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Feds propose end to checks for benefit recipients

Tuesday, August 10, 2010

Treasury Department Proposes End to Checks for Federal Benefits
Consumers Union Urges Feds to Let Consumers Continue Receiving Benefits by Check and to Improve Electronic Payment Options

WASHINGTON, DC – Under new regulations proposed by the Treasury Department, Americans who receive federal benefits like monthly Social Security and Supplemental Security income will no longer be able to get these funds by check. Instead, beneficiaries will have to switch to electronic payments, either by having funds deposited directly into their accounts or onto a prepaid debit card issued by the government.
In comments filed with the Treasury Department, Consumers Union urged the agency to allow consumers to continue receiving their benefits by check and to limit the fees and improve the customer service associated with the Direct Express prepaid card for those consumers who choose this option.
“Electronic payments are not safer, easier, and more convenient than checks for all types of benefit recipients,” said Michelle Jun. Staff Attorney for Consumers Union, the nonprofit publisher of Consumer Reports. “Consumers should be able to choose the option that is best for them, including paper checks. And if the government is going to encourage benefit recipients to use prepaid cards, it should do more to limit the fees charged for using them and make them easier to use.”
The Treasury Department has received numerous comments from consumers who have raised concerns about the switch to electronic payments. Those comments and Consumers Union’s concerns are summarized in the letter linked below:
Contact: Michael McCauley – 415-902-9537 or David Butler or Kristina Edmunson – 202-462-6262