THE WHITE HOUSE
Office of the Vice President
VICE PRESIDENT GORE, TREASURY SECRETARY RUBIN ANNOUNCE LOW-COST ELECTRONIC ACCOUNT Also Announce the First Financial Institutions Committed to Offering New Account
New York, NY -- Vice President Al Gore and Treasury Secretary Robert E. Rubin announced today the final details of the Treasury Department's Electronic Transfer Account (ETA), a new low-cost account that will allow more Americans to benefit from today's growing economy and take advantage of the latest in financial technology.
Treasury designed the ETA to allow federal payment recipients -- such as Veterans and Social Security recipients -- to take advantage of Direct Deposit. For no more than $3 a month, federal payment recipients will be able to signup for an ETA at a participating financial institution of their choice, giving them the option to continue to receive a paper check or to have those funds directly deposited into their accounts.
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.
"We need to ensure that the prosperity and opportunities of today are available not just to the few, but to all," Vice President Gore said. "These low cost accounts will open the door for millions of Americans to receive payments in a safe, simple, and secure way."
The Vice President also announced the first institutions to reach a preliminary agreement to offer the ETA. These are: Banco Popular de Puerto Rico & N.A., Bank of America, Britton & Koontz First National Bank, The Chase Manhattan Bank, Washington State Bank and Wells Fargo and Company. The ETA will be available at some of these 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 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.