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- Banks are allowed to use customers' stimulus payments to cover debts.
- Ally Financial said Wednesday it would forgive overdrafts — without asking for repayment — so clients can receive their whole check.
- The bank, like most of its peers, has also increased its payment leniency on loans.
- Visit Business Insider's homepage for more stories.
Ally Financial, the digital-only bank with some $180 billion in assets, said Wednesday that it was forgiving many customer's debt in order for them to receive their full $1,200 coronavirus stimulus payment.
As part of the relief package passed by US lawmakers in March, banks can use the direct deposit payments to pay off debts owed by the customer receiving the check. Ally, however, said it would erase any overdrafts and not ask for customers to repay anything.
"It is, in effect, a gift to customers in need," the bank said.
In recent weeks, as the coronavirus pandemic forced businesses around the world to close, sending tens of millions of Americans to unemployment assistance and plunging the US economy into recession, Ally has allowed customers to defer payments on many loans.
Earlier in April, Ally said 25% of customers had asked for help on their auto loans, a significant portion of the company's business.
Business Insider has asked Ally for more details, like any limits on overdraft forgiveness or total forgiven so far, and will update this post if any information is received.
"At Ally, we recognize there has never been a more critical time to deliver on our promise to 'do it right', and we are committed to supporting the people we serve safely and confidently through this crisis," Jeffrey Brown, Ally's chief executive, said in a press release.
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