Electronic Payment Panned

amaxwell@govexec.com

Not all federal benefits recipients are enthusiastic about a Clinton administration plan to make benefits payments electronically by 1999. Such a move will "impose undue hardship on many recipients," an American Association of Retired Persons representative told a House subcommittee on Wednesday.

Marcelyn Creque, AARP regional volunteer director, told a hearing of the House Government Reform and Oversight Subcommittee on Government Management, Information and Technology that in order for everyone to reap the benefits of electronic transfer of payments, consumer protection provisions need to be added.

Electronic funds transfer (EFT) is one of the goals in Access America, the Clinton administration plan to wire agencies into the digital age. The administration wants agencies to conduct all of their financial matters electronically by 1999. To protect recipients of funds, Creque suggested that the Treasury Department limit the use of transaction and account fees related to EFT; require financial institutions to offer minimal bank accounts for recipients who do not currently have accounts; and provide adequate public education and notice about the impending change.

"Congress and the relevant federal agencies must ensure that these individuals are protected from unfair, deceptive or abusive practices," Creque said.

Rep. Stephen Horn, R-Calif., defended electronic transfers.

"A lot of theft goes on with these checks right out of mailboxes," he said. "Just to protect senior citizens, EFT would be beneficial." The Department of Veterans Affairs currently transfers 49 percent of its funds electronically, Mark Catlett, the agency's chief financial officer, said at the hearing.

"We have eliminated 10 million paper transactions," he said. "Many agencies want to emulate us."

The subcommittee's hearing was scheduled to continue on Thursday.

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