Update on Garnishment of Stimulus Funds

04/23/20

As previously reported, Attorney General Yost issued a statement on April 13th articulating his office’s position that stimulus funds are exempt from garnishment under Ohio Revised Code 2329.66(A)(12)(d). Under this provision, AG Yost has said that, according to his reading of the law, attachment for court-ordered child support and some cases of spousal support is permitted. AG Yost has also publicly made statements acknowledging a bank’s legal right to utilize the stimulus funds for offsets based on bank contracts with customers.

So far, OBL has learned of one ruling directly on this issue from a local court. On April 17th, Judge Todd McKenny in the Barberton Municipal Court in Summit County issued a one-page order recognized the legal argument AG Yost put forward. The debtor challenged the attachment of funds by Children’s Hospital Medical Center of Akron as exempt from attachment or garnishment as federal stimulus funds. Of note, the bank attachment was filed on March 20th, 2020—well before the stimulus funds had been disbursed.

The Court ordered the attachment cancelled and any funds held by the Clerk of Court’s Office or by the bank involved to be disbursed back to the debtor. If you are aware of any other instances where this issue has come up, please contact Don Boyd, OBL State Government Relations Director and Legislative Counsel. Also, as previously mentioned, bankers are encouraged to consult legal counsel to review any potential compliance issues.