|Treasury to Encourage, Not Require, Electronic Payment of Federal Benefits
The U.S. Treasury Department has decided to encourage
recipients of federal benefit checks to receive their payments electronically, not require
them to do so.
Readers of FDIC Consumer News will recall that a 1996 law
requires the electronic payment of most Social Security, disability, veterans and
other federal benefits starting in 1999. Congress passed the law to make payments safer
and more reliable because paper checks frequently get lost, stolen or forgotten. Also, it
would substantially cut the governments processing costs. The Treasury, which is
responsible for carrying out the law, issued a proposal in September of 1997 that would
have required electronic payments in most cases, but would allow people facing certain
hardships to apply to continue receiving paper checks in the mail.
After hearing from consumer organizations and other groups concerned about a program
that mandates electronic payments, the Treasury announced in June it would greatly broaden
the waiver categories for people who wish to continue receiving paper checks. Treasury
Under Secretary John D. Hawke, Jr., said the final rule will ensure that recipients
are not forced into choices that are not right for them. The Treasury Department
also will conduct a major education campaign emphasizing that no payment will be withheld
or delayed because of the new rules, and explaining to recipients their options (including
continuing to be paid by paper check).
For more information, contact the Treasurys Financial Management Service, 401
14th Street, SW, Room 420, Washington, DC 20227, phone (202) 874-6540 or go to the
Treasurys Internet site (www.fms.treas.gov
and click on EFT 99.)