This is how you can get your second stimulus check faster
This is how you can get your second stimulus check faster

This is how you can get your second stimulus check faster

While the details of another stimulus package are still uncertain, it is likely that Americans will eventually get a new round of direct payments.

Although Congress has left the Capitol for its annual summer vacation after stimulus package negotiations reached a stalemate, President Trump has tweeted today that he has instructed the finance minister to prepare to issue stimulus checks of up to $ 3,400 for a family of four.

Both great pieces of the past bill on the table provides a similar payout to the Coronavirus Aid, Relief, and Economic Security (CARES) statutory provision that approved $ 1,200 payments this spring.

But there is some concern about how quickly another round of stimulus payments can be delivered to struggling Americans. Acceleration of the payment system depends on the method chosen by the legislators and how fast they act.

CARES Act Stimulus Payments: What Went Wrong

Pr. By June 3, the U.S. Treasury Department, in coordination with the IRS, had provided $ 159 million in financial impact payments to eligible individuals; estimated 30 to 35 million payments left for postal mail by paper check.

But even though many people saw their payment come up quickly with direct deposit, this was not the case for everyone.

Some people were notified that their payment went to one old bank account or a previous address.

Some completed payments were made to deceased Americans. A GAO report found that about 365,000 low-income Americans did not receive the payment of $ 500 per. child, they were expected to receive with their one-time payment of $ 1,200 per child. adult.

And some people who received prepaid debit cards that contained their payment instead of the checks they expected threw away their payments by mistake.

Two primary options have been discussed by lawmakers, but would require swift action to make a difference for another round of stimulus checks.

Real-time payments would provide a quick solution

A measure that could reduce the time it takes for people to access their stimulus payments could be implemented by the Federal Reserve. It is simply a matter of reducing the time it takes for a check from the government to offset.

Som Brookings Economic Studies Fellow Aaron Klein explained in a July statement, the Fast Money Available Act of 1987 specifies that checks from the Ministry of Finance must be available for withdrawal from the recipient’s bank to the actual recipient “no later than the banking day after the banking day” in which the funds are deposited.

In theory, it is no more than two business days. But the rule does not take into account holidays or weekends, which can extend this waiting period to another three to five days.

For example, a person waiting to access their annual tax return may find that this is a hassle but not a major obstacle. But in the case of stimulus payments, it can put a huge delay on funds that are seen by many as a lifeline for unemployed and otherwise struggling Americans during the pandemic.

Some banks gave people early access to their stimulus checks instead of waiting until the next business day. “A treasury check is not going to jump,” Klein wrote. But that was not the case across the board.

“To change this one line [of the law] that ‘immediately’ would save people millions in overdrafts, check redemption fees, late fees, unnecessary payday loans and countless other hardships and worries, ”Klein argued.

The Fed has the authority to make the change. But some lawmakers have also called on Congress to approve an update to the rule. Payment Modernization Act of 2019, which was introduced in July last year by Sens. Chris Van Hollen (D-MA) and Elizabeth Warren (D-MA) along with reps. Ayanna Pressley (D-MA) and Jesús “Chuy” García (D-IL) aim to update Federal Reserve operations to create a national real-time payment system.

In addition, in August 2019, the Federal Reserve introduced its proposal for FedNow, a real-time payment system. But a September hearing in the House Committee on Financial Services showed that support for these measures is not universal. A real-time payment system run by the federal government could hamper competition on the banking scene, opponents have argued.

‘FedAccounts’ could provide long term help to the unbanked

Meanwhile, there is ongoing discussion about the possibility of getting the Federal Reserve to dive even further into the banking scene by launching digital accounts to get money to the recipients faster.

In March 2020, prior to the adoption of the CARES Act, the Rep. Maxine Waters (D-CA) legislation that would create digital payment accounts for people without bank accounts. These digital accounts, called “FedAccounts”, would be maintained by Federal Reserve banks and charge zero fees to participants. The move would make it easier for underbanked and unbanked people to access their financial aid payments without having to pay check deposit or other access fees.

However, setting up the FedAccounts system, complete with debit cards and online banking services, would take a long time and support. In addition, it would require coordination with United States Postal Service– The bill specifies will provide banking services and access to ATMs for participants with limited access to Federal Reserve Bank branches.

The Financial Technology Task Force under the House Committee on Financial Services hosted a hearing on the potential of FedAccounts to accelerate stimulus payments in July.

“We have the technology. There are a few things on the edge that we could do,” said Professor Mehrsa Baradaran of the University of California Irvine School of Law during that hearing. “We would need ATMs at certain post offices. We would need the Fed to make real-time payments. “But Baradaran called these items” well within our technological capacity. ”

How to prepare now for your next stimulus check

It took about three weeks before the previous stimulus payments started arriving with direct deposit, so you can expect a similar waiting time when and if another round of payments is approved. And when your check arrives, you can still expect to wait a few days to access the funds, as it is unlikely that significant changes will be implemented immediately.

If an emergency package is signed into law, you will want to see IRS Download my payment portal for instructions. Since the US Treasury Department and the IRS worked together to mediate payments in the spring, the portal will be the best place to get information about your eligibility for payment.

During the rollout of CARES Act payments, you could add direct deposit information through the portal, but you could not make changes to that information or update your postal address unless your payment could not be provided and was returned to the IRS. It is currently unclear whether the system will be updated to provide greater flexibility for eligible recipients.

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