10 Million More US Consumers With Checking Accounts?
In the 1996 Check Study produced late last year by The Green Sheet, we noted that the U.S. government will no longer be in the check writing business beginning in January 1999.
We further noted that the two largest segments of check recipients, which are Social Security and Welfare recipients, are also the two largest groups which are among the 16 percent of the U.S. population who do not have checking accounts.
Based on the historical debate in both banking circles and congress about providing "life line" banking services at federally chartered banks, we predicted that such a mandate would occur before 1999, and that we would see as many as 10 million new banking customers entering the retail marketplace over the next three years.
Well, some of the discussion is already beginning to take shape, and this direction seems to confirm the direction of our Check Study results and findings. As an example, John Hawke, Treasury Undersecretary for Domestic Finance, speaking at a Brookings Institution banking conference, was asked how poor people without banking accounts would receive their social security or welfare benefits after January 1, 1999, when the government will begin making all its payments electronically.
Hawke said, "Banks should develop a low-cost bank account so an estimated 10 million people can get access to federal welfare and other benefits when the government eliminates paper checks in 1999."
In addition, Virginia McGuire, spokeswoman for the American Bankers Association said the trade group is working with the Treasury Department on the concept of a low-fee account for people that do not have a banking relationship.
You may receive a copy of the 1996 Check Study by contacting The Green Sheet at 1-800-757-4441 or e-mail at greensheet@greensheet.com. A video tape of the presentation of the 1996 Check Study presented at the San Francisco Federal Reserve is also available.
