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PROVO — Utah County-based Bonneville Bank has been contracted to provide new IRS debit cards for a pilot program aimed at providing low and moderate income taxpayers their income tax refunds.
The U.S. Department of the Treasury announced the program Thursday to offer taxpayers a safe, convenient and low-cost financial account for the electronic delivery of their federal tax refunds, according to a news release.
Bonneville Bank will issue the debit cards with additional services provided by Bonneville Bank through its program manager, Green Dot Corp., a prepaid financial services company. Bonneville, Visa and Green Dot will offer cardholders customer service support via telephone and Internet.
This innovative card can be used for everyday financial transactions, such as receiving wages by direct deposit, withdrawing cash, making purchases, paying bills and building savings safely and conveniently, giving users more control over their financial futures.
–Deputy Secretary of the Treasury Neal Wolin
"This innovative card can be used for everyday financial transactions, such as receiving wages by direct deposit, withdrawing cash, making purchases, paying bills and building savings safely and conveniently, giving users more control over their financial futures," said Deputy Secretary of the Treasury Neal Wolin.
The Treasury Department will mail letters next week to 600,000 low- and moderate-income individuals nationwide. The letters will invite these taxpayers to consider activating a MyAccountCard Visa Prepaid Debit Card in time to have their 2010 federal tax refund direct deposited to the card.
Compared to paper checks, direct deposit provides a safer, faster and more convenient way to receive a federal tax refund, said Steve Streit, Green Dot chief executive officer.
"(The prepaid debit cards) are safer than checks because they are stolen in fairly large quantities and you just go and cash them if you have a phony ID," he said. "The cards have to be activated before you spend the money."
He noted that private information has to be verified before the cards can be used, making them less likely to be compromised.
In addition, the cards will be attached to institutional accounts that can be utilized long term.
"It's not just a one-time disbursement card. … What our hope is that people adopt these accounts as their on-going FDIC-insured savings account," Streit said. "By doing that, you can bring people out of the cash economy, out of the payday lending store or check cashing story and have them start using a regulated bank account."
Also this week, Treasury began a companion pilot initiative to encourage current and potential payroll card users to direct deposit their 2010 federal tax refund onto existing payroll cards. Nationwide, the Treasury Department estimates that more than 1.7 million workers use payroll cards to receive and access their wages, often because they do not have bank accounts.
The letters mailed to taxpayers about MyAccountCard contain information about the card's features, including free services and the fee structure for optional services.
The information also explains how to sign up and use the card to receive a federal tax refund and conduct everyday financial transactions.
As part of the pilot, the Treasury Department will randomly offer several different variations of MyAccountCard in order to evaluate which product features, fee structures and marketing messages generate the greatest positive response from taxpayers. The results will help determine the benefits and feasibility of a card account as an integrated part of the tax filing and refund process.
The program is currently considered a pilot program only right now, with a limited certain number of taxpayers being enrolled and not available to the general public.