INFORMATION FOR FINANCIAL ORGANIZATIONS 

 ON JOINT TREASURY/SOCIAL SECURITY ADMINISTRATION 

 STUDY OF PAYMENTS AT FINANCIAL ORGANIZATIONS 



Under authority of Public Law 92-366, approved August 7, 1972, 

 Treasury checks covering recurring monthly benefit payments may be 

 paid, upon the written request of the person to whom payment is to be 

 made, by means of a check drawn in favor of a financial organization, 

 with credit to the account of the individual. The address on the check 

 would be that of the financial institution. The address inscription, 

 however, would include the individual's name and financial institution 

 account number. 



The Department of the Treasury and the Social Security Adminis- 

 tration are interested in implementing the procedures authorized by 

 PL 92-366 and have joined in a study aimed at (1) clearly and compre- 

 hensively identifying all problems connected with the mailing of 

 recurring benefit checks to financial organizations; (2) determining 

 the levels of direct deposit interest in both the financial institution 

 community and the beneficiaries; and (3) developing solutions to the 

 problems. Today, about 180,000 of the 27 million Treasury checks being 

 issued each month for social security benefits are mailed to financial 

 organizations under the power of attorney procedure. 



Implementing a direct deposit system will require special communi- 

 cation procedures. Paying social security beneficiaries at financial 

 organizations results in financial organization receipt of correspondence 

 intended for the beneficiaries. The address of record in the Treasury 

 and Social Security Administration, at least initially, would be that of 

 the financial institution. Most correspondence to beneficiaries is in 

 the form of check inserts — which are utilized about four times each 

 year. In addition, when checks are mailed to home addresses, the 

 Government is advised of the death of beneficiaries by the return of the 

 checks by the Postal Service, or by a member of the deceased beneficiary's 

 family. Paying individuals at financial organizations may impede the 

 prompt, direct communication of this information. 



The accompanying financial organization questionnaire evolved througl 

 a series of meetings conducted by Treasury and Social Security Adminis- 

 tration officials with representatives of the ABA, commercial banks 

 and mutual savings banks. The questionnaire is designed to capture data 

 regarding current and future direct deposit procedures and your interest 

 in the direct deposit system. 



Information developed from this joint study will form the basis 

 for a detailed analysis of the direct deposit system. I_f satisfactory 

 solutions can be evolved to effectively report and control payee changes- 

 of-address and notices of death, the Government can then proceed with the 

 implementation of PL 92-366. 



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