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Overview
Electronic Funds Transfer (EFT) provides for electronic payments and collections.
EFT is safe, secure, efficient, and less expensive than paper check payments and collections. While it costs the U.S. government $1.03 to issue each check payment, it costs only 10.5 cents to issue an EFT payment.
U.S. Treasury Department Proposes Rule to Make Federal Benefits and Other Nontax Payments Electronic
On June 17, 2010, the U.S. Department of the Treasury published a proposed ruleproposed rule in the Federal Register to make all federal benefit and other nontax payments electronic by March 1, 2013. The reason this is being proposed is because electronic payments are safer and more convenient than checks and save taxpayer dollars. Information about the proposed rule can be found below. To submit a comment, go to www.regulations.gov, docket FISCAL-FMS-2009-0003.
Frequently Asked Questions
Q: What is the proposed initiative about, and who will be affected?
The U.S. Department of the Treasury has announced an initiative proposing to require people to receive their federal benefit payments electronically. Anyone newly enrolling in Social Security or other federal benefits would need to choose to receive their payments via direct deposit or Treasury’s Direct Express® debit card, starting on March 1, 2011. In addition, all individuals receiving benefits by paper check would need to switch to electronic payments by March 1, 2013.
Q: What is the process for finalizing this initiative?
After publication of the notice of proposed rulemaking in the Federal Register, the public may comment on the proposed rule for a set number of days. After the comment period closes, the Treasury Department will review the comments and issue a final rule.
Q: Where do I go if I want to ask a question or submit a comment?
You can send an e-mail to eft.comments@fms.treas.gov or call (202) 874-6619 to ask a question. To submit your comments about the proposed rule after it is published, please go to www.regulations.gov, using docket FISCAL-FMS-2009-0003. For questions regarding the proposed rule, e-mail eft.comments@fms.treas.gov or call (202) 874-6619.
Q: Why is the Treasury Department doing this now?
The Treasury Department has proposed this initiative for a number of reasons, including:
Electronic payments are widely acknowledged as providing a safer, more convenient and cost-effective way for people to get their payments. Yet, about 11 million Americans still receive their Social Security and Supplemental Security Income (SSI) payments by check and too many new enrollees are not signing up for electronic payments when they apply for benefits.
The initiative reflects the widespread use and accessibility of electronic banking today, including the introduction two years ago of the Direct Express® Debit MasterCard® card for people without bank accounts.
This initiative will provide significant, measurable benefits to the American people, in terms of saving taxpayer dollars, decreasing the impact on the environment and reducing the administrative burden on government.
To provide greater consumer protection, the Treasury Department and the agencies that issue benefit payments have also published a proposed rule that will protect electronic benefit payments from garnishment.
Q: How will this impact the Go Direct® campaign?
There will not be any immediate impact on the Go Direct campaign, which for the past five years has partnered with more than 1,800 organizations to encourage federal benefit check recipients to switch to direct deposit. However, the Treasury Department wants partnering organizations to be aware of this proposed initiative, because – if approved – it could eventually affect some of the people they serve.
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