Q: What is a financial agent? A: Federal banking laws grant Treasury the authority to designate financial institutions as financial agents of the government to provide services on its behalf. Financial agents act on behalf of the government in performing their duties under a relationship with Treasury. In this instance, Treasury will be designating a financial agent to provide debit card services for the Direct Express® program.
Q: What is the Financial Agent Selection Process (FASP)? A: The FASP is a set of procedures and guidelines that Treasury has established for the purpose of selecting financial agents.
Q: Why is Treasury looking for a new Direct Express® financial agent now? A: Treasury is considering applications at this time because the existing Direct Express® financial agent agreement expires on January 1, 2015. Treasury intends to make a selection by the summer of 2014.
Q: Why does Treasury offer the Direct Express® card? A: The Treasury Department published a final rule in December 2010 which requires federal benefit recipients to receive their monthly payment electronically. This electronic payment initiative will save American taxpayers $1 billion over 10 years. The Direct Express® card is offered by the Treasury to enable individuals without a traditional banking relationship to receive their payments electronically.
The Direct Express® card is a prepaid debit card payment option. Cardholders can make purchases at stores that accept Debit MasterCard®, pay bills, purchase money orders, and get cash from an ATM or financial institution that displays the MasterCard logo. No bank account or credit check is required to enroll. There are no sign-up fees or monthly account fees. Many other card services are free. Additional information about the Direct Express® card is available at www.USDirectExpress.com.
Q: Did Congress ever approve the electronic payments requirement? A: The Debt Collection Improvement Act of 1996 gave the Treasury the authority to require EFT for all federal non-tax payments, including federal benefit payments. Congress also required the Treasury to make an account available to unbanked federal benefit recipients at a reasonable cost and with the same consumer protections as accounts at financial institutions. The Treasury provides the Direct Express® card to fulfill this requirement.
Q: How is the Direct Express® card different from a credit card? A: You can only use your Direct Express® debit card if you have money in your account. The full amount of your purchase is debited from the card account at the time of the purchase or very soon thereafter. The Direct Express® card does not provide a line of credit. With a credit card, you use the card to borrow money to make purchases and pay back the credit card company in part or in full every month.
Q: Who is the current financial agent for the Direct Express® program? A: The current financial agent for the Direct Express® card program is Comerica Bank, selected through a competitive FASP in 2007.
Q: How will Treasury ensure the current FASP selection process is objective and fair? A9 A: Treasury has outlined the criteria for the Direct Express® program, which includes low card usage fees, consumer protections, and comprehensive fraud prevention measures. Financial agents that meet the requirement of the program will all be carefully assessed through a process designed to ensure objectivity and fairness.
Q: Is the Direct Express® card program successful? A: Today, more than 5 million beneficiaries have signed up for the Direct Express® card. According to a 2013 survey, 94 percent of individuals who use the Direct Express® card to receive monthly benefit payments report they are satisfied with the card. This high approval rating clearly demonstrates the success of the Direct Express® card. And while the Direct Express® card can be used for Internet transactions, one does not need Internet access to sign up or use the program.
The Direct Express® card does not require a credit check or minimum balance to enroll, and does not have any sign-up fees, monthly fees, or overdraft charges. The card enables cardholders to make purchases, pay bills, and get cash at thousands of ATMs and retail locations without having to pay a check-cashing fee, which can range from two percent to six percent of the total check amount. In fact, Direct Express® cardholders get one free ATM withdrawal per federal deposit and have access to 60,000 surcharge-free ATMs nationwide. In addition, when making purchases cardholders can get cash back free of charge.