Newly Proposed Rules by U.S. Treasury Department to Add Millions of Users to Prepaid Card Program
According to a new article from Digital Transaction, the United States Treasury Department is looking to propose new rules that could potentially add million of users to a new government sponsored prepaid card program. The newly proposed rule to utilized prepaid debit cards is the government’s effort to cut cost associated with mailing out paper checks to Social Security beneficiaries and other government programs. Paper checks would be eliminated, completely, from all federal government benefits. The prepaid cards would be a MasterCard branded card provided by Comerica Bank located in Dallas, Texas.
Currently the government is accepting comments regarding the proposal. The comment period comes to an end next Monday, August 16, 2010. There are already several consumer groups that are objecting to the proposal such as Consumers Union which put out a press release earlier this week objecting to the proposal because they want the government to retail all checks for government benefits. Consumers Union also do not agree with the fee structure of the Direct Express Card from Comerica’s prepaid program.
Digital Transaction tried to get a response from Comerica Bank regarding the inquiry but they were unsuccessful. When all of the comments are gathered by the Treasury Department, they will not be looked at until next week.
Back in April of this year, the Treasury Department announced that they will completely stop sending paper checks for government benefit payouts on Supplemental Security Income, Social Security, veterans pay and more. Instead of mailing out checks, recipients will have to receive payments via ACH direct deposit into a checking or savings account or onto the Direct Express prepaid card. The government is predicting that they will be able to save more than $300 million over five years after the program is implemented. Schedule data for the plan to be in place is March 1, 2011 for new beneficiaries and for existing beneficiaries the date would be March 1, 2013
There are already million of beneficiaries who have completely given up on receiving paper checks and have opted for other prepaid card programs and direct deposit.
Source: Digital Transaction
