For years, banks routinely seized funds in a bank account even though they are exempt from garnishment under federal law. Legal services programs throughout Michigan have represented numerous low-income individuals in crisis because Social Security, SSI, Veterans, Railroad Retirement or Black Lung benefits in their bank accounts have been garnished. Low-income recipients of Social Security, SSI and other federal payments whose benefits are entirely exempt from claims of judgment creditors are left temporarily destitute when banks allow garnishments to freeze their only assets. When low-income consumers lose access to their only source of income they are unable to pay rent, buy groceries or pay utility bills. Moreover, freezing a bank account by garnishment causes outstanding checks to bounce leading to numerous charges against the account and charges by the creditors who have not been paid.

Low-income recipients of federally exempt funds are now protected from wrongful garnishment. On May 19, 2009, the Michigan Supreme Court adopted amendments to MCR 3.101, effective September 1, 2009. The new rule prohibits banks from freezing exempt funds, thereby eliminating the crisis caused by wrongful garnishment.