The Federal Reserve Board and the Treasury Department have launched a Web site that banks and individuals can use to set up direct deposit for government payments, such as Social Security checks.
The site is necessary because the Fed is eliminating that feature from its aging FedLine automated clearing house system.
As part of an ongoing upgrade of that system, which banks use to access the Fed’s payment system, the Fed will remove the direct deposit enrollment capability for government benefit payments on Sept. 30.
“FedLine wasn’t designed to handle this functionality,” said Kathy Paese, a vice president in the treasury relations office for the Federal Reserve Bank of St. Louis. “There are a lot of security requirements” for using FedLine. “Very few individuals can have access to it. It needs to be in a locked room.”
That makes it a poor fit for customer service functions, she said.
Susan Cobb, a member service representative for Ohio Catholic Federal Credit Union in Garfield Heights, said it used FedLine to enroll members for direct deposit for 20 years, and it has averaged two enrollments a month. Since switching to GoDirect on Feb. 1, it has enrolled 23 members, she said.
Members could not be present when the credit union enrolled them through FedLine, because of the rules restricting access, but GoDirect lets the credit union enroll members while they are in the branch, she said.
Greg Newton, a business analyst in the information technology systems department of the Federal Reserve Bank of Dallas, said GoDirect went live at certain banks in November, and 40,000 people have enrolled through it. Four hundred forty-six financial institutions are using it now, and 1,230 people have signed up online by themselves.
Another 300,000 people signed up through a phone number advertised by GoDirect.
