Banks that sign contracts with the government to provide electronic accounts to federal benefits recipients will have to offer four free monthly withdrawals, a top Treasury Department official said Monday.
Speaking alongside Senate Banking Committee Chairman Alfonse M. D'Amato at a news conference, Treasury Under Secretary John D. Hawke Jr. also said recipients will be given the option of withdrawing their Social Security and other payments at a bank teller's window or automated teller machine.
Mr. Hawke added that financial institutions will be permitted to charge a small monthly fee.
The accounts are being designed to comply with a 1996 law requiring that by Jan. 1, 1999, all federal payments except tax refunds be made electronically.
But the mandate, which was expected to save the government $500 million in five years, has since been scaled back because of complaints that the 10 million recipients without bank relationships would be forced into accounts with exorbitant fees.
Under pressure from Sen. D'Amato and other congressional critics, the Treasury Department in June announced revisions that would turn the mandate into a voluntary program-a move applauded by members of the Brooklynwide Interagency Council of the Aging Inc. and other consumer activists at the news conference.
"Anyone that wants to get a paper check will continue to do so," Mr. Hawke said.
Sen. D'Amato said his primary concern has been to protect consumers from "incredibly high (bank) fees to get their own money."
The original proposal "was a disaster, particularly for the millions of senior citizens who do not have bank accounts," the New York Republican said.
The Treasury Department is expected to issue final regulations and account details soon.
