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New Debit Cards for Unbanked Social Security and SSI Beneficiaries

MPLP Summer 2008 Public Benefits Section Newsletter Article


                Issue 36, Summer 2008

New Debit Cards for Unbanked Social Security and SSI Beneficiaries

(NOSSCR January, 2008)

 

The U.S. Department of Treasury’s Financial Management Service has announced a new initiative for unbanked Title II and SSI beneficiaries.  The “Direct Express” card, to be introduced in the spring of this year, will be an option providing beneficiaries with a prepaid debit card for receiving their monthly benefits.  The care, issued through Comerica Bank, will be phased into national distribution by the end of the summer.

 

Each month, benefit payments will be automatically deposited on the Direct Express card account.  Cardholders will be able to access their benefits at ATMs and other financial institutions.  They will be able to sue the card to get cash back and to make purchases at retail locations, pay bill and make online purchases.

 

There will be no cost for maintaining this account.  A cardholder will get one free ATM cash withdrawal per month and each additional withdrawal will cost 90 cents.  There will be designated ATMs at various locations that will not charge a fee.

 

The government expects to save a significant amount by use of electronic deposits.  Each paper check issued costs 89 cents, versus 9 cents per electronic payment.  Four million beneficiaries do not have bank accounts.  If each signed up for a card, $44 million per year would be saved.


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