EFT Provision of the
Debt Collection Improvement Act of 1996

31 CFR 208: EFT Final Rule
Final rule published in the Federal Register September 25, 1998, offers guidance for EFT conversion.

Amendments to law relating to Electronic Funds Transfer (ONLY)
updated 4/26/96

CHAPTER 10
of the
OMNIBUS CONSOLIDATED RESCISSION
AND APPROPRIATIONS ACT OF 1996
PUBLIC LAW 104-134
DEBT COLLECTION IMPROVEMENT ACT OF 1996
SECTION 31001 (X)
AMENDMENT TO 31 U.S.C. 3332

	(x)(1) AMENDMENTS RELATING TO ELECTRONIC FUNDS TRANSFER.
--Section 3332 of title 31, United States Code, popularly known as the 
Federal Financial Management Act of 1994, is amended-- 
		(A) by redesignating subsection (e) as subsection (h), and 
inserting after subsection (d) the following new subsections:
	"(e)(1) Notwithstanding subsections (a) through (d) of this section, 
sections 5120 (a) and (d) of title 38, and any other provision of law, 
all Federal payments to a recipient who becomes eligible for that type 
of payment after 90 days after the date of the enactment of the 
Debt Collection Improvement Act of 1996 shall be made by electronic 
funds transfer.
	"(2) The head of a Federal agency shall, with respect to Federal 
payments made or authorized by the agency, waive the application of 
paragraph (1) to a recipient of those payments upon receipt of 
written certification from the recipient that the recipient does 
not have an account with a financial institution or an authorized 
payment agent.
	"(f)(1) Notwithstanding any other provision of law (including 
subsections (a) through (e) of this section and sections 5120 (a) 
and (d) of title 38), except as provided in paragraph (2) all 
Federal payments made after January 1, 1999, shall be made by 
electronic funds transfer.
	"(2)(A) The Secretary of the Treasury may waive application 
of this subsection to payments-- 
		"(i) for individuals or classes of individuals for whom 
compliance imposes a 
hardship; 
		"(ii) for classifications or types of checks; or 
		"(iii) in other circumstances as may be necessary. 
	"(B) The Secretary of the Treasury shall make determinations 
under subparagraph (A) based on standards developed by the Secretary.
	"(g) Each recipient of Federal payments required to be made 
by electronic funds
transfer shall--
		"(1) designate 1 or more financial institutions or other 
authorized agents to
which such payments shall be made; and
		"(2) provide to the Federal agency that makes or authorizes 
the payments
information necessary for the recipient to receive electronic 
funds transfer payments through each institution or agent designated 
under paragraph (1)."; and
		(B) by adding after subsection (h) (as so redesignated) the 
following new
subsections:
	"(i)(1) The Secretary of the Treasury may prescribe regulations 
that the Secretary considers necessary to carry out this section.
	"(2) Regulations under this subsection shall ensure that 
individuals required under subsection (g) to have an account at a 
financial institution because of the application of subsection (f)(1)--
		"(A) will have access to such an account at a reasonable cost; and
		"(B) are given the same consumer protections with respect to 
the account as
other account holders at the same financial institution. 
"(j) For purposes of this section-- 
		"(1) The term 'electronic funds transfer' means any transfer 
of funds, other 
than a transaction originated by cash, check, or similar paper 
instrument, that is initiated through an electronic terminal, telephone,
computer, or magnetic tape, for the purpose of ordering, 
instructing, or authorizing a financial institution to debit or 
credit an account.  The term includes Automated Clearing House transfers, 
Fed Wire transfers, transfers made at automatic teller machines, 
and point-of-sale terminals. 
		"(2) The term 'Federal agency' means-- 
			"(A) an agency (as defined in section 101 of this title); and 
			"(B) a Government corporation (as defined in section 103 of title 5). 
		"(3) The term 'Federal payments' includes-- 
			"(A) Federal wage, salary, and retirement payments; 
			"(B) vendor and expense reimbursement payments; and 
			"(C) benefit payments. 
	Such term shall not include any payment under the Internal Revenue Code of 1986."
	(2) AMENDMENTS RELATING TO SUBSTITUTE CHECKS.--Section 3331 of 
title 31, United States Code, is amended--
		(A) in subsection (b), by striking "subsection (c)" and 
inserting "subsection (c) 
or (f)";
		(B) by redesignating subsection (f) as subsection (g); and
		(C) by inserting after subsection (e) the following new subsection:
	"(f) The Secretary may waive any provision of this section as may be 
necessary to ensure that claimants receive timely payments.".