Washington, D.C.--A new resource is now available to individuals and organizations that work with federal and state benefit recipients.  Under a new federal law, most recipients of federal payments, such as Social Security, veterans or disabled benefits and pensions, will receive their benefits electronically instead of through paper checks.  The U.S. Department of the Treasury recently announced key provisions of regulations implementing this change.  By summer's end, Treasury has promised to issue final rules on waivers from the electronic deposit requirement as well as final rules on special "electronic transfer accounts" (ETA) for people who have problems affording or using bank accounts.  In addition, more and more states are in the process of attempting to switch food stamp and many other state benefits away from paper to electronic payments.

"Today's environment is confusing enough as it is," says Linda Sherry of Consumer Action.  "Many people need to understand how important changes will affect the way they receive benefits.  Recipients also need to be alert to deceptive ads that try to pressure them into signing up for costly payment access services.  You will not lose your benefits if you fail to sign up for direct deposit!"            

As part of the EFT initiative, the Treasury Department has been working to develop a low-cost account that will allow recipients to use direct deposit of benefits even if they don't have -- or can't get -- a traditional bank account.

"The reasons for not having a bank account are many," according to Peter Williams of the National Urban League.  "It could be a physical disability or limited language skills.  Some people might live in an area where a banking office is not in close proximity.  Still others might have past banking or credit problems that keep them from opening a bank account."

The EBT/EFT Update contains practical tips consumers can use when dealing with credit problems and bank accounts, finding low- or no-cost checking and savings accounts, and protecting themselves when using ATMs.

The tabloid newspaper also contains an in-depth interview with Barbara Leyser, an EBT consultant to the National Consumer Law Center.  Leyser identifies key points that consumers need to know regarding EBT, discusses progress in making sure that EBT cards will work from state-to-state, elaborates on what effect welfare reform is having on state EBT programs, and points out particular EBT problems arising at the state level.  In addition to this interview, Leyser and the National Consumer Law Center's Margot Saunders team up to create an informative, two-page EBT chart which identifies state-by-state EBT status, benefit programs, ATM fees, POS fees, and surcharges.

The bottom line?  According to Ken Lewis, president of NationsBank, "Consumers, consumer advocates, banks, and community organizations that work with benefit recipients all are trying to ensure that electronic transfer systems reach their full potential for recipients and taxpayers.  However, many questions about how these changes will impact consumers have yet to be answered.  By launching the EBT/EFT Update tabloid and the EBT/EFT Education Consortium, NationsBank is demonstrating its commitment to providing affordable, safe, and convenient access to financial services to consumers, including government benefit recipients."

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The organizations that make up the EBT/EFT Education Consortium are:

National Urban League, one of the nation's leading civil rights organizations, which helps African Americans attain social and economic equality by promoting economic self-reliance and equality under the law. Contact: Peter Williams (212) 558-5453

National Consumer Law Center, a 29-year-old non-profit agency providing services and information about consumer issues to legal services, private attorneys, state and federal consumer protection agencies, public policy makers and others. Contact: Margot Saunders (202) 986-6060

Consumer Action, a non-profit advocacy and education organization that has served consumers nationwide since 1971.  Consumer Action has a national reputation for producing, translating, and distributing consumer education materials. Contact: Linda Sherry (415) 777-9648