Photo courtesy Office of the Special Trustee for American Indians A cardholder displays the debit card that can be used to withdraw trust fund money, especially for those who don’t already have a bank account. Debit cards now a choice for trust beneficiaries By
Maria Scandale, Today correspondent
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“We want to get away from checks, but we think that if one has an account with a financial institution already, in most cases, direct deposit would serve them better. But now we have two options, direct deposit or debit card.” – Rien Heymering, Office of the Special Trustee trust reform specialist |
One occurrence really pushed the program to begin – a phone call that came to the desk of former Special Trustee Ross Swimmer. A check-cashing firm called him and said they had a check and wanted to know if it was good to cash. The check was for $18,000.
“He was sitting there thinking, ‘this person is going to spend X number of dollars, whatever amount they take as their portion to cash the check, and also, that person was going to be walking around with all that money in their pocket,’” Pafel said.
OST manages the trust funds that are collected as income from the lease or sale of lands or resources held in trust by the U.S. for individual American Indians and for tribes.
There are an estimated 200,000 Individual Indian Money accounts. Some are for minors, but about 95,000 of the accounts are “unrestricted accounts” for individuals, “who are entitled to the money whenever they want it,” outlined Rien Heymering, trust reform specialist in the OST’s Albuquerque, N.M. office. “Typically, the money is only here for a day, and it’s passed on to them.
“The overwhelming majority of these folks receive the money by check, and checks are not the fastest or safest or most convenient way to get money to people these days. They can be lost in the mail or even lifted by somebody, and you have to take it to the bank or take it someplace to cash.”
The federal government benefits in not having to send out checks. “It’s a pretty expensive way to get money to people; it costs us something over $2 to issue a check.”
The prepaid debit card program is operated by JPMorgan Chase & Co. for the U.S. Dept. of Treasury’s Financial Management Service.
Beneficiaries can enroll in the debit card program at OST field office locations through fiduciary trust officers, or through OST’s Trust Beneficiary Call Center at (888) 678-6836.
“With our debit card you don’t need to have an account with a financial institution to start; we will provide that for you. You don’t have to pay monthly checking account maintenance fees,” Heymering outlined.
Some fees do apply to use the cards, however.
The charge for a balance inquiry at an ATM is 45 cents. Chase offers one free ATM withdrawal in their network per deposit. After that, withdrawals cost $1.50 each.
Those fees have been lowered since the pilot program ended. Another improvement is utility bills now can be paid online using the card, Heymering said. That transaction carries a 75-cent fee.
Heymering said the debit cards “aren’t for everybody. We want to get away from checks, but we think that if one has an account with a financial institution already, in most cases, direct deposit would serve them better. But now we have two options, direct deposit or debit card.”
Over the past 10 years, acceptance of direct deposit was slower than OST had hoped. “We only had gotten 16,000 out of 95,000 to do so. We supposed that some of the resistance was because a portion of our population was either unbanked or underserved – it wasn’t convenient or even possible to have a financial account to receive a direct deposit,” Heymering said. “A debit card was a way for them to receive an electronic payment.”
As for the others who still would rather get their money by check, “those folks are used to how it works, and there’s a bit of inertia at work, I think,” surmised Heymering, who said the OST is “currently reviewing our strategy for getting the word out and going to be making an effort this year to enroll as many people as possible” in the debit card program.
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Rick said on Sunday, Jul 5 at 1:48 PM
Back in my high school, kids without debit cards are often being called "poor".
25442782Storm Cloud said on Wednesday, Jun 17 at 9:54 AM
For Pete's sake, the debit card use is the same scam used by states' disbursement of program money, like Unemployment payments. It costs the individual a fee for using the card and takes away your choice of bank for your money. It will be your money to do with as you please, and not be tied to any bank who profits from your card. It's a bad idea for the individual so I urge all to reject the debit card scam. Not that I'm a financial expert for sure, but I saw it in action in my state. Bad idea.
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