× Expand frankieleon/flickr USAA could either remit funds to families via mail, or return the CARES Act payments to the IRS.

USAA, the large bank that primarily serves veterans and military members, has changed its policy and will no longer be using emergency CARES Act payments to offset existing debts from individuals. The bank will return all money confiscated from customers under the old policy, including Carrie, the woman whose family lost $3,400 to USAA when their CARES Act payment was placed into an account they thought was closed.

“For members with negative deposit account balances, USAA will pause the collection of a negative account balance existing at the time their stimulus payment was deposited for 90 days,” wrote USAA spokesman Matthew Hartwig in a statement. “This will allow members access to their full stimulus payment to help cover the costs of rent, food and other important necessities.”

Hartwig added that the policy would be applied retroactively, giving members who had negative balances on their accounts “access to their stimulus funds.” This policy will be applied “as early as today,” he said.

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It’s unclear how this will affect charged-off accounts like Carrie’s family had. The family no longer has access to the account, which they considered closed and which has $8,000 in debts on it (the family claims it’s in part from fraudulent activity). USAA could either remit the $3,400 in funds to the family via mail, or return the CARES Act payments to the IRS, enabling the IRS to mail them out to the family. Hartwig told the Prospect, “We are working through what the best solution for that will be” for that situation.

As recently as this morning, USAA customer service representatives were telling customers, according to logged chats sent to the Prospect, that their policy was to use CARES Act payments to offset debts. “Please be advised that we are not taking all stimulus checks,” said one representative to a customer, presumably trying to soothe their concerns.

As the Prospect has been reporting, banks have been given the green light by the Treasury Department to use the CARES Act emergency payments to offset existing debts. Treasury has the ability to prevent this by writing regulations that flag the payments as federal benefits, off limits to private debt collectors or banks. So far they have not done so.

But the intense interest in the stimulus checks has raised pressure, not only on the Treasury Department but individual banks that have to decide whether to take the payments. The nation’s four largest banks—Bank of America, JPMorgan Chase, Wells Fargo, and Citi—have all announced that they would pause collection on negative balances for customers for 30 days, so people can remove the stimulus payments from their accounts. USAA’s announcement of a 90-day pause gives even more breathing room.

But there are thousands of banks. The Prospect has heard from other individuals who had their CARES Act payments reduced, and The New York Times reported on some of those stories today. Only a global solution by Treasury can ensure that the payments get into the hands of individuals struggling to make ends meet and afford basic necessities. A bank-by-bank or state-by-state solution will ultimately not protect everyone in time.

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“We understand the challenges our members may face as result of this pandemic,” wrote USAA spokesman Hartwig. “We are working hard every day to offer solutions that help them make ends meet.”