USAA has responded to the significant backlash over its seizing of stimulus payments. While the financial institution had been using stimulus checks to pay off its customers' accounts that had a negative balance, it has put a pause on all overdrafts and late fees for 90 days from the date it was deposited.
"This will allow members access to their full stimulus payment to help cover the costs of rent, food and other important necessities," USAA spokesman Matthew Hartwig wrote in an email to the San Antonio Express on April 16. He added that USAA is working on finding "the best solution" for members who've already had their stimulus check used to pay off any delinquencies. USAA boasts about 13 million members, which are comprised of current and former members of the military.
USAA was one of several financial institutions and debt collectors that had started seizing the individual $1,200 stimulus payments against any delinquent balances. There was significant blowback from both politicians as well as social media, given that millions of people are out of work and have filed for unemployment due to the financial impact of coronavirus. Lauren Saunders, associate director of the National Consumer Law Center, has called on the Treasury Department to act out against these extenuating circumstances.
"Congress authorized these payments because people have lost their jobs and are desperate for money for food," Saunders told The Telegraph. "The money needs to go to food, not the debt collectors or back bank fees. I hope Treasury reverses itself immediately because every day that goes by that people can't access their money, they are wondering how they are going to eat."
Unfortunately, the outlet also reported that some officials from the Treasury Department have privately told outside advisers that they wouldn't be able to act effectively without new legislation from Congress. The American Bankers Association, the Consumer Bankers Association and the Financial Services Forum have since started urging Congress to revise the Cares Act in an open letter to lawmakers to help ensure these provisions are put into law.
There have been other drawbacks to the initial rollout of stimulus payments, namely the fact that multiple payments were deposited into the wrong account. Additionally, as people anxiously wait for their checks around the country, the IRS is unable to provide phone support and has been plagued with website issues as users overloaded the system trying to track their payments.