The Office of Legislative
and Public Affairs

U.S. Treasurer Anna Cabral's Remarks
Directo A Su Cuenta
National Hispanic Council On Aging
National Convention
April 8, 2006

Good afternoon. It is a real pleasure to represent the U.S. Department of the Treasury at this national convention. I am pleased to be part of this celebration of the National Hispanic Council on Aging's work with the Hispanic elderly community.

I also feel extremely fortunate to be here in Miami with all of you. Besides enjoying the great Southern Florida weather, it is a real joy to share with you one of the Treasury and Federal Reserve Banks' most important initiatives designed to help Hispanic seniors across the country.

About a year and half ago, the Treasury and Federal Reserve Banks launched a campaign called Go Direct, in Spanish known as Directo A Su Cuenta. Its focus is to motivate seniors to receive their Social Security benefits by direct deposit.

As the U.S. Treasurer, it has been a real privilege to be part of Directo A Su Cuenta, and I am excited to announce today the launch of the Directo A Su Cuenta campaign into the Miami/Dade area. With the launch of the campaign into this market, Directo A Su Cuenta representatives will begin reaching out to seniors in Miami who still receive their federal benefits in the form of a paper check, and not only inform them about the benefits of direct deposit, but also help them sign up for it. This effort will also be supported with an integrated marketing campaign including media outreach and direct mail.

Over my travels throughout the nation, I am continuously reminded of the importance and reverence of this campaign for Hispanics. Today, I'd like to share a story of a woman named Carmen Santana, who truly demonstrates the significance of this campaign to our community.

Carmen Santana is a Social Security beneficiary who attends social events at the Centro Latino de San Francisco - an affiliate of NHCOA in the Bay Area. Like many seniors, Carmen used to receive her Social Security benefits in the mail as a paper check. Every month, after receiving the check, Carmen would put it in her purse and head towards the bank to deposit it. One day, Carmen's purse was stolen and with it, her Social Security check.

Carmen went to the bank to see what she might be able to do to resolve her issue. The teller's recommendation was to select direct deposit so that she could receive her benefits every month on time and not worry about the check being lost or stolen again. That same day, she signed up for direct deposit and is now a strong advocate for Directo A Su Cuenta.

Unfortunately, Carmen's experience is not an isolated incident. Seniors are often the victims of robbery -- too often the checks can be easily forged and then cashed. In fact, last year, 65,000 Social Security and other Treasury-issued checks - worth $60 million - were forged or had unauthorized endorsements.

Receiving Social Security benefits in the form of a check can potentially put seniors, particularly Hispanic seniors', welfare in jeopardy - and I'm here with you today, so that together we get this important message out to our community and work to minimize this risk.

According to the AARP Public Policy Institute, Social Security provides benefits to almost 77 percent of older Hispanics - and represents the largest single component of retirement income for this group. Moreover, the Social Security Administration reports that without Social Security, the poverty rate for elderly Hispanic beneficiaries would increase from 18 percent to 59 percent. Unquestionably, the importance of Social Security in the lives of our community members cannot be understated. For these reasons, enrolling Hispanic seniors in direct deposit has been a longstanding effort by the Treasury.

Through Directo A Su Cuenta, our focus is to enroll these seniors in direct deposit by working alongside financial institutions and community-based organizations, which seniors know and trust. Directo A Su Cuenta has been instrumental in developing financial literacy education workshops across the country -- they are one element of a number of educational programs designed to inform our seniors about the benefits of direct deposit.

Moreover, community based organizations like the National Hispanic Council on Aging, the League of United Latin American Citizens and the National Urban League have been invaluable in carrying our messages to seniors through their affiliates across the county.

Let me give you an example of the effectiveness of our partnerships. One of our financial partners in Puerto Rico, Banco Popular has successfully worked with numerous senior centers throughout the island to provide financial education to seniors through hands on workshops and one-on-one financial counseling. This financial organization is one of the many Directo A Su Cuenta partners working with us to provide the necessary tools to improve financial literacy, as well as individual financial security among Hispanic Americans.

Directo A Su Cuenta not only communicates the importance of direct deposit - it also provides the means by which seniors can make the switch from a paper check to direct deposit. We have a dedicated call center staffed by bilingual personnel ready to assist all beneficiaries - and since July 2005, almost 400,000 beneficiaries have signed up for direct deposit through the call center alone.

The call center is only one of many ways we are helping beneficiaries sign up for direct deposit. Our Web site: www.DirectoASuCuenta.org, allows beneficiaries to access a step-by-step online tool to sign up - either on their own or through their bank or credit union.

It's a known fact that direct deposit is not only the most secure way for receiving Social Security benefits; it is also the most convenient way for all beneficiaries to have immediate access to their benefits. However, despite 95 percent of Americans having heard or read about identity theft, a survey sponsored by the U.S. Department of Treasury and the Federal Reserve Banks revealed that many are unaware of the security benefits of direct deposit over paper checks.

Sixty-two percent said that a paper check with your name on it can only be cashed if you sign or endorse it. But the fact is that checks can be forged - some more easily than others. And payments that come in the mail are especially vulnerable to theft and fraudulent endorsements.

Nearly half of those polled also said that direct deposit payments like wages, salary or government benefits go through the Internet to be deposited into your account. Actually, direct deposit works by transferring funds directly into your account through a highly secure electronic banking system - not the Internet. It is the same system used by the world's leading financial institutions.

Because of the many misconceptions about direct deposit, during the first few days of each month, Social Security recipients nationwide anxiously wait for their checks to arrive in the mail, and many of them don't leave their houses until they receive those checks, or avoid travel at the beginning of the month, when checks are expected. Then, they journey to a bank, credit union or check-cashing facility -- in the heat, rain or snow -- and wait in line to get it deposited or cashed. Often these are elderly people who rely on public transportation to cash their check. With direct deposit seniors receive their benefits at the same time each month without having to leave their homes.

Direct deposit can also provide seniors with a sense of control of their money. This is true even under the most difficult circumstances. As you know, Hurricane Katrina displaced tens of thousands of beneficiaries just days before their checks arrived in the mail. In uncertain times like these, enrolling in direct deposit can offer a much needed peace of mind to federal benefit recipients.

Finally, I will leave you with this message -- direct deposit not only benefits our seniors, but also taxpayers. Let me share with you additional information to illustrate the benefits for the entire nation.

The cost of issuing a paper check for our taxpayers is 75 cents per federal benefit payment. The Treasury issues more than150 million benefit checks annually. If all those checks were converted to direct deposit, it would save taxpayers about $120 million annually.

Currently, Florida is the 6th highest state in terms of number of Social Security Checks; following California, Texas, New York, Pennsylvania, and Ohio. In Florida, the Treasury issues more than 6 million benefit checks annually with Miami-Ft Lauderdale accounting for a quarter of those checks. If all Florida's checks were converted to direct deposit, it would save taxpayers about $4.5 million annually.

You might be asking yourself - what happens with these savings? And the answer is - almost all the money saved remains in the Social Security Trust Fund. The money saved on postage, labor, printing and other costs will be used to cover the costs of future Social Security payments.

Furthermore, the first wave of baby boomers will become eligible for retirement in 2008 and according to the U.S. Census, the estimated number of Hispanic baby boomers is 8 million. Directo A Su Cuenta is paving the way for these Hispanic seniors to select direct deposit as the best way to receive their benefits.

Direct deposit of Social Security benefits is without doubt very beneficial for our Hispanic seniors and our nation -- and we need your help in disseminating this important message to our community. I would love to see each and every one of you as ambassadors of this important national campaign. There are many ways in which you can be part of this initiative. If you are interested, please visit our Web site at DirectoASuCuenta.org or GoDirect.org for more information.

I invite you to join Directo A Su Cuenta and help make a difference in the lives of thousands of Hispanic seniors throughout the nation.

Thank you.