WASHINGTON, DC – The Center for Responsible Lending (CRL) today released the latest installment of its “In Focus” video series, calling for updated federal laws to prevent families from falling into poverty due to excessive wage seizures by employers.
CRL advocates for the federal government to protect $12,000 in bank accounts and an associated $1,000 per week in wages from garnishment for workers repaying outstanding consumer debt. The current formula, based on the federal minimum wage and which hasn’t been updated since the late 1960s, protects only $217.50 of weekly wages from seizure. CRL believes this long-standing policy has led to excessive debt collection levies that disproportionately affect Black, Latino, low-wage and low-wealth employees, and can force them to choose between paying for rent, food or medicine.
In the debt collection video, Lucia Mattox, director of western states outreach and senior policy manager at CRL, explains that modernizing wage garnishment policies would allow consumers to meet their essential needs, while being able to responsibly manage repayment of their debt.
“Protecting $12,000 in a bank account will help low-income families develop a savings cushion and allow them to weather emergencies for at least a few months, which is vital as the financial impacts of the COVID-19 pandemic persist,” Mattox said. “Further, $1,000 in wages per week reflects the amount a small family needs to meet basic needs.”
Mattox said about 4 million Americans are subject to wage garnishments and more than 64 million people are being pursued by debt collectors.
“The federal government must act now to prevent more unrelenting, debilitating debt for consumers,” Mattox said.
CRL’s “In Focus” video series, available on its YouTube channel, is designed to make complex policy topics easier to understand and provide information to ensure financial fairness for all Americans.
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