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ETA

 

The Debt Collection Improvement Act (DCIA) of 1996 required most federal payments to be made by electronic funds transfer (EFT), with the exception of tax refunds, beginning January 2, 1999. On September 25, 1998, the Department of the Treasury and its Financial Management Service issued final rule 31 CFR Part 208, which implements the EFT requirements of the DCIA. The final rule also includes the circumstances under which waivers are available to individuals.

The Electronic Transaction Account (ETA) is an account designed by Treasury under the mandate of the DCIA. The DCIA requires Treasury to ensure that any individual required to have an account at a financial institution in order to receive federal payments electronically has access to an account at a reasonable cost and with the same consumer protections provided to other account holders at the same financial institution.

On November 23, 1998, Treasury published for comment a notice proposing ETA account features that financial institutions that choose to offer an ETA would be required to include in the account. The 45-day public comment period closed on January 7, 1999. Treasury will incorporate the final ETA account features into the ETA Financial Agency Agreement. Each participating financial institution that offers the ETA will be required to offer the account under the terms and conditions of the agreement.

 

Proposed ETA Account Attributes

 

As proposed, the ETA would:

• accept only electronic federal salary, wage, benefit and retirement payments;
• be subject to a maximum price of $3.00 per month;
• have a minimum of four cash withdrawals per month, to be included in the monthly fee, through any combination of proprietary Automated Teller Machine transactions 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 the financial institution's point-of-sale (P0S) network, if available;
• require no minimum balance, except as required by federal or State law; and
• provide a monthly statement.

Treasury is also seeking comment on three additional account features that are not part of the basic ETA account, to determine whether they should be added to the ETA at the option of the financial institution and at additional cost, if any, to the account holder. The additional features are:

1. payment of interest on balances,
2. allowing electronic deposits to the ETA of other types of payments in addition to federal benefit, salary, wage, and retirement payments, and
3. providing pre-authorized Auto-mated Clearing House (ACH) debit capability.
4.  

Treasury will publish final ETA account features in the Federal Register and allow any federally-insured financial institution that chooses to offer ETAs to act as Treasury's financial agent to provide the ETA in accordance with these standards and subject to terms set forth in the ETA Financial Agency Agreement between Treasury and the financial institution.

Treasury proposes to compensate financial institutions approximately $12.60 per ETA as a one-time account set-up fee. Treasury is considering compensating participating financial institutions for each ETA opened above designated minimum thresholds. In addition, if the three optional features are permitted, Treasury may choose to reimburse financial institutions an additional set fee per ETA providing for such features.

For more information, please contact Sally Phillips, Senior Financial Program Specialist, at (202) 874-7106; Matthew Friend, Financial Program Specialist, at (202) 874-6754; or Cynthia L. Johnson, Director, Cash Management Policy and Planning Division, at (202) 874-6590; or visit the FMS Web site at www.fms. treas.gov/eft/eta/.

 

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