The Internal Revenue Service and the Treasury Department are beginning to send nearly 4 million economic impact payments by prepaid debit card, instead of by paper check or direct deposit.
The IRS had trouble with some direct deposits because it was relying on information from taxpayers’ 2018 and 2019 tax returns, and in some cases the money went to temporary bank accounts set up by tax prep chains. Paper checks are starting to go out, but they take longer. The prepaid debit cards promise to provide more convenience, but if they get lost in the mail, that could pose problems as well for people eagerly awaiting their economic impact payments.
Matt Posner is founder and principal of CSG. Mr. Posner has more than a decade of experience in public finance and policy. He has testified before the U.S. Senate Committee on Finance on infrastructure finance problems facing the country and spent years educating staff in the U.S. House of Representatives, the U.S. Senate, the U.S. Treasury Department and the Securities and Exchange Commission on public policy and market implications. Mr. Posner has been quoted on his views and published in the Wall Street Journal, the New York Times, Bloomberg News, The Bond Buyer, the Municipal Finance Journal and the Government Finance Officers Association’s Government Finance Review, among others. Court Street Group LLC is a research and consulting firm based in Brooklyn, New York. At CSG, we build bridges among Washington, Wall Street and the Fintech worlds with strong market research and extensive, independent policy experience. CSG also has ties to Latin America and helps clients navigate there.
Patrick McCoy is the Director of Finance at the Metropolitan Transportation Authority (MTA) in New York where he manages the Authority's debt portfolio (currently $35 billion) and directs the issuance of over $2 billion in tax-exempt municipal bonds annually under the Authority's multi credit borrowing structure. The MTA is an active issuer of debt obligations to finance the bond funded portion of MTA's Capital Program. Pat has previously served as the Executive Director of the New York City Municipal Water Finance Authority, a public benefit corporation of the City of New York that provides capital financing for the City's water and sewer system. Pat was Executive Director of New York Water from January 2007 through August 2008.Previous positions include:Deputy Director of Finance for the MTA, 2002 through 2004, and Director of Finance, 2004 — 2007.Manager of Investor Relations for the NewPower Company, a publicly traded retail energy provider headquartered in Purchase, New York. Mr. McCoy was involved in NewPower's initial public offering and listing on the New York Stock Exchange. 2001 — 2001.Manager of Investor Relations for the New York City Municipal Water Finance Authority, the Transitional Finance Authority (TFA) and TSASC, Inc. (Tobacco Securitization), 1994 — 2000. Pat created the first investor relations program for the Authority.Senior Budget Analyst, Office of Management and Budget, Community Development Unit. 1991 — 1994.Pat currently serves on the Board of Directors of the Westchester County Health Care Corporation and on the Executive Board of the Government Finance Officer'sAssociation of the United States and Canada (GFOA).Pat holds a M.S. Degree in Urban Policy Analysis and Management from the New School University in New York, and a B.A. from St. Ambrose University in Davenport, Iowa.
The Treasury said recipients can use the so-called EIP Cards to make purchases, get cash from in-network ATMs, and transfer funds to their personal bank account without incurring any fees. They can also check their card balance online, by mobile app, or by phone without incurring fees. The EIP Card can be used online, at ATMs, or at any retail location where Visa is accepted. The free, prepaid card comes with the kinds of consumer protections available to traditional bank account owners, including safeguards against fraud, loss and other problems.
“Treasury and the IRS have been working with unprecedented speed to issue Economic Impact Payments to American families,” said Treasury Secretary Steven T. Mnuchin in a statement Monday. “Prepaid debit cards are secure, easy to use, and allow us to deliver Americans their money quickly. Recipients can immediately activate and use the cards safely.”
Under the $2 trillion CARES Act that Congress passed in March in response to the economic fallout from the coronavirus pandemic, the IRS and the Treasury have been sending out payments of $1,200 to individual taxpayers, $2,400 to couples, plus an extra $500 for each of their dependent children.
The Treasury said it has already sent more than 140 million economic impact payments worth $239 billion to Americans by direct deposit to accounts at financial institutions, Direct Express card accounts, and by check. The Treasury-sponsored EIP Card is another way to distribute the money efficiently and securely to eligible recipients and their families. EIP Cards are being sent to qualified individuals who don’t have bank information on file with the IRS, and whose tax return was processed by either the Andover or Austin IRS Service Center.
The Treasury’s financial agent, MetaBank, will mail out the EIP Cards to eligible recipients starting this week. Each mailing will include instructions on how to activate and use the card.
The EIP Card is part of the Treasury’s larger U.S. Debit Card program, which offers prepaid debit card services to federal agencies for electronic delivery of non-benefit payments. MetaBank was picked as the Treasury’s financial agent for the U.S. Debit Card program in 2016, after a competitive selection process by the Treasury’s Bureau of the Fiscal Service.
For more information about the EIP Card, click here. For more details about economic impact payments, click here.
