|Volume 2, Issue 1, 2002||Federal Reserve Bank of Dallas|
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U.S. Treasury's ETASM Brings Banking to the Unbanked
Six of the nation's largest banks have joined the growing list of financial institutions participating in the U.S. Treasury's Electronic Transfer Account program, an innovative service proving popular among both consumers and businesses.
Bank One, Bank of America, Fleet Boston Bank, J.P. Morgan Chase Bank, U.S. Bank and Wells Fargo Bank are the latest to offer ETAs to traditionally "unbanked" consumers receiving federal benefit checks. They bring the number of participating financial institutions to almost 600 offering the service at more than 17,000 locations nationwide.
The number of consumers taking advantage of the ETA's convenience has more than doubled in the past 10 months and is increasing daily. The ETA's growing popularity is easy to understand given the advantages to consumers as well as to banks, credit unions, and savings and loans.
Benefits to Consumers
ETAs provide federal benefit, wage, salary or retirement recipients who do not have a bank account an inexpensive way to open an account and receive their money electronically rather than by check.
Account holders benefit from the same consumer protections afforded other account holders at the same institutions, including the safety, convenience and security of having their federal payments electronically deposited.
ETAs require no minimum balance (unless required by law), allow for cash withdrawals and point-of-sale access (if available) and provide account holders with monthly statements. Additionally, consumers can be charged no more than $3 a month for the ETA service.
Federal benefit recipients interested in receiving more information on ETAs can call (888) 382-3311 toll-free to obtain the names and addresses of ETA provider locations in their ZIP code area. An Internet site, www.eta-find.gov , allows consumers to search for providers by ZIP code, city, state or financial institution name.
Benefits to Financial Institutions
Financial institutions receive a one-time setup fee of $12.60 for each new ETA opened. They also may receive credit under the Community Reinvestment Act (CRA) service test for participating.
Additionally, the ETA program allows financial institutions to increase a community's access to financial services and tailor ETAs to their communities' unique needs as long as the basic attributes remain.
A financial institution can decide whether to limit deposits to electronic federal payments or allow additional types of nonfederal paper or electronic deposits. They also can choose whether to offer either interest-bearing or non-interest-bearing accounts. The financial institution can close an ETA for misuse or fraud by the consumer.
To support financial institutions, the Treasury is providing free in-bank promotional materials for consumers and conducting a nationwide marketing campaign to make eligible check payment recipients aware of the ETA's benefits. Financial institutions can call (888) 382-3725 toll-free to get more information on the program or to request an ETA enrollment kit.
e-Perspectives, Volume 2, Issue 1, 2002