FROM THE OFFICE OF PUBLIC AFFAIRS
June 30, 1999RR-3229
Vice President Al Gore and Treasury Secretary Robert E. Rubin announced Wednesday the final details of Treasury's Electronic Transfer Account (ETA) and the financial institutions that have committed to offer it.
Treasury designed the ETA, a low-cost account to be offered at federally-insured financial institutions, to allow federal payment recipients to take advantage of Direct Deposit. The first institutions to reach a preliminary agreement to offer the ETA are: Banco Popular de Puerto Rico & N.A., Bank of America, Britton & Koontz First National Bank, Chase Manhattan Bank, Washington State Bank and Wells Fargo & Company. The ETA will be available at some institutions late this summer.
"Broad participation by banks, savings and loans and credit unions of all sizes will be essential to the success of the account," said Secretary Rubin. "By offering the ETA, these institutions are expanding access and services to their communities, helping to bring more Americans into the financial services mainstream. ETAs will provide a simple, safe and secure way to receive federal payments."
The final ETA structure will allow federal payments recipients to sign up for an ETA, receive Direct Deposit through another commercially available account of their choice, or elect to continue receiving a paper check. By working with consumer groups and financial institutions and conducting independent market research, Treasury has developed a broadly supported program that creates access to Direct Deposit for millions of Americans who do not have accounts today.
The ETA will be available only through federally-insured banks, thrifts and credit unions. Financial institutions choosing to offer the ETA will be required to enter into a contractual agreement (ETA Financial Agency Agreement) with the Treasury Department.
Under the agreement, the ETA would:
- be an individually owned account at a federally-insured financial institution;
- be available to any individual who receives a federal benefit, wage, salary, or retirement payment;
- accept electronic federal payments;
- be subject to a maximum price of $3 per month;
- have a minimum of four cash withdrawals and four balance inquires each month, to be included in the monthly fee through any combination of proprietary ATM and/or over-the-counter transactions;
- provide the same consumer protections that are available to other account holders at the financial institution;
- allow access to on-line point-of-sale (POS) networks, if available;
- require no minimum balance, except as required by federal or state law; and
- provide a monthly statement.
Financial institutions also may choose to pay interest on account balances and/or permit additional non-federal deposits. Over the next several months, Treasury expects the number of participating institutions to increase substantially through an extensive outreach campaign designed to inform both institutions and consumers about the benefits of the ETA.
The ETA is the latest step in implementing provisions of the Debt Collection Improvement Act (DCIA) of 1996, which directs Treasury to assure that federal payment recipients have easy access to a reasonably priced account in order to receive electronic payments. Treasury will publish the final ETA attributes in the Federal Register in the near future.
Treasury published on Sept. 25, 1998, the final rule governing federal payments by electronic funds transfer (EFT). The final rule provides for the ETA and details the broad circumstances under which recipients can continue to receive paper checks if electronic deposit would cause a hardship. The final rule emphasizes recipient choice and the importance of ensuring that recipients are not disadvantaged or forced into making a choice that is not right for their circumstances.