Treasury Has Decided To Come Out With Checking Accounts for the Unbanked People

In the last week the Treasury made an announcement that it plans to bring out a pilot program by which unbanked persons or under-banked persons can have checking accounts. These people make transactions with cash only as for some reason or the other they don’t have checking accounts.

Matt Anderson, the spokesperson of Treasury stated that these persons, most of the times become targets for higher fees for paying bills or converting checks into cash or any other financial services.

This initiative which is yet to be named will be effective from a time that coincides with the tax season. Treasury will offer the consumers through mail or other means an option of a direct deposit to a checking account that is newly created instead of the age old system of giving a paper check. After the withdrawal of the refund those accounts can function as basic checking accounts.

Anderson added saying that Treasury looks at the matter as an opportunity at the time of tax payment as at that time many people receive their biggest payment of the year and they plan to introduce unbanked or under-banked individuals to financial products of the mainstream.

Treasury officials are busy looking for financial partners and they are looking at the interested financial institutions according to the spokesman. The exact terms of the accounts are not yet been worked out.

Anderson added saying that Treasury has decided that the accounts will rely on debit card purchases. Account holders will not be able to write checks.

The overhead cost of a bank gets increased due to check writing and to make up for that the accounts get costly and in turn increase the probability of hazardous occurrences like overdrafts.

 Anderson further said that debit card is the most effective means to deliver the accounts to this section of people which expand the path of the financial products of the mainstream and thus reliance on costly financial products gets reduced.

The program has intention to help out many people for whom the mainstream financial products are out of reach because of dishonored checks, bad credit reputation or other financial debacle. If checks can be get ridden off banks are also at less risk which will make them to accept less amount of fees and have to offer other beneficial terms for the accounts.