The Eighth District recently partnered with five local utility companies to launch an extensive Direct Payment educational campaign, which encouraged consumers to pay their utility bills electronically. During April and May, bus signs, billboards, mall signs, radio interviews and newspaper articles containing a sign-up form blanketed the St. Louis area.
Local financial institutions also supported these efforts by displaying Direct Payment fliers in their lobbies. In addition to drawing awareness to Direct Payment, local advertising directed consumers to www.UseDirectPayment.com. The web site, administered by the Federal Reserve Bank of Chicago, enables consumers to sign up for Direct Payment online. Results are still being calculated, but almost half of the new sign-ups generated by the campaign have been received through this site.
Financial institutions that would like a supply of Direct Payment fliers may contact Margie Saulka at (314) 444-8684.
Federal Reserve Vice Chairman Roger W. Ferguson Jr. has announced that federal banking authorities are working with industry groups on legislation to reduce the costs associated with shipping canceled checks around the country.
The proposed "Check Truncation Act" would give banks greater leeway in substituting electronic checks for actual paper checks. It also would boost the use of electronic payment methods by "empowering banks to truncate checks when cost savings or other benefits can be identified."
This proposal is still being drafted and has not yet been submitted to Congress. If passed, a new federal requirement would mandate that banks treat the electronic checks as the equivalent of the original paper checks. For consumers, this provision could mean that when they write checks to firms that are located far away from their local banks, they may receive an electronic copy of their check—rather than the original paper version—in their monthly bank statements.
Ferguson said the proposed legislation will not be submitted to Congress until regulators have considered public comments. This will ensure that concerns of both bankers and consumers have been taken into account.