Comments on: Treasury Adopts IFR for Federal Benefit Recipients http://banktalk.org/2011/01/20/treasury-adopts-ifr-for-federal-benefit-recipients/ Exploring the Finances of the Unbanked Tue, 22 May 2012 19:08:56 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Payday_Tired http://banktalk.org/2011/01/20/treasury-adopts-ifr-for-federal-benefit-recipients/comment-page-1/#comment-6721 Payday_Tired Fri, 21 Jan 2011 22:09:14 +0000 http://banktalk.org/?p=3147#comment-6721 It is actually a very very broad definition. Here's the portion of the definition of "federal payment" that would seem to pull in tax refunds. 31 CFR 210.2(i)(4) DEFINES "FEDERAL PAYMENT" TO INCLUDE "(4) Miscellaneous payments including, but not limited to, interagency payments; grants; loans; fees; principal, interest, and other payments related to United States marketable and nonmarketable securities; overpayment reimbursements; and payments under Federal insurance or guarantee programs for loans."  ALSO, THE PREAMBLE TO THE NEW RULE INCLUDES THE FOLLOWING PASSAGE: "In addition, Treasury believes that once prepaid cards provide the specified consumer protections, these cards will be used in novel ways. An  example of this is receiving tax refunds on these prepaid cards."  I don't see how it would include tax refunds and even the postman's paycheck. It is actually a very very broad definition. Here’s the portion of the definition of “federal payment” that would seem to pull in tax refunds. 31 CFR 210.2(i)(4) DEFINES “FEDERAL PAYMENT” TO INCLUDE “(4) Miscellaneous payments including, but not limited to, interagency payments; grants; loans; fees; principal, interest, and other payments related to United States marketable and nonmarketable securities; overpayment reimbursements; and payments under Federal insurance or guarantee programs for loans.”  ALSO, THE PREAMBLE TO THE NEW RULE INCLUDES THE FOLLOWING PASSAGE: “In addition, Treasury believes that once prepaid cards provide the specified consumer protections, these cards will be used in novel ways. An  example of this is receiving tax refunds on these prepaid cards.” 

I don’t see how it would include tax refunds and even the postman’s paycheck.

]]> By: Adam http://banktalk.org/2011/01/20/treasury-adopts-ifr-for-federal-benefit-recipients/comment-page-1/#comment-6708 Adam Fri, 21 Jan 2011 14:49:51 +0000 http://banktalk.org/?p=3147#comment-6708 Right. I think that the term "federal payment," as it appears in the IFR, is probably much more narrowly defined. If it was every federal payment, then it would be a much more widely-publicized event. My belief is that it will includes things like Social Security and maybe VA benefits. I wonder if it will also apply to food stamps. Food stamps are a bit different than either of the former. Right. I think that the term "federal payment," as it appears in the IFR, is probably much more narrowly defined. If it was every federal payment, then it would be a much more widely-publicized event. My belief is that it will includes things like Social Security and maybe VA benefits. I wonder if it will also apply to food stamps. Food stamps are a bit different than either of the former.

]]> By: Payday_Tired http://banktalk.org/2011/01/20/treasury-adopts-ifr-for-federal-benefit-recipients/comment-page-1/#comment-6660 Payday_Tired Thu, 20 Jan 2011 17:25:30 +0000 http://banktalk.org/?p=3147#comment-6660 Keep in mind that a "federal payment" includes nearly every form of government payment: public assistance, social security, tax refunds, and even the postman's paycheck. This feels like an overstep by the government with virtually no time to comply. Also, as it relates to the credit feature prohibition, why is it ok for a checking account to receive a federal payment with virtually no strings attached - yet prepaid cards cannot have any form of credit tied to them? Why doesn't the rule apply to Wells Fargo checking accounts and preclude WF from offering Direct Deposit Advance? Keep in mind that a “federal payment” includes nearly every form of government payment: public assistance, social security, tax refunds, and even the postman’s paycheck. This feels like an overstep by the government with virtually no time to comply. Also, as it relates to the credit feature prohibition, why is it ok for a checking account to receive a federal payment with virtually no strings attached – yet prepaid cards cannot have any form of credit tied to them? Why doesn’t the rule apply to Wells Fargo checking accounts and preclude WF from offering Direct Deposit Advance?

]]> By: John Galt http://banktalk.org/2011/01/20/treasury-adopts-ifr-for-federal-benefit-recipients/comment-page-1/#comment-6650 John Galt Thu, 20 Jan 2011 14:40:09 +0000 http://banktalk.org/?p=3147#comment-6650 The last bullet point mandating that all Reg E protections be added to these prepaid benefits cards will exponentially increase the costs to the card provider as well as to the consumer. Charge-off expenses will go up dramatically and will be passed along to the card holders in turn. The last bullet point mandating that all Reg E protections be added to these prepaid benefits cards will exponentially increase the costs to the card provider as well as to the consumer. Charge-off expenses will go up dramatically and will be passed along to the card holders in turn.

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