Subcommittee advances bill to protect $1,000 in bank accounts from garnishment

Delegate Hernandez asked the subcommittee to support HB 601, a measure that would protect $1,000 in a consumer’s bank account from garnishment and extend safeguards for Social Security and other benefit payments. Proponents argued the protection would prevent families from being left without funds to meet basic needs during garnishment proceedings.

Nadine Slocom of the Virginia Credit Union Association told lawmakers, “This ensures that members can continue to meet basic needs even when a garnishment is in place,” and urged committee approval. Jared Kauffey of AARP Virginia said the policy would stop a cycle in which garnishments trigger further financial distress, and Ishan Kallra of Pew Charitable Trusts cited data on the frequency and destabilizing effect of account garnishments.

Opponents included Reese Wilkes of the Virginia Creditors Bar Association, who cautioned that “giving an automatic exemption of $1,000 coupled with a $5,000 wildcard exemption that already exists may be a little too much to bear for the small businesses that are also creditors,” arguing the change could interfere with businesses’ ability to collect accounts receivable.

Supporters and representatives of community and consumer-banking groups said the bill’s language, including an amendment requiring financial institutions to identify protected deposits before applying an exemption, balances protections for consumers with reasonable obligations for banks. After public comment and discussion, the subcommittee moved to report HB 601 as amended; the clerk recorded a roll call and the bill reported by a vote of 9 to 1. The bill will now go to the full committee.