The U.S. Treasury Department is joining community-based organizations to spread the word about a new electronic payment tool — the Electronic Transfer Account (ETA). An expanding list of financial institutions nationwide is now offering the ETA, which is specifically designed for Federal payment recipients who do not have an account. With an ETA, anyone who receives a Federal benefit, wage, salary or retirement payment can take advantage of an opportunity to open an account regardless of past credit history.

The ETA is a low-cost alternative to receiving paper checks. It is now available at more than 500 federally insured banks, savings and loans, and credit unions with nearly 5,000 locations in 49 states, the District of Columbia and three U.S. territories.

"This is good news for Federal payment recipients across the country who want to take advantage of the many benefits of using electronic funds transfer, or Direct Deposit, but who don’t have an account with a financial institution," says Donald Hammond, Fiscal Assistant Secretary of the U.S. Treasury Department.

"The ETA directly addresses those economic concerns voiced from cash consumers and community-based organizations that many people on fixed incomes are unable to pay the high cost of an account."

Among the community-based organizations working to reach recipients about the ETA is New Jersey Citizen Action. "We have a strong commitment to financial education," says Cathy Malmstrom, Director of Community Reinvestment Projects for NJ Citizen Action. "We consider bringing consumers into the financial and technological mainstream as central to our commitment to social and economic justice. ETAs offer an opportunity to develop a relationship with a financial institution and build a credit history."

The ETA offers a safe, secure, and convenient way for Federal payment recipients to have access to their funds automatically through electronic funds transfer. The account costs $3 or less per month, and allows at least four free cash withdrawals and four balance inquiries per month from a teller, ATM, or both. If you use ATMs at certain locations, it may cost extra. The ETA also provides a monthly statement and imposes no minimum balance, except as required by law. The ETA is voluntary for financial institutions to offer and for Federal recipients to enroll. Cash consumers can choose to continue receiving their checks by mail if receiving their payment electronically is a problem.