program until May 15, 2020. This year, the Foundation looks forward to awarding more than $50,000 to upcoming and current college students with good grades, writing skills and a connection to the industry via their employment or the employment of a parent. The Foundation will award: $10,000 for first place; $5,000 for second place; $3,000 for third place; and additional winners will receive $1,000 each. Learn more here.

Daily Huddle

Members are invited to join ACA’s team including CEO Mark Neeb, Vice President and Senior Counsel of Federal Advocacy Leah Dempsey, Corporate Counsel Colin Winkler and Vice President of State Government and Unit Affairs Andrew Madden for a Daily Huddle at 11 a.m., Central Standard Time weekdays.

On Wednesday, Chris Schumacher, president and CEO of Optio Solutions LLC, and Sarah Headly, president at Peacock Consulting LLC, will lead a discussion on "How a Robust Quality Assurance Program Makes it Easier to Respond to a Crisis." Specifically, they will review how the elements of a quality assurance program, including policies and procedures, can really help a company pivot more quickly in a crisis.

Daily Huddle sponsors are Collectors Insurance Agency Licensing Services, Intelligent Contacts, RevSpring, Solutions by Text, BillingTree, Interprose, and TCN. Recordings of past Daily Huddle sessions are also available.

Federal News Updates

SCOTUS News

Oral arguments in the case Barr v. American Association of Political Consultants will be held via teleconference May 6, 2020, with the U.S. Supreme Court expected to focus on whether the government-debt exception to the Telephone Consumer Protection Act’s automated-call restriction violates the First Amendment and, if so, whether the proper remedy would be to sever the exception from the remainder of the statute. Read more about this matter and ACA’s approach in the April issue of Collector magazine. 

Coronavirus Aid Package

The next coronavirus aid package on Capitol Hill is expected to include a wish list of advocacy group priorities that could limit the accounts receivable management (ARM) industry’s ability to help consumers manage their payments and maintain long-term financial stability.

The Senate is in session this week and considering more aid legislation including a proposal from U.S. Sens. Sherrod Brown, D-Ohio, and Elizabeth Warren, D-Mass. Members of the U.S. House of Representatives, while still at home, are expected to start sharing drafts of priorities for the next package as early as late this week or next week. The near moratorium on debt collection is expected to remain under consideration in the House draft.

Sens. Brown and Warren detailed their proposal for the next coronavirus aid package in an article on Medium and said it needs to include "comprehensive consumer relief."

ACA International’s advocacy team has not slowed its efforts in advocating to ensure that the industry’s role in providing consumer benefits is considered in these proposals.

Here are the latest updates on state guidance:

Virginia

Gov. Ralph Northam announced a three-phase plan to ease restrictions on businesses and gatherings, when health data supports these actions, according to a news release. Phase one includes safer at home recommendations, no social gatherings of more than 10 individuals, continued social distancing, continued teleworking, face coverings recommended in public, and easing limits on business and faith communities. Each phase could last two to four weeks, or longer.

California

Gov. Gavin Newsom said the state is continuing implementation of the four-stage framework for reopening some lower-risk businesses. "Based on the state’s progress in meeting metrics tied to indicators, the state can begin to move into stage two of modifying the stay at home order Friday, May 8, with guidelines released Thursday, May 7," according to a news release.

Minnesota

Gov. Tim Walz issued an executive order exempting stimulus payments from garnishment and suspending provisions of Minnesota statutes relating to collections, notably those relating to garnishments.

The order prohibits creditors from garnishing, attaching, or otherwise seizing—including by contractual offset, e.g., by financial institutions—any stimulus checks issued under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It further exempts from attachment any other "government emergency support funds," e.g., those that may be paid out by state, local, or tribal governments. The exemption does not extend to attachments related to domestic support.

More broadly—and unexpectedly—the governor’s order suspends Minnesota Statutes Chapter 571, which pertains to garnishments. On this issue, the order states:

"Beginning immediately, the provisions in Minnesota Statutes 2019, Chapters 571, which permit service of a garnishment summons on a consumer debtor or consumer garnishee, are suspended. For the purposes of this Executive Order, the terms "Consumer Debtor" and "Consumer Garnishee" have the definition of "debtor" and "garnishee" as used in Minnesota Statutes section 571.712, subdivisions 2(b) and 2(c), when applied to debtors and garnishees who are natural persons and whose debt originated from the purchase of goods or services purchased primarily for a personal, family, or household purpose, and not for a commercial, agricultural, or business purpose."

Notably, the penalties provision set forth in the order states that "[i]f a financial institutions acts on a pre-existing garnishment summons and garnishes funds exempted from garnishment [under] this Executive Order without actual knowledge of its source, the financial institution is not liable for any action under this Executive Order." The order contains no corresponding safe-harbor provision for judgment creditors, which raises uncertainty about how the order will be enforced against judgment creditors who have no knowledge of the sources of funds in accounts that they have garnished.

In addition, the order suspends provisions of Minnesota law relating to pre-judgment garnishments as well as provisions of Minnesota law, i.e., MINN. STAT. 550.011, relating to "judgment debtor disclosures," often called debtor interrogatories.

The order does not suspend the accrual of interest on outstanding debt.

The order remains in effect until the "peacetime emergency" declared in Executive Order 20-01 is terminated or until it is rescinded.

Oregon

The Oregon Department of Consumer and Business Services Division of Financial Regulation issued new guidance to all Oregon-regulated collection agencies and debt buyers.

The division encourages its regulated debt buyers and collection agencies to take active measures to provide help to debtors affected by the COVID-19 pandemic.

Washington

Gov. Jay Inslee extended the stay at home order through May 31 to continue the state’s social distancing strategy.

Businesses will reopen in four phases starting, as outlined in the governor’s Safe Start Washington: Phased Approach to Recovery, with limited opening including essential businesses, certain construction, auto sales, landscaping, retail curbside, car wash and pet walkers. Each phase is expected to be separated by at least three weeks. Smaller counties not hit hard by the crisis will be able to apply for a variance. 

Note that the Washington State Collection Agency Board has not approved remote collections activity, e.g., collections calling from locations for the which the licensee does not possess a branch license.

For more information on how the ACA Licensing staff can assist with your licensing needs, please contact us at Licensing@acainternational.org or call (952) 926-6547.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

Member Alert: Minnesota Exempts Stimulus Payments from Garnishment

ACA International continues to monitor state and city updates and remains available as a resource for members during this difficult time of fast-moving and often ambiguous regulatory change. In addition, our team maintains regular direct and indirect communications with state and federal regulators to receive up-to-the-minute guidance on industry-relevant orders and emergency regulations, which we parse and report on at regular intervals.

DEADLINE: Applications for the 2020 Loomer-Mortenson Scholarship program are due in 10 days!

The ACA International Education Foundation is accepting applications for the Loomer-Mortenson Scholarship program until May 15, 2020. This year, the Foundation looks forward to awarding more than $50,000 to upcoming and current college students with good grades, writing skills and a connection to the industry via their employment or the employment of a parent. The Foundation will award: $10,000 for first place; $5,000 for second place; $3,000 for third place; and additional winners will receive $1,000 each. Learn more here.

Daily Huddle

Members are invited to join ACA’s team including CEO Mark Neeb, Vice President and Senior Counsel of Federal Advocacy Leah Dempsey, Corporate Counsel Colin Winkler and Vice President of State Government and Unit Affairs Andrew Madden for a Daily Huddle at 11 a.m., Central Standard Time weekdays.

On Wednesday, Chris Schumacher, president and CEO of Optio Solutions LLC, and Sarah Headly, president at Peacock Consulting LLC, will lead a discussion on "How a Robust Quality Assurance Program Makes it Easier to Respond to a Crisis." Specifically, they will review how the elements of a quality assurance program, including policies and procedures, can really help a company pivot more quickly in a crisis.

Daily Huddle sponsors are Collectors Insurance Agency Licensing Services, Intelligent Contacts, RevSpring, Solutions by Text, BillingTree, Interprose, and TCN. Recordings of past Daily Huddle sessions are also available.

Federal News Updates

SCOTUS News

Oral arguments in the case Barr v. American Association of Political Consultants will be held via teleconference May 6, 2020, with the U.S. Supreme Court expected to focus on whether the government-debt exception to the Telephone Consumer Protection Act’s automated-call restriction violates the First Amendment and, if so, whether the proper remedy would be to sever the exception from the remainder of the statute. Read more about this matter and ACA’s approach in the April issue of Collector magazine. 

Coronavirus Aid Package

The next coronavirus aid package on Capitol Hill is expected to include a wish list of advocacy group priorities that could limit the accounts receivable management (ARM) industry’s ability to help consumers manage their payments and maintain long-term financial stability.

The Senate is in session this week and considering more aid legislation including a proposal from U.S. Sens. Sherrod Brown, D-Ohio, and Elizabeth Warren, D-Mass. Members of the U.S. House of Representatives, while still at home, are expected to start sharing drafts of priorities for the next package as early as late this week or next week. The near moratorium on debt collection is expected to remain under consideration in the House draft.

Sens. Brown and Warren detailed their proposal for the next coronavirus aid package in an article on Medium and said it needs to include "comprehensive consumer relief."

ACA International’s advocacy team has not slowed its efforts in advocating to ensure that the industry’s role in providing consumer benefits is considered in these proposals.

Here are the latest updates on state guidance:

Virginia

Gov. Ralph Northam announced a three-phase plan to ease restrictions on businesses and gatherings, when health data supports these actions, according to a news release. Phase one includes safer at home recommendations, no social gatherings of more than 10 individuals, continued social distancing, continued teleworking, face coverings recommended in public, and easing limits on business and faith communities. Each phase could last two to four weeks, or longer.

California

Gov. Gavin Newsom said the state is continuing implementation of the four-stage framework for reopening some lower-risk businesses. "Based on the state’s progress in meeting metrics tied to indicators, the state can begin to move into stage two of modifying the stay at home order Friday, May 8, with guidelines released Thursday, May 7," according to a news release.

Minnesota

Gov. Tim Walz issued an executive order exempting stimulus payments from garnishment and suspending provisions of Minnesota statutes relating to collections, notably those relating to garnishments.

The order prohibits creditors from garnishing, attaching, or otherwise seizing—including by contractual offset, e.g., by financial institutions—any stimulus checks issued under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. It further exempts from attachment any other "government emergency support funds," e.g., those that may be paid out by state, local, or tribal governments. The exemption does not extend to attachments related to domestic support.

More broadly—and unexpectedly—the governor’s order suspends Minnesota Statutes Chapter 571, which pertains to garnishments. On this issue, the order states:

"Beginning immediately, the provisions in Minnesota Statutes 2019, Chapters 571, which permit service of a garnishment summons on a consumer debtor or consumer garnishee, are suspended. For the purposes of this Executive Order, the terms "Consumer Debtor" and "Consumer Garnishee" have the definition of "debtor" and "garnishee" as used in Minnesota Statutes section 571.712, subdivisions 2(b) and 2(c), when applied to debtors and garnishees who are natural persons and whose debt originated from the purchase of goods or services purchased primarily for a personal, family, or household purpose, and not for a commercial, agricultural, or business purpose."

Notably, the penalties provision set forth in the order states that "[i]f a financial institutions acts on a pre-existing garnishment summons and garnishes funds exempted from garnishment [under] this Executive Order without actual knowledge of its source, the financial institution is not liable for any action under this Executive Order." The order contains no corresponding safe-harbor provision for judgment creditors, which raises uncertainty about how the order will be enforced against judgment creditors who have no knowledge of the sources of funds in accounts that they have garnished.

In addition, the order suspends provisions of Minnesota law relating to pre-judgment garnishments as well as provisions of Minnesota law, i.e., MINN. STAT. 550.011, relating to "judgment debtor disclosures," often called debtor interrogatories.

The order does not suspend the accrual of interest on outstanding debt.

The order remains in effect until the "peacetime emergency" declared in Executive Order 20-01 is terminated or until it is rescinded.

Oregon

The Oregon Department of Consumer and Business Services Division of Financial Regulation issued new guidance to all Oregon-regulated collection agencies and debt buyers.

The division encourages its regulated debt buyers and collection agencies to take active measures to provide help to debtors affected by the COVID-19 pandemic.

Washington

Gov. Jay Inslee extended the stay at home order through May 31 to continue the state’s social distancing strategy.

Businesses will reopen in four phases starting, as outlined in the governor’s Safe Start Washington: Phased Approach to Recovery, with limited opening including essential businesses, certain construction, auto sales, landscaping, retail curbside, car wash and pet walkers. Each phase is expected to be separated by at least three weeks. Smaller counties not hit hard by the crisis will be able to apply for a variance. 

Note that the Washington State Collection Agency Board has not approved remote collections activity, e.g., collections calling from locations for the which the licensee does not possess a branch license.

For more information on how the ACA Licensing staff can assist with your licensing needs, please contact us at Licensing@acainternational.org or call (952) 926-6547.


Follow ACA International on Twitter @ACAIntl and @acacollector, Facebook and request to join our LinkedIn group for news and event updates. ACA International members are welcome to submit news items for possible publication to comm@acainternational.org. Visit our publications page for news submission guidelines and subscriptions to ACA Daily, Collector magazine and Pulse.

Advertising is available for companies wishing to promote their products or services. Be sure to visit the ACA Events Calendar on the Education and Training page to view our listing of upcoming CORE Curriculum and Hot Topic seminars featuring critical educational opportunities for your company.


Subscribe to ACA Daily NEWSROOM

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