The Treasury Department is mulling whether to design a standard electronic account that any bank could offer to federal benefits recipients who are noncustomers, an agency official said Tuesday.

Or the agency may bid the work out to big players and let local banks subcontract, said Donald V. Hammond, acting fiscal assistant secretary.

After dragging its feet for months, the Treasury Department is considering these pro-bank changes to its plan for electronic payment of government benefits in order to spark more interest among financial institutions in these accounts.

The Treasury had planned to bid out contracts to banking organizations or consortia on a regional basis, but small banks complained that method would bar them from competing for the business.

"We got concerned that the notion of the large-scale regional competitive selection may not get us the kind of local penetration that we are looking for," Mr. Hammond said.

The Treasury is running out of time. Under a 1996 law, the government must begin delivering all payments except tax refunds electronically by Jan. 1, 1999.

The Treasury proposed last September a regulation to implement the law that gives the agency an extra year to roll out government-sponsored accounts for benefits recipients without bank accounts.

The main hang-up still remains designing a government-sponsored electronic account that these noncustomers can afford and banks consider profitable enough to offer, Mr. Hammond said.

"It has obviously taken a lot more time than we had anticipated," Mr. Hammond said. He described as "incredibly complex" the process of developing accounts for the estimated 10 million recipients of Social Security and other benefit checks who lack bank accounts.

As an added incentive for banks, the Treasury may drop the requirement that the accounts be all-electronic. For example, a community bank could offer a set amount of withdrawals per month at a teller window or automated teller machine.

Bankers like these proposals but still need to know the number and types of free monthly transactions that will be permitted, said Marcia Z. Sullivan, government relations director of the Consumer Bankers Association.

"It depends on the parameters," Ms. Sullivan said. "If they are attractive, then you will find a lot of institutions willing to offer this product. If they are not, then it is going to be difficult to find enough banks to participate."

The agency expects to issue a final regulation in July that would let the government start electronic payments to vendors and benefit recipients with bank accounts by the deadline, Mr. Hammond said. The Treasury expects to propose this spring the design of the government-sponsored accounts and decide whether to scrap the bidding process by fall, he said.

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