Magazine article American Banker

Fed Banks Enlist in the Effort to Push Direct Deposit Programs

Magazine article American Banker

Fed Banks Enlist in the Effort to Push Direct Deposit Programs

Article excerpt

The Federal Reserve banks have joined forces with the National Automated Clearing House Association and the Social Security Administration to promote direct deposit services.

The marketing alliance is part of an effort to boost use of the automated clearing house network.

As part of the initiative, senior officials of the Federal Reserve and Social Security will send letters to chief executive officers at many of the nation's banks asking for support of their direct deposit marketing efforts.

The Fed also will take an active role in developing a new round of public service announcements in order to "raise public awareness and to stimulate more effort," said Paul Connolly, first vice president with the Federal Reserve Bank of Boston.

"We hope we can be helpful, particularly in working with the local ACH associations and local banks in every reserve district," Mr. Connolly said.

The new initiative is modeled after a similar program run by Nacha and the Fed for consumer electronic bill payments.

Linda Garvelink, a senior director with the Herndon, Va.-based national clearing house, said the association hopes direct deposit services can be expanded beyond the usual Social Security payments and payroll deposits into travel expense payments, educational reimbursements, dividends, and pensions.

"Despite the many benefits of direct deposit and direct payment, a more aggressive, comprehensive marketing and educational effort is needed to increase people's awareness," said Hank Bourgaux, a senior vice president with the Federal Reserve Bank of St. …

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