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The U.S. Department of the Treasury's Financial Management Service (FMS) today introduced a prepaid debit card for Social Security payments and other federal benefits in 10 states. A nationwide rollout of the Direct Express card is slated for this summer.
"People without bank accounts now have a user-friendly, practical alternative to paper checks for their monthly federal benefit payments," said FMS Commissioner Judith Tillman. "We know that many check recipients are eager for a card-based option for their federal benefits, and we are confident the Direct Express card will provide many Americans an important entry point to the financial mainstream."
About 4 million Social Security and SSI recipients don't have bank accounts, the government agency said.
Unlike other prepaid debit cards, the Direct Express card offers free access to their money, with no sign-up fee, and no bank account or credit check required to enroll. Cardholders can make purchases, pay bills, and get cash at thousands of ATMs and retail locations.
The Treasury Department said it has engaged Dallas-based Comerica Bank to issue the card exclusively for payment of federal benefits.
People currently receiving Social Security or Supplemental Security Income (SSI) checks in Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, North Carolina, Oklahoma, South Carolina and Texas have already received information about the card.
Accompanying the launch is a public education campaign promoting card literacy among likely users. The campaign will consist of print and Web materials, public service announcements, direct mail, and partner organizations.