Some banks are taking stimulus checks for unpaid debt or fees. Here's what to do if it happens to you.

• Under the CARES Act, banks have the implicit right to take stimulus payments that have been deposited into customers' accounts to offset delinquent debt or unpaid fees.
• Four of the largest US banks have promised not to take people's stimulus money, but many Americans who bank elsewhere are still vulnerable.
• The Treasury Department has the power to prevent banks from doing this and advocates are pushing for it to do so.
• If you notice your payment has been taken by your bank, an expert recommends calling your bank and asking it to reconsider. If that doesn't work, call attention to a member of Congress and post on social media.
• Read more personal finance coverage.

The IRS began dispatching stimulus payments to millions of Americans this week by way of direct deposit.

Electronic payments are supposed to put cash in hands much quicker than a paper check, but some people's money is bypassing them completely and being used to pay off negative balances.

According to a report from the Prospect's David Dayen published on Tuesday, banks have the implicit right to seize a coronavirus relief payment deposited into a customer's account and use it to offset any delinquent loans or overdraft fees owed to the bank.

"There's nothing in the law that precludes that action," a Treasury Department official reportedly said in reference to the CARES Act on a phone call with banking officials. The bill does, however, explicitly prohibit debt collectors from snatching stimulus payments for unpaid state or federal debts other than child support.

What to do if your bank takes your stimulus check

In some cases, offsetting negative account balances is an automatic process. When money is added to an account, it automatically applies to the negative balance.

If you have a negative balance and you're worried this may happen to you — or it already has — there isn't a universal solution, unfortunately. In a conversation with Business Insider, Lauren Saunders, associate director at the National Consumer Law Center, offered these tips:

1. Call the bank and insist they reverse it. If they don't comply, ask to speak to a supervisor.

2. If that doesn't work, reach out to a reporter who can publicize the ongoing issue or call attention to a member of Congress who has the power to reach the decision makers.

3. Use social media to "do whatever you need to do" to make the issue known.

People who bank with credit unions or local banks may be more vulnerable

This week, the four largest US banks — Wells Fargo, JPMorgan Chase, Citibank, and Bank of America — have said they will pause collections on unpaid balances so customers can get their full stimulus payment, according to a report from BI Intelligence. USAA, which offers banking and other financial services to members of the military and their families, was garnishing stimulus payments to offset debts, but quickly reversed its decision and promised not to touch the money for 90 days.

"A few different things are going on," Saunders said. "The biggest banks are most concerned about reputation and more willing to do the right thing here. They also have more modern systems that enable them to shut off the offsets. They're less dependent on fee revenue, and smaller banks are more dependent on charging fees to their customers." In many cases, this leaves people who bank with credit unions and smaller local banks less protected.

As Dayen reported in a follow-up story, "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."

"We're pushing Treasury and pushing Congress to act at the next possible opportunity, but a number of states have already acted," Saunders told Business Insider. So far, Massachusetts and Ohio have both issued statements disallowing private debt collectors from garnishing stimulus payments because they're categorized as federal assistance.

• Read more on managing your money in this tumultuous time:
• 3 options for people struggling to pay their mortgage during the global health crisis
• 4 reasons to get disability insurance, even if you don't think you need it
• If you've been financially impacted by the coronavirus, you may be able to pause payments on these 8 bills
• How to get a stimulus check from the US government, which could pay up to $1,200 if you qualify
• In response to the coronavirus, credit card issuers like Amex and Capital One are letting customers skip payments without interest and more