WASHINGTON - The U.S. Department of the Treasury is planning a pilot program of direct deposit of tax refunds for low- and moderate-income individuals. It would enable them to open new accounts that can be accessed via debit cards.
The announcement was a direct slap at what were called "high-cost alternative financial products," in a prepared statement Michael S. Barr, assistant treasury secretary for financial institutions. He cited "check-cashing and other services." While he didn't mention refund loans, his statements almost certainly encompassed those.
The department will use direct mail and payroll outreach to spread word of the program. Direct mail will be sent to low- and moderate-income indivudals who have received paper check refunds and have not provided bank account information to the department. In the payroll program, there will be insert offers for those not currently using direct deposit for tax refunds.