News Column

Federal Checks Going Electronic

Feb. 3, 2013

Rusty Garrett, Times Record, Fort Smith, Ark.

federal checks, electronic deposit, social security

Feb. 03--The U.S. Department of the Treasury is hoping the 5 million paper checks it mails to recipients of Social Security and other federal benefits eventually will be replaced by electronic transaction.

A month remains on a nationwide campaign to have check recipients sign up for direct deposit of their check into their checking account or into an account that can be accessed by a debit card.

Walt Henderson, who heads the Go Direct drive, said Thursday some 93 percent of recipients now rely on electronic transfer. The drive is focusing on the final 5 million.

"We're encouraging them to make the switch," Henderson said. He said Arkansas, which is home to some 60,000 Social Security and SSI clients, is ranked 25th from the top state in compliance, with 92 percent enrolled.

"It's just a bit below the national average," Henderson noted.

Henderson said the Treasury Department has partnered with banks and agencies nationwide to assist in the transition.

Saundra Lockhart, vice president of marketing with BancorpSouth in Fort Smith, said bank officials were asked more than a year ago to being the process of helping get people on the Go Direct program.

Anita Garrison at BancorpSouth has been helping educate some account holders on the program by way of talks at area senior centers and such. Those who choose to sign up for direct deposit can be converted "on the spot," she said.

"Many of them who meet at the senior centers or who live in nursing homes are already set up," she said.

Lockhart said there has been a steady increase in numbers of customers switching to direct deposit over the years, beginning in the mid-1980s.

"We've watched the migration from the third of the month check crowds, that would line up and fill the lobbies, to a point where we see very little activity of that type," Lockhart said.

Garrison said many of those still reluctant to make the change to direct deposit "want to have that paper check in their hands. Sometimes they are hesitant with the technology."

She said once the options are outlined to them, they more often gravitate toward direct deposit to their checking or savings account rather than the card, which they can use to make purchases or get cash.

"Direct deposit is so much easier," Garrison said.

Proponents of the program claim it is easier, safer and more convenient for beneficiaries. Rather than watch the mail for a check that must be taken to the bank, endorsed and deposited or cashed, those expecting a check will find the funds in their bank accounts or credited to their debit card on the due date.

The switch is more than just convenient. According to David Lebryk, commissioner of Finance Management Services for the Treasury Department, the practice is required by law. In 2010, Congress mandated the payment of federal benefits by direct deposit or electronic card by March 1, 2013. New program enrollees are required to choose one of the electronic payment methods.

The law applies to Social Security benefits, SSI payments and payments made by the Department of Veterans Affairs, the Railroad Retirement Board and the Office of Personnel Management.

Currently, the Internal Revenue Service continues to offer tax refund recipients the choice of paper checks or direct deposit.

The conversion is expected to save money. Treasury officials claim converting the remaining paper check recipients to electronic payments will save taxpayers $1 billion over the next decade.

Henderson said while earlier announcements indicated failure to act by the March 1 deadline would result in automatic transfer to a debit-card system, the Treasury Department has backed away from that alternative.

"We will continue to send them checks as we work to convince them to comply and offer additional assistance if needed," Henderson said.

He said holdouts are due to "a bit of procrastination, people waiting until the last minute to change."

Another factor is misconception about the program, something the Go Direct drive is trying to address.

"Some people don't understand how it works," he said. "They think they have to use a computer. That is not the case."

Another segment of holdouts includes recipients who do not have a checking account. The Direct Express debit card issued to them can be used for payment at any location that accepts credit cards. It also can be used to get cash at most ATM machines.

He said registration for direct deposit can be done over the telephone by calling the toll-free number, (800) 333-1795. After negotiating a number of recorded options and messages, callers are connected to an operator who will help them through the process.

Those who want to register online can do so at www.GoDirect.org.

Callers are advised to have on hand their Social Security number or claim number, their 12-digital federal benefit check number and the amount of their most recent federal benefit check. If choosing direct deposit, recipients also will need their financial institution's routing transit number, account number and account type (checking or savings).

Recipients can also contact the bank or credit union at which they have a checking account, or the agency from which their check is issued for help.

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(c)2013 Times Record (Fort Smith, Ark.)

Visit Times Record (Fort Smith, Ark.) at www.swtimes.com

Distributed by MCT Information Services

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