The Debt Collection Improvement Act of 1996 requires that most Federal payments be made by electronic funds transfer after January 2, 1999. If you are currently receiving your Federal payment by check or you have just become eligible to begin receiving a Federal payment, you have several choices:
1. Receive your payment by Direct Deposit through the financial institution of your choice.
With this option, the Government makes payments electronically through a program called Direct Deposit. Direct Deposit is a safe, convenient, and reliable way to receive your Federal payment through a financial institution. (A financial institution can be a bank, credit union, savings bank, or thrift account.) Many financial institutions offer basic, low-cost accounts in addition to full-service checking or savings accounts.
2. Wait for a basic, low-cost account, called an Electronic Transfer Account (ETA) to become available.
If you do not have an account with a financial institution, you can wait for an ETA to become available. In the future, a low-cost account called an ETA, will be available at many financial institutions. Like Direct Deposit, the ETA is a safe, convenient, and reliable way to receive your Federal payment through a financial institution. You are eligible to open this account, at a low monthly fee, if you receive a Federal benefit, wage, salary, or retirement payment. Your Servicing Personnel Office will contact you and let you know when the ETA is available and which financial institutions in your area offer the account.
3. Continue to receive a check.
If receiving your payment electronically would cause you a hardship because you have a physical or mental disability, or because of a geographic, language, or literacy barrier, you may receive your payment by check. In addition, if receiving your payment electronically would cause you a financial hardship because it would cost you more than receiving your payment by check, you may receive your payment by check. Please notify your servicing personnel office by submitting a written waiver.
Waivers must be in writing and include: the employee's name, address, social security number, signature, date, and a statement that payments should not be made by electronic funds transfer because it would impose a hardship due to a physical or mental disability, a language barrier, or because of nonexistence of an account with a financial institution or would impose a financial hardship.
If you do not currently have direct deposit, a written waiver must be on file in your Official Personnel Folder. If you have not already done so, please submit your written waiver as soon as possible. Also, feel free to call your servicing personnel office if you need more information on Direct Deposit, the ETA, or hardship waivers.
Management of Federal Agency Disbursements (EFT), 31 CFR 208, dated 09/25/98; Final Rule - http://www.fms.treas.gov/fedreg/31CFR208.txt
Financial Management Services - EFT Overview