The Feds hate cash because it’s nearly impossible to track and control. Now they’re dangling the carrot of early tax refunds to get people to adopt their new card. Predictably, they’re going after the segment of the population that’s least savvy about personal finance—the savviest avoid being in the position of being owed money by the Treasury in the first place. The Treasury Dept. laughingly claims that this card gives users more control over their finances. The truth is that it will give the federal government and the banks that own it greater control over private accounts.
WASHINGTON – Timed for tax season, the U.S. Department of the Treasury launched a pilot today to offer taxpayers a safe, convenient and low-cost financial account for the electronic delivery of their federal tax refunds. The new account card option provides everyday money-saving conveniences and consumer protection features for Americans with limited or no access to traditional banking services.
“This pilot program will provide low- and moderate-income Americans with a low-cost option for faster delivery of their federal tax refund,” said Deputy Secretary of the Treasury Neal Wolin. “This innovative card can be used for everyday financial transactions, such as receiving wages by direct deposit, withdrawing cash, making purchases, paying bills and building savings safely and conveniently, giving users more control over their financial futures.”
As the next step in this pilot, originally announced in September, Treasury will mail letters next week to 600,000 low- and moderate-income individuals nationwide. The letters will invite these taxpayers to consider activating a MyAccountCard Visa® Prepaid Debit Card in time to have their 2010 federal tax refund direct deposited to the card. Compared to paper checks, direct deposit provides a safer, faster and more convenient way to receive a federal tax refund as well as other regular income.
Also this week, Treasury began a companion pilot to encourage tens of thousands of current and potential payroll card users to direct deposit their 2010 federal tax refund onto existing payroll cards. Nationwide, more than 1.7 million workers use payroll cards to receive and access their wages, often because they do not have bank accounts. Working with ADP, a provider of payroll services, Treasury will highlight the safety, ease and convenience of direct deposit onto payroll cards through tax season communications, including materials distributed with pay statements.
Read more at the U.S. Dept. of the Treasury.