Senator McCaskill Presses for Quick Action to Stop Garnishment of Senior Benefits

November 20, 2007 -- WASHINGTON, D.C. – With the holiday season upon us, too many seniors, veterans, and disabled Americans are facing empty bank accounts thanks to an illegal, but increasingly common, practice of creditors garnishing government benefits, including safety-net programs such as Social Security. The result for some could be an empty table at Thanksgiving.

U.S. Senator Claire McCaskill and seven of her colleagues are calling for the government to take action to prevent this problem from continuing. They sent a letter today to the director of the Office of Management and Budget (OMB) asking that the agency take immediate steps to help ensure that financial institutions do not garnish accounts in which Social Security, Supplemental Security Income (SSI), and veterans benefits are electronically deposited. Federal law currently bars financial institutions from using this practice, but that has not stopped banks from freezing or accessing accounts on behalf of creditors.

“Social Security is meant to provide a safety net for some of the most vulnerable in our society,” McCaskill said. “It’s just plain wrong to allow creditors to tap into these funds, leaving people with virtually nothing. I hate to think that this is happening to Americans during this holiday season.”

In August, at the request of McCaskill and Senators Max Baucus (D-MT) and Herb Kohl (D-WI), the Inspector General of the Social Security Administration began conducting an investigation of financial institutions into the use of this practice. In the meantime, McCaskill says she and her colleagues will continue to press the Bush Administration to take quick action to curb this growing problem that is undercutting the safety net established by Social Security.

McCaskill and the others who signed the letter want the OMB to begin the process of clarifying the legal responsibilities of banks with the four other federal banking regulatory agencies – the Social Security Administration, the Department Veterans Affairs, the Department of Justice, and the Treasury Department. A rule clarification by these agencies would make it harder for this practice to continue.

Source: Senator Claire McCaskill

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