To help facilitate the timely, efficient and secure disbursement of the?CARES Act economic impact payments, the CFPB has issued an interpretive rule—which takes effect upon publication in the Federal Register—stating that, if certain conditions are met, certain government pandemic relief payments are not considered “government benefits” for the purposes of the Electronic Funds Transfer Act and Regulation E.
Under the EFTA and Reg E, government agencies are prohibited from requiring consumers to establish accounts to receive electronic funds transfers at a particular institution as a condition of receipt of a government benefit. By clarifying that the COVID-19 economic impact payments are not considered “government benefits,” the CFPB has effectively cleared the way for the IRS to issue these funds to consumers via prepaid cards.