Electronic Transfer Accounts Bring Banking to the ''Unbanked''

Electronic transfer accounts (ETAs) are growing in popularity among "unbanked" consumers who receive federal benefits checks, according to the U.S. Treasury. More than 30,000 people have opened ETAs since the program started a few years ago.

Six of the nation's largest banks have joined the list of financial institutions participating in the Treasury's ETA program: Bank One, Bank of America, FleetBoston, J.P. Morgan Chase, U.S. Bank and Wells Fargo.

Benefits to Consumers

ETAs provide an inexpensive way for federal benefit, wage, salary or retirement recipients who do not have a bank account to open an account and receive their money electronically rather than by check. ETAs require no minimum balance (unless required by law), allow for cash withdrawals and point-of-sale access (if available) and provide account holders with monthly statements. Additionally, consumers can be charged no more than $3 a month for the ETA service.

Federal benefit recipients interested in ETAs can call 1-888-382-3311 to obtain the names and addresses of ETA provider locations in their ZIP code area or visit www.eta-find.gov on the Internet.

Benefits to Financial Institutions

To help defray the cost of setting up ETAs, the Treasury Department pays financial institutions a one-time fee of $12.60 for each new ETA opened. The institutions also may receive Community Reinvestment Act credit under the service test for participating.

Additionally, financial institutions may tailor ETAs to their community's unique needs as long as the basic attributes remain. For example, a financial institution can decide whether to limit deposits to electronic federal payments or to allow additional types of nonfederal paper or electronic deposits.

Where to Get Information

A brochure explaining electronic transfer accounts to consumers in easy-to-understand language is available from the Federal Reserve Bank of Dallas. Community-based organizations can order the brochure, published in English and Spanish, for distribution to residents who do not have bank accounts and who receive government benefits checks. To order, contact Betsy Heilman at betsy.heilman@dal.frb.org.

The Treasury also provides free in-bank promotional materials for consumers and is conducting a nationwide advertising campaign about the ETA's benefits. Financial institutions can call 1-888-382-3725 for information on the program or to request an ETA enrollment kit.