Another Clinton Backstep?
After all the fanfare about eliminating government payments by check, the Treasury has announced it will allow some benefits recipients to continue receiving paper checks, even after January 2, 1999.
Certainly, the law which requires all government payments to be made electronically will cut costs. But, it will also leave the 10 million "Un Banked" Americans who receive federal benefits out in the cold. These recipients are concerned that they will be forced to begin a banking relationship which will include paying fees to cash checks they currently cash for free.
This new proposal is a response to those concerns. The Treasury will grant waivers for those with a "financial hardship," a physical disability, or a "geographic hardship." (That's government-speak for, "There isn't a bank in my neighborhood.")
The Treasury is taking it a step further and will also grant waivers to those with banking relationships if they have been receiving benefits since before July 26, 1996 (when the law took effect), if they have a disability or geographic barrier.
But the catch is, the Treasury isn't going to run down every recipient and verify that they have such a hardship. The officials stressed recipients would "self-select" themselves for waivers. As John Hawke Jr., Treasury Undersecretary said, "We don't want to precipitate a broad-scale adverse reaction to [this] important program by being heavy-handed in the way it's applied."
As one retired minister who received benefits said, "I don't mean to sound like sour grapes, but I've had such bad experiences with banks over the years."
So, how effective will this law be? Let's break it down:
1. Those who received payments before July 1996 and have a banking relationship can get a waiver if they have a financial or geographic hardship.
2. Those who received payments before July 1996 and do not have a banking relationship can get a waiver if they have a financial or geographic hardship or physical disability.
3. There's no one verifying such hardships.
4. Consumers are distrustful of banks, as the quote above points out.
So, what's to stop everyone from getting a waiver?
