Section 3 



RECOMMENDATIONS 



THE JOINT TREASURY/ SOCIAL SECURITY STUDY GROUP RECOMMENDS THAT THE DEPARTMENT 

 OF THE TREASURY AND THE SOCIAL SECURITY ADMINISTRATION INAUGURATE A DIRECT- 

 DEPOSIT PROGRAM BY PROVIDING SOCIAL SECURITY BENEFICIARIES WITH FULL AWARENESS 

 AND FREE EXERCISE OF THE OPTION TO BE PAID BY CREDIT TO AN ACCOUNT IN A 

 FINANCIAL ORGANIZATION. SUCH A PROGRAM WILL IMPROVE SERVICE TO BENEFICIARIES 

 AND REDUCE COSTS TO THE GOVERNMENT. THE PROBLEMS WITH THE POWER-OF-ATTORNEY 

 PROCEDURE ARE SOLVABLE AND A DIRECT-DEPOSIT SYSTEM APPEARS ATTAINABLE. 



3.1 PROBLEMS ARE SOLVABLE - LATE NOTICES 



The findings show chat 27% of the power- of-attorney beneficiaries subject to 

 adverse actions received late notification. It is, therefore, recommended 

 that these notices be mailed directly to direct-deposit beneficiaries. The 

 basis for this recommendation is detailed in the following, paragraphs. 



The bank survey findings show there is a decreasing willingness in financial 

 organizations to forward material as the volume of such material increases — 

 and financial organizations have no legal obligation to forward material 

 they might receive for a depositor. However, financial organizations are 

 continuing to solicit beneficiaries to use the power-of-attorney procedure. 

 These efforts will continue to swell the numbers of power-of-attorney cases 

 and make the need for these direct communications more pressing. 



Furthermore, the ultimate payment concept envisioned for direct-depositors is 

 an Electronic Funds Transfer System. A major cost savings in such a system 

 would be the elimination of the mailing of individual checks. This would 

 eliminate the current method of including informational material in the check 

 envelope. With this concept in mind, maintaining the beneficiary's mailing 

 address would provide the capability for all communications to be sent di- 

 rectly to the beneficiary. 



Several methods were examined to eliminate late notices while continuing to 

 rely on financial organizations. These included: (1) today's system strength- 

 ened by recommendations from the American Bankers Association, the Federal 

 Home Loan Bank Board and the Credit Union National Association that immedi- 

 ately upon receipt, financial organizations should forward notices to the 

 beneficiaries; (2) lengthening the time period during which a beneficiary 

 may protest the action; and (3) a postage paid envelope containing the no- 

 tice, with the beneficiary's name imprinted on it, and a request that the 

 address be annotated on the envelope by the financial organization and that 

 it be forwarded to the beneficiary. None of these methods completely assures 

 that notices would be received by the beneficiary and, if received, would be 

 in time to allow protest of the action. 



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