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Washington
Treasury to offer electronic SS fund access to unbanked
WASHINGTON (1/9/08)—In an ongoing effort to become an “all-electronic Treasury,” that department has announced it will launch the Direct Express card as a means to distribute checkless government aid funds to unbanked consumers. The Direct Express card will be introduced in the spring and is scheduled to be phased into national distribution by the end of the summer. The Treasury estimates that four million Social Security and Supplemental Security Income (SSI) check recipients do not have bank accounts. The department maintains that paper checks place recipients at greater risk of delivery delays due to poor weather or national or local emergencies. Also, that they are subject to other check-related problems, such as lost or stolen checks. American taxpayers would save, the Treasury’s Financial Management Service (FMS) estimates, about $44 million annually if every unbanked federal check recipient signed up to use the new card. "The explosive growth in the prepaid card industry offers an important opportunity for Treasury to give unbanked payment recipients secure, easy access to their funds, at low or no cost to the cardholder,” FMS Commissioner Judy Tillman said in a release. “We ultimately would like to see an all-electronic Treasury - with all the security, efficiency and cost savings that would entail. This card takes us closer to that goal by combining the best in payment innovation with sound public policy,” she added. Under the new program, payments each month will be automatically deposited on the Direct Express card account on the federal beneficiary's designated payment day. The arrangement will provide faster access to the funds than would a paper check that would be sent through the U.S. Postal Service. Also, card holders will be able to access their money at ATMs and financial institutions nationwide. They will be able to use their card to get cash back and make purchases at retail locations, as well as pay bills and make purchases online. In addition, the accounts will be PIN-protected, federally insured, and subject to federal consumer protection regulations, the FMS announcement said. The Treasury in recent years has been promoting direct deposit of SS and SSI funds through its Go Direct campaign, and claims 1.6 million direct deposit conversions through its efforts. The Credit Union National Association is a Go Direct partner.


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