Common Questions: For Financial Institutions

• Enrollment
• Financial Agency Agreement
• Additional Features
• Cash Access and Balance Inquiries
• Point of Sale Access
• Account Opening and Closing
• Fees
• Regulatory
• Other Questions

Enrollment

How does a financial institution enroll in the ETA^SM program?

Financial institutions should call the financial institution help desk, at 1 (888) ETA-FRBK (1 (888) 382-3725), for information about enrolling in the ETA program.

What steps must a financial institution take to ensure proper enrollment when completing the Financial Agency Agreement?

To expedite enrollment as an ETA provider, a financial institution should complete the following steps:

• Complete pages 1 & 7 and Attachments A & B of the Financial Agency Agreement.
  
  
• Affix the financial institution's seal onto Attachment A of the Financial Agency Agreement.
  
  
• Submit an excerpt from the Board of Directors’ resolutions approving the financial institution’s participation in the ETA program.
  
  
• If the financial institution is a credit union or thrift, submit a complete list of branch locations.
  
  
• List the name and telephone number of the financial institution’s primary contact on Attachment B of the Financial Agency Agreement.
  
  
• List the effective date - the date the financial institution will begin offering the ETA to customers - on Attachment B of the Financial Agency Agreement.

Are financial institutions required to offer the ETA?

No. Participation by financial institutions in the ETA program is voluntary.

Will Treasury allow non-financial institutions to offer the ETA?

No. Treasury will not allow non-financial institutions to offer ETAs. Further, Treasury will not allow financial institutions that offer the ETAs to enter into arrangements with non-financial institutions to provide access to these accounts. ETAs are designed to meet the statutory obligation that recipients have access to an account at a reasonable cost and with consumer protections comparable to other accounts at the same financial institution. Treasury believes that this obligation is best met by allowing only federally insured financial institutions to provide access. Such access may be provided through branches and/or through a regional or national network of ATMs and POS terminals.

May any financial institution offer ETAs?

Only federally insured financial institutions to provide access. Such access may be provided through branches and/or through a regional or national network of ATMs and POS terminals.

Are credit unions permitted to offer ETAs?

Yes. Federally insured credit unions are also eligible to offer ETAs subject to any legal constraints on their authority to do so. A federally insured credit union is permitted to offer an ETA to any eligible Federal payment recipient who falls within the field of membership of the credit union.

Are financial institutions that choose not to offer the ETA restricted from accepting electronic Federal benefit payments for their customers? Will these institutions be subject to additional fees or charges?

No. Financial institutions that do not offer the ETA are not restricted from accepting direct deposit Federal benefit payments, and are also not subject to any additional fees or charges.

Financial Agency Agreement

What is an ETA Financial Agency Agreement?

The ETA Financial Agency Agreement is an agreement between Treasury and a financial institution designating the financial institution to act as Treasury's Financial Agent in providing the ETA. Any financial institution that offers the ETA must do so subject to the terms and conditions of the agreement. The agreement incorporates the final features of the account and other account criteria, such as standards for closing accounts.

What is the role of the Federal Reserve Bank of Dallas in the ETA program?

The Federal Reserve Bank of Dallas (FRB Dallas) acts as Treasury's Fiscal Agent. FRB Dallas manages financial institution enrollment in the program, receives completed Financial Agency Agreements from those institutions seeking to offer ETAs, distributes free Treasury ETA marketing materials for financial institution use, and responds to recipient and financial institution inquiries. In addition, FRB Dallas maintains and makes available a list of all financial institution locations offering ETAs on an Internet Web site, http://www.eta-find.gov, and via a voice response system.

In addition to completing the Financial Agency Agreement, what information must financial institutions provide to Treasury?

Participating financial institutions must complete and provide to the Federal Reserve Bank of Dallas, acting as Treasury's Fiscal Agent, the enrollment form attached to the ETA Financial Agency Agreement. Once the enrollment form is received, the financial institution will receive the Program Implementation Guide, and other information, concerning the offering of the ETA. Financial institutions must report to Treasury by the 15th day of each month key information, including the number of ETAs opened and closed during the previous month and the numbers of accounts open as of the end of the previous month. Financial institutions must also provide the routing and transit number and an account number for the institution that will be used for compensation of set-up fees. Additional information about ETA compensation procedures is on the Internet Web site, www.fms.treas.gov/eta/reports/regulations/etaguide.pdf (ETA Implementation Guide).

What other information does Treasury anticipate requesting from financial institutions?

In addition to the enrollment form and monthly reports described above, financial institutions may be required to provide Treasury with other information and documentation, including internal audit reports, necessary for Treasury to verify the number and status of ETAs, to facilitate payment of set-up fees, and ensure compliance with the terms of the Financial Agency Agreement.

If a financial institution terminates its agreement with Treasury, what will happen to the institution’s ETAs?

If a financial institution terminates its agreement with Treasury, it must stop opening new ETAs. In addition, it must close existing ETAs in a manner that allows for the orderly transfer of the accounts to another financial institution. It should be noted that, at any time, the financial institution may offer an ETA holder the option of switching from an ETA to a traditional checking or savings account at that financial institution if it better meets the recipient's needs.

Additional Features

Does the ETA pay interest?

Financial institutions may, at their option, pay interest on the account, but in no case may a financial institution charge a fee that exceeds the maximum monthly fee of $3.00, which Treasury specifies in the Notice of Electronic Transfer Account features. Also, financial institutions may not require that an ETA maintain a minimum balance in connection with the payment of interest.

Will the ETA include a checking account feature?

No. Treasury is not including a checking feature as part of the ETA. Treasury believes that keeping the account as simple as possible will ensure that the account is available at the lowest possible cost to recipients. Check-writing capability, while desirable for some, increases the potential for overdrafts and overdraft fees. Treasury also believes that fewer financial institutions will elect to offer an ETA that includes this feature because of increased risk to the financial institution.

Is Automated Clearing House (ACH) debit capability an allowable ETA feature?

No. Financial institutions are not allowed to offer ACH debit capability as an additional ETA feature. However, if an ETA holder authorizes an ACH debit to his/her account without the financial institution's knowledge, the financial institution is not required to reject the ACH debit. In the event that a financial institution becomes aware of an ACH debit from an ETA, the Financial Agency Agreement does not require the financial institution to close the ETA; however, the financial institution is encouraged to explain to the ETA holder that ACH debits are not an allowable feature of the ETA. If the financial institution decides to close the ETA on the grounds of misuse, customary closing procedures should be followed.

May the ETA include recurring bill payments?

No. The ETA may include only those features listed in the ETA Notice. As indicated in the ETA Notice, the account does not include a bill payment feature.

When deposits are allowed through the bank’s ATM, may the bank issue holds on the availability of the funds?

Yes. The financial institution may issue a hold on ATM deposits to an ETA as long as this practice is consistent with the institution's hold policies for all other accounts. All hold policies must be compliant with Regulation CC (Expedited Funds Availability Act), which governs when financial institutions must make funds available on deposited items.

The ETA Notice states that financial institutions may not offer ETA holders more features than those specifically stated in the Notice, but that financial institutions may offer services and may charge for these services. What is the difference between features and services?

Account features are those items addressed as part of the ETA account attributes and essentially are anything that define the functionality of the account. Examples of account features that are not allowed by the notice are check writing and ACH bill payment. In contrast, account-related services are services provided to account holders but are not addressed as part of the ETA account attributes, such as account research, providing a new ATM card, etc. Financial institutions may provide these services and may charge ETA holders the customary fee charged to all other account holders at the financial institutions.

Cash Access and Balance Inquiries

May a financial institution offer an ETA with teller-only (over-the-counter) access?

Yes. A financial institution may offer ETAs that includes teller-only access for cash withdrawals and balance inquiries, as long as the ETA provides for all of the required account features. However, if a financial institution offers on-line POS access to its non-ETA holders, it must also offer on-line POS access to ETA holders in accordance with the Financial Agency Agreement.

How many free cash withdrawals and how many free balance inquiries must be provided for an ETA holder per month?

An ETA must offer at least four cash withdrawals and at least four balance inquiries per month through any combination of proprietary ATM or over-the-counter transactions to be included in the monthly fee. It is up to the financial institution to determine if a fee will be assessed for additional cash withdrawals, balance inquiries and foreign ATM use, and to disclose that fee to its ETA holders.

If a financial institution provides a receipt with an account balance when funds are withdrawn from an ETA, does that count as one of the four required balance inquiries?

No. Incidental account balance information given on a receipt following a deposit or withdrawal transaction is not considered a balance inquiry. A minimum of four free balance inquiries, independent of other transactions, is required.

May a financial institution limit the maximum per-day ATM withdrawal amount of ETA holders to an amount lower than that offered to other holders?

No. ETA holders must be allowed to withdraw the same maximum amounts per day at ATMs as other holders of the financial institution.

A financial institution that has only one ATM, for which it charges a fee, even to its own holders, has worked out an agreement with an ATM network whereby its holders would be able to withdraw their money, without a fee, from this network's ATMs. Would Treasury agree to such an arrangement for ETA holders?

Yes. The financial institution must disclose, in accordance with the Financial Agency Agreement, a list of these ATM locations.

May a financial institution deny ETA holders from accessing funds through foreign ATMs?

No. However, a financial institution may assess fees for ETA transactions at foreign ATMs. The fees must be consistent with fees charged to other account holders.

If a financial institution does not own ATMs or give its other holders ATM cards, does this financial institution have to give ETA holders an ATM card, or may the financial institution limit ETA access to over-the-counter transactions?

Yes. Under this condition, a financial institution may limit ETA access to over-the-counter transactions.

Is allowing balance inquiries via an automated response unit accessed by telephone acceptable?

Yes. Access to balance inquiries via telephone response unit is acceptable. Telephone calls to the automated response unit to make balance inquiries also count toward the four free proprietary balance inquiries provided, per month, by the financial institution in accordance with the Financial Agency Agreement.

Point-of-Sale Access

How should financial institutions distinguish between on-line and off-line POS?

Financial institutions should use the following guidelines for distinguishing between on-line and off-line POS:

On-line POS

• On-line POS is a real-time system that: 1) verifies that the reported balance in an individual's account is sufficient to satisfy the amount of the transaction at the time the transaction occurs, and 2) posts the transaction against the available balance immediately. Note, however, that if the card issuer uses batch processing, the balance is only updated periodically, and thus the reported balance may not represent the actual funds available at the time a transaction is authorized.
• On-line POS cards access cash with the use of a PIN (Personal Identification Number) only. No other personal verification is necessary.

Off-line POS

• In an off-line POS transaction, the transaction is not authorized against an available balance and the amount of the transaction is not posted against the account until a subsequent settlement cycle.
• With off-line POS, there is a greater likelihood that overdrafts will occur.
• Off-line POS cards, such as the Visa Check Card, require the holder's signature for use, and are not permitted with the ETA.

Is an account that provides on-line POS access a transaction account for purposes of Federal Reserve reserve requirements?

Yes. If the ETA includes on-line POS access, it will be classified as a transaction account for purposes of the Federal Reserve's reserve requirements. If the ETA does not include POS access (because the institution is not a member of an on-line POS network), then the ETA will be classified as a savings account for purposes of the Federal Reserve's reserve requirements.

If participating financial institutions offer on-line POS access to existing holders, are they required to provide the same access to ETA holders?

Yes. Treasury requires participating financial institutions to provide unlimited access to their on-line POS networks. Financial institutions are not allowed to impose any fees with respect to POS access; however, as with other commercial transactions, individual merchants might impose fees for on-line POS access, which would be the responsibility of the account holder. Financial institutions that provide POS access are permitted to terminate an ETA holder's POS access if such access is misused, for example, by repeated overdrafts.

May a financial institution issue a check card or off-line debit card to ETA holders?

No. The ETA may not include the off-line capability found in check cards and off-line debit cards. However, a financial institution is required to offer on-line POS access if it is offered to other account holders at the same institution.

If a financial institution charges all of its holders a fee for POS, may the financial institution charge ETA holders that same fee?

No. Financial institutions are not allowed to charge ETA holders for on-line POS access.

If a financial institution conducts credit checks for all account holders before giving them access to the POS network, may the financial institution follow the same process with ETA holders, or are they automatically given access?

No. A financial institution may not base access to POS on a credit check on ETA holders. Financial institutions are required to provide unlimited on-line POS access to ETA holders if the financial institution provides on-line POS access to its other account holders. However, financial institutions are permitted to terminate POS capability because of misuse, may set off overdrawn amounts, and may charge an overdraft fee not to exceed $10.00 per 24-hour period. Financial institutions may also close the account for misuse in accordance with its customary closing procedures.

Account Opening and Closing

Are participating financial institutions required to open an ETA for any Federal payment recipient who is eligible to open an ETA?

Yes. With limited exceptions, a participating financial institution must provide an ETA to any Federal benefit, wage, salary, or retirement payment recipient who requests an account, and who authorizes the deposit of eligible payments to the ETA. Exceptions are as follows: (a) a financial institution shall not open an ETA for any individual if the institution does not have authority under its charter to maintain a deposit or share account for the individual, and (b) a financial institution is not required to open an account for any individual if: (i) the institution is aware that the individual previously was the owner of an ETA that was closed because of fraud at that institution or any other financial institution, or (ii) the institution, for reasons of account misuse, previously closed an ETA held by the individual at that institution.

What must a financial institution do to ensure that an individual for whom an ETA is opened has authorized the deposit of a Federal benefit, salary, wage, or retirement payment to the account?

At the time a financial institution opens an ETA for an individual, the individual must simultaneously authorize the direct deposit of his or her Federal benefit, salary, wage, or retirement payment to the account. Therefore, at the time the ETA is opened, the individual must (1) enroll in direct deposit through an automated enrollment at the financial institution, (2) enroll in direct deposit via telephone with the paying agency, or (3) execute a direct deposit enrollment form. It is the financial institution's responsibility to ensure that direct deposit enrollment occurs as part of the account-opening process.

Is the financial institution allowed to apply its customary account opening procedures for the ETA?

Yes. Financial institutions are allowed to apply their customary account-opening procedures for identity and address verification for the ETA as long as those procedures do not violate any of the provisions of the Financial Agency Agreement, such as whom is classified as an "eligible individual" to open the ETA.

Is it required that a financial institution allow individuals to open an ETA by telephone, electronic means, mail, or in person?

According to the Federal Register, each financial institution may establish its own account-opening procedures for the ETA. For example, some institutions may choose to open ETAs through a mail or telephone application process, whereas others may choose to require recipients to apply in person.

May a financial institution disallow the opening of joint accounts?

Yes. According to the Financial Agency Agreement, the offering of joint ETAs is at the discretion of the financial institution.

May a jointly held ETA account receive two separate eligible payments?

Yes. There is no prohibition on an ETA receiving more than one electronic Federal deposit; however, offering a joint account is at the discretion of the financial institution.

On what grounds may a financial institution close an ETA?

A financial institution will be permitted to close an ETA where the financial institution has cause to believe that fraud has occurred in connection with the account or that the account has been misused. Any determination that fraud or misuse has occurred must be consistent with the financial institution's usual criteria for closing accounts. Those criteria could include, for example: where the institution determines that fraud has occurred after conducting the investigation required under Regulation E; excessive overdrafts; negligence in safeguarding an ATM and/or POS card or PIN; or failure to pay an overdraft within a reasonable period of time.

A financial institution may not close an ETA for any reason other than fraud or misuse unless it is requested by the holder of the ETA to do so; the ETA ceases to be used for the receipt of eligible payments; or the Financial Agency Agreement is terminated in accordance with its terms.

May a financial institution close an ETA immediately upon the discovery of misuse or fraud?

Yes. A grace period is not required for the closing of an ETA.

Will Treasury maintain a listing of individuals who have had an ETA closed for fraud?

No. Treasury does not intend to maintain any information on individuals who have had an ETA closed for fraud.

Can a financial institution rely on ChexSystems to determine whether to open an ETA for an individual?

A financial institution may only rely on reason code "M," Abuse of Government Electronic Transfer Account, in ChexSystems to determine whether to deny the opening of an ETA for an individual. Reason code "M" indicates that an individual has had an ETA closed for fraud. As specified in the Notice, a financial institution may deny an individual an ETA if the individual had previously owned an ETA closed for fraud at that institution, or another institution, or if the individual had previously owned an ETA closed for misuse at that institution. ChexSystems may also be used by the financial institution to verify the individual's personal information, such as his or her address.

If a financial institution were to close an ETA, could the institution report this information to the ChexSystem?

A financial institution may report closure of an ETA to ChexSystems; however, financial institutions may not use closure of an ETA for misuse at another institution as a reason to deny the opening of an ETA for an individual.

If an ETA holder stops receiving Federal payments, must the account be closed?

No. The financial institution may choose to keep the account open even if an ETA holder stops receiving Federal payments.

If an ETA holder closes an account, what happens to the electronic Federal payments subsequently deposited?

The financial institution must return the payments to the agency or originator of the funds transfer, according to 31 CFR 210, Federal Government Participation in the Automated Clearing House.

If there has been no recent activity on an ETA and the ETA holder cannot be located, what are the financial institution's obligations with respect to the account?

Like other accounts at the financial institution, dormant ETAs are subject to applicable State escheat laws.

Is there a specific number of overdrafts that must be committed by an ETA holder before the financial institution is permitted to close the account?

When considering whether to close an ETA due to multiple overdrafts, a financial institution must apply the same standard to ETA holders as it would to other account holders at the financial institution. For example, if this institution allows regular account holders to overdraw on a certain number of occasions per month without penalty of closing, this standard must be applied to ETA holders.

Fees

Will the Federal Government reimburse financial institutions for any costs associated with opening the ETA?

Treasury will reimburse financial institutions a one-time fee of $12.60 per ETA reported opened to offset the costs of setting up the account. Set-up costs include costs to enroll holders, train staff, and issue cards.

Who pays the monthly fee, the ETA holder or Treasury?

The monthly fee is the responsibility of the ETA holder.

When does the monthly fee begin to accrue?

Once an ETA is opened, the monthly fee may be charged in accordance with the financial institution's standard billing procedure.

For what additional services may a financial institution charge fees?

A financial institution may charge an ETA holder a fixed monthly account fee not to exceed $3.00 which would include fees in connection with any required attribute of the ETA. However, a financial institution may charge an ETA holder other account-related fees that the financial institution usually and customarily charges to its other retail holders. Examples of such fees include: fees for additional withdrawals and balance inquiries; lost card fees; and account research fees. A financial institution may impose fees at its customary rates, except that the amount of any overdraft fee may not exceed $10 within a 24-hour period. All fees must be disclosed in accordance with the requirements set forth in paragraph 10(a) of the Financial Agency Agreement.

Can a financial institution charge extra for an ETA that pays interest?

Yes. A financial institution may charge a higher monthly fee for an interest-bearing ETA than it charges for a non-interest-bearing ETA, but in no case may it charge a monthly fee in excess of $3.00. Also, a financial institution may not require a minimum balance in connection with the payment of interest.

When may a financial institution charge fees for cash withdrawals and balance inquiries?

A financial institution may charge an ETA holder for the use of foreign ATMs. A financial institution may also charge an ETA holder for proprietary ATM use, but only after providing ETA holders a minimum of four cash withdrawals and four balance inquiries per month to be included in the monthly fee. If a financial institution typically charges a fee for over-the-counter cash withdrawals or balance inquiries, it may also charge its ETA customers the same fee, but must then provide four free cash withdrawals and four free balance inquiries via ATM. When a financial institution decides how it will provide the four free cash withdrawals, and four free balance inquiries to its ETA holders, the financial institution must disclose this information to the ETA holders.

Will Treasury adjust for inflation the monthly account fee, overdraft fee, and set-up fee?

Treasury will evaluate the appropriateness of these three fees from time to time, and will make adjustments periodically as warranted.

Does the $10.00 per overdraft fee apply to each individual transaction or is it based on a 24-hour period?

The $10.00 overdraft fee is limited to one every 24 hours regardless of the number of overdrafts during that 24-hour period. A financial institution cannot charge an ETA holder a recurring daily $10 fee only because the account remains overdrawn due to transaction(s) that occurred during a single 24-hour period.

If an ETA holder orders checks from an independent check supplier and overdrafts the account, may the bank charge its standard overdraft fees?

No. The Financial Agency Agreement limits an overdraft fee to $10 per 24-hour period regardless of the number of overdrafts within that period. The agreement does not speak to how the overdraft arises; therefore, the same fee structure is applicable in all cases in which an overdraft occurs. Because the ETA prohibits check writing on the account, the ETA provider may close the account in accordance with customary account closing procedures.

If an ETA holder has an ongoing overdrafted account balance, may the financial institution charge a daily fee until the account has a positive daily balance?

No. The financial institution may only charge $10.00 per 24-hour period regardless of number of overdrafts within that 24-hour period. If the balance remains overdrafted, the fee may only be incurred at the time the overdraft occurred. The financial institution, however, may exercise its right to setoff against the ETA for the amount of the overdraft.

May financial institutions charge less than the maximum $3.00 account maintenance fee per month?

Yes. Financial institutions may charge the ETA holder any amount between $0.00 and $3.00 per month to maintain the account.

May the financial institution assess a fee to the ETA holder if an ATM card is lost/stolen, in order to expedite the process of replacing the lost card or to provide a service to give the customer access to their funds?

Yes. The EFT holder may be assessed a fee for this service as long as it is consistent with the fees charged to other account holders. The existence of this fee must be disclosed by the financial institution at the time the account is opened.

May financial institutions charge more than the $3.00 account fee per month if they allow additional deposits and pay interest on the account?

No. Financial institutions may not charge ETA holders more than $3.00 per month for the required features. Financial institutions may charge an incremental fee for the payment of interest as long as the monthly fee does not exceed $3.00. A financial institution may not charge an incremental fee for allowing additional deposits.

If a financial institution charges its customers an initial fee for the issuance of an ATM card, can that charge be applied to ETA holders as well?

No. Financial institutions may not charge ETA customers for the issuance of an ATM card because the card itself is included as a feature of the ETA. The charge for all features of the ETA combined may not exceed $3.00 per month.

If a financial institution allows additional deposits to the ETA, and customarily charges a fee for all deposited checks that are returned for insufficient funds, may that financial institution charge the same fee to ETA holders?

Yes. The financial institution may charge the ETA holder other account-related fees that the institution usually and customarily charges to its other holders. The institution may impose such fees at its customary rates; however, all fees must be disclosed in accordance with the requirements set forth in the Financial Agency Agreement.

Regulatory

Do financial institutions earn Community Reinvestment Act (CRA) credit for participating in the ETA program?

The Federal Financial Institutions Examination Council recently supplemented and republished in the Federal Register its Interagency Questions and Answers Regarding Community Reinvestment. Question and Answer 3 addressing §§ ___.12(j) and 563e.12(i) has been amended to state that providing ETAs qualifies as a community development service. For further information on CRA credit, go to www.ffiec.gov/cra/pdf/qa01.pdf.

Will a financial institution lose CRA credit if it decides not to participate in the ETA program?

No. However, the Federal Financial Institutions Examination Council has stated that financial institutions providing ETAs may qualify for community development credit.

Does Regulation E apply to ETAs?

Yes. Regulation E is the Federal Reserve Board's regulation that establishes the basic rights, liabilities, and responsibilities of consumers who use EFT services and of financial institutions that offer these services.

Does Regulation DD (Truth in Savings) apply to ETAs?

Yes. Regulation DD is the Federal Reserve Board's regulation implementing the Truth in Savings Act of 1991. Regulation DD is designed to enable consumers to make informed decisions about accounts at depository institutions by requiring depository institutions to provide disclosures regarding the rates of interest payable on deposit accounts, minimum balance requirements, and the fees that are assessable against deposit accounts.

Other Questions

When using an ATM for a cash withdrawal, should the ETA customer choose withdrawal from savings, withdrawal from checking, or some other designation on the ATM screen?

The ETA provider determines which option its ETA customers should choose. The financial institution must, at the time an ETA is opened, disclose to the customer which option the customer should choose when withdrawing cash from an ATM.

Federal credit unions, by statute, require members to open a share account and maintain a balance in order to join. Are credit unions allowed to require that such an account be opened along with an ETA?

Yes. As a condition to opening an ETA, Federal credit unions may require that a recipient open and maintain a share account with a minimum balance, if such a requirement is imposed under Federal or State law. However, credit unions may not charge for opening or maintaining the share account.

May a financial institution brand or co-brand an ETA?

The account must be identified as an ETA, but co-branding is allowed. For example, "First National ETA" would be acceptable.

Can a financial institution have an account agreement with the ETA holder that is similar to its standard deposit account agreement?

Yes, as long as the agreement is in accordance with the required ETA features and fee restrictions and must include the disclosures required for ETAs.

What are a financial institution's responsibilities when an attachment order is received?

Financial institutions must send a copy of the order and the name of the creditor and contact person, if any, to the recipient, preferably within two to three days, but no later than seven days. In order to ensure that recipients understand that Federal benefit payments deposited to an ETA generally are protected from attachment, Treasury requires, as a term of the Financial Agency Agreement, that institutions opening ETAs provide disclosure information to recipients on the types of funds that are not attachable.

What account adjustment rules apply if a Federal agency makes an overpayment?

The rules of the Federal agency whose funds were paid in error apply in case of an overpayment.

Are financial institutions able to exercise their right of setoff against an ETA to pay for obligations of the account holder?

Yes. Treasury permits financial institutions to exercise a right of setoff against an ETA for certain obligations of the account holder that are directly related to the maintenance of the account. These obligations are limited to:

• the monthly fee;
• any other fees incurred by the recipient in connection with the maintenance of the ETA;
• any amount mistakenly credited to an ETA for which the recipient has no legal right;
• the amount of any overdraft on an ETA; and
• any amount for which the recipient is liable under Regulation E.

Treasury will not permit financial institutions to set off against ETA obligations incurred by the account holder in connection with other accounts, products, or services offered by the institution.

May a financial institution require that an account holder provide seven days' notice prior to withdrawing funds from his or her ETA?

Yes. Under Federal regulations, a financial institution must reserve the right to require that an account holder provide at least seven days' written notice prior to withdrawing funds from a transaction account on which interest is paid. The Financial Agency Agreement states that if a financial institution pays interest on an ETA the financial institution must notify the ETA holder that it will require the seven-day notice from the account holder, only if the institution requires such notice for all the interest-bearing transaction accounts it offers.

Can financial institutions offer low-cost accounts that differ from the ETA and call these accounts ETAs?

No. The use of "ETA" is limited to accounts offered by designated ETA providers in accordance with the terms of an ETA Financial Agency Agreement. Only accounts that have the required features and are offered at or under a fee of $3.00 monthly may be called "ETA." Treasury encourages financial institutions to offer other low-priced accounts with additional features, but these accounts may not be called "ETAs." The ETA service mark ensures standardization and avoids confusion with other accounts.

How should a financial institution submit monthly information reports to Treasury?

By the 15th of each month, a financial institution should report the number of ETAs opened and closed during the previous month, and the number of active ETAs at the institution at the end of the previous month. A form to report this and other required information is included in the implementation kit sent to the financial institution after the Financial Agency Agreement has been signed.

Where can a financial institution find the statistics on payment volume by ZIP Code?

Statistics, by county, on Social Security and Supplemental Security Income check and Direct Deposit payments can be found at the Internet Web site, http://www.ssa.gov/deposit/factsandfigs.htm (Direct Deposit of Benefits).

Is the offering of the ETA limited to a financial institution's branch locations?

The ETA must be made available only at the financial institution's branches. In the Financial Agency Agreement (see FAA, Obligations of Institution, Section 1), the reference to "branch locations" is intended to mean retail offices where consumer deposit accounts are offered to the public. The financial institution is not required to offer the ETA at loan offices or other locations where retail checking accounts are not offered.