Social Security Agency Pushing Electronic Distribution in N.Y.

The Social Security Administration is appealing to New York metropolitan area banks to help it jump-start its Direct Deposit marketing program.

Social Security recipients in New York have not been taking to the program as quickly as those in other regions, sources said, and the service was not a high marketing priority during the previous regional commissioner's administration.

After Peter DiSturco's retirement last year, however, administration officials appointed Beatrice M. Disman, a 30-year veteran of the agency, to the New York post. She has made electronic distribution of retirement and welfare benefits her top priority.

Ms. Disman's region comprises New York, New Jersey, Puerto Rico, and the Virgin Islands.

She and others from the agency plan to contact many of the region's banks in coming weeks to get them involved in the Direct Deposit campaign, which is also supported by the National Automated Clearing House Association.

Sources said the New York region, one of 10 under the agency's umbrella, significantly lags the others in electronic funds transfer.

Just more than half of the New York and New Jersey recipients now get payments electronically. Puerto Rico, which has about 500,000 recipients, has only a 20% participation rate.

By contrast, nearly four of five recipients in the Pacific Northwest and California regions get electronic funds transfers. The national average is 60%.

"We were not happy with where we were as a region with the percentage of our people receiving electronic transfers," said Dominick Fulgieri, director of special projects in Social Security's New York office.

Ms. Disman, who became regional commissioner last April, embarked on a program to get more banks to participate.

Social Security officials say Direct Deposit cuts costs associated with paper and reduces check losses and thefts.

Especially supportive of the New York effort has been Chemical Banking Corp., which last month launched its own promotional drive based on a national model created by Social Security and Nacha.

Although Chemical's effort is only weeks old, "we are very happy with" the bank's responsiveness, Mr. Fulgieri said. "Now we have some empirical evidence that this is a successful way of signing up thousands of people."

He said he hoped Chemical's example would spur more banks to "fall in line" by ratcheting up electronic programs of their own.

Electronic funds transfers cost the government about a penny apiece, he said, while the cost of printing and mailing a check is about 44 cents. The potential cost saving is $731,000 a month if the 1.7 million paper checks still mailed in New York State were converted to electronic transfers.

Meryl Kramer-Asher, a vice president in charge of distribution planning at Chemical Bank, said it was too soon to calculate what the bank's cost savings would be, but she wanted to focus on customer service issues anyway.

"We philosophically agreed with Social Security," she said.

"When you look at the national statistics that one in 376 checks (is) being stolen from a very vulnerable population, we really felt it was our responsibility to promote it," Ms. Kramer-Asher said.

Chemical launched a direct mail campaign last month after it had identified potential Social Security recipients. The bank filled out electronic payment applications as far as possible for potential customers and enclosed postage-paid envelopes.

It also sent a personal letter from Social Security's Ms. Disman that informed them about Direct Deposit and its benefits.

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