[Federal Register Volume 71, Number 151 (Monday, August 7, 2006)]
[Rules and Regulations]
[Pages 44584-44585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E6-12689]


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DEPARTMENT OF THE TREASURY

Fiscal Service

31 CFR Part 208

RIN 1510-AB07


Management of Federal Agency Disbursements

AGENCY: Financial Management Service, Fiscal Service, Treasury.

ACTION: Interim final rule with request for comment.

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SUMMARY: The Financial Management Service (FMS) is publishing an 
interim final rule amending 31 CFR part 208 (part 208) to facilitate 
the delivery of Federal payments to victims of disasters and 
emergencies. Part 208 implements the provisions of 31 U.S.C. 3332, 
which generally requires that Federal payments be made by electronic 
funds transfer (EFT). Under 31 U.S.C. 3332, the Secretary of the 
Treasury (Secretary) must ensure that any individual required to 
receive a Federal payment by EFT have access to an account at a 
financial institution at a reasonable cost and with certain consumer 
protections. This amendment implements 31 U.S.C. 3332 by providing that 
the Department of the Treasury may establish and administer accounts 
for disaster victims in order to allow for the delivery of Federal 
payments by EFT. We are proceeding with this amendment in the form of 
an interim final rule that is effective without delay.

DATES: This interim final rule is effective August 7, 2006. Comments on 
the interim final rule are due on or before September 6, 2006.

ADDRESSES: This rule is available on the Financial Management Service's 
Web site at the following address: http://www.fms.treas.gov/eft. You 
may also inspect and copy this rule at: Treasury Department Library, 
Freedom of Information Act (FOIA) Collection, Room 1428, Main Treasury 
Building, 1500 Pennsylvania Avenue, NW., Washington, DC 20220. Before 
visiting, you must call (202) 622-0990 for an appointment. You may 
submit comments on the rule by going to the Government-wide rulemaking 
Web site, http://www.regulations.gov, and following the instructions 
for sending your comments electronically. Alternatively, you may email 
your comments to FMS at [email protected]. You may also mail 
your comments to: Sally Phillips, Director, EFT Strategy Division, 
Financial Management Service, 401 14th Street, SW., Room 420, 
Washington, DC 20227. Comments received may be made publicly available.

FOR FURTHER INFORMATION CONTACT: Sally Phillips, Director, EFT Strategy 
Division, at (202) 874-7106 or [email protected]; or Natalie 
H. Diana, Senior Counsel, at (202) 874-6680 or 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

    Treasury is amending part 208 in order to facilitate the delivery 
of Federal benefit and assistance payments to victims of emergencies 
and disasters. During the aftermath of Hurricane Katrina in 2005, many 
individuals who had been displaced from their homes were in immediate 
need of financial assistance. Treasury worked with Federal agencies to 
develop ways to provide Hurricane Katrina evacuees with fast, 
convenient, and secure access to assistance and benefit payments. 
Mindful of the possibility that a future emergency or disaster could 
disrupt the delivery of Federal payments through conventional methods 
such as direct deposit and check, we are amending part 208 to provide 
for the establishment of accounts at a financial institution for 
disaster or emergency victims in order to allow for the delivery by EFT 
of Federal payments.

Authority and Purpose

    31 U.S.C. 3332 generally requires that all non-tax Federal payments 
be made by EFT, unless waived by the Secretary. The Secretary must 
ensure that individuals required to receive Federal payments 
electronically have access to an account at a financial institution at 
a reasonable cost and with the same consumer protections as other 
accountholders. See 31 U.S.C. 3332(f), (i)(2).
    Part 208 implements the requirements of 31 U.S.C. 3332. Part 208 
sets forth requirements for accounts to which Federal payments may be 
sent by EFT; provides that any individual who receives a Federal 
benefit, wage, salary, or retirement payment is eligible to open an 
Electronic Transfer Account (ETA) at a financial institution that 
offers such accounts; and establishes the responsibilities of Federal 
agencies and recipients under the regulation. Part 208 also sets forth 
a number of waivers to the general requirement that Federal payments be 
delivered by EFT. Thus, part 208 contemplates that an individual 
entitled to a Federal payment either has access to a bank account to 
which the payment can be delivered electronically, or that the 
individual can receive and make use of a check payment.
    In the extraordinary circumstances of a disaster or emergency, 
however, many individuals may not have access to their bank accounts 
and may not be able to readily establish new bank accounts. Such 
individuals would have no way to receive an electronic Federal 
assistance or benefit payment. Moreover, as Hurricane Katrina 
illustrated, in disaster or emergency situations, the postal delivery 
of checks may be delayed or disrupted at the very time when the 
expeditious delivery of Federal assistance and benefit payments is

[[Page 44585]]

critical in assisting people in disaster situations who urgently need 
funds in order to pay for food, clothing and shelter. Even where 
Treasury checks can be expeditiously delivered to disaster victims, 
individuals who have been displaced from their homes may be unable to 
establish their identities due to lost or inaccessible documentation. 
As a result, financial institutions may be unwilling to cash Treasury 
checks for these individuals, because they cannot determine the 
identity of the individual or whether a Treasury check that an 
individual is seeking to cash has been stolen and fraudulently 
endorsed. Finally, check payments may raise security concerns in 
disaster situations, since individuals who cash checks will typically 
be carrying significant amounts of cash in order to make purchases.
    The interim final rule gives Treasury the authority to quickly 
establish accounts for disaster and emergency victims, as well as the 
flexibility to determine what features such accounts should have in 
order to meet the needs of payment recipients.

Amendment of Part 208

    We are amending 31 CFR part 208 by adding a new Sec.  208.11 that 
provides that Treasury may establish accounts at financial institutions 
for victims of a disaster or emergency in order to allow for the 
electronic delivery of Federal payments. New Sec.  208.11 gives the 
Secretary flexibility to determine what features such accounts should 
have in light of the particular nature of the disaster or emergency. 
Sections 208.4, 208.6, 208.7 and 210.5 of title 31 CFR do not apply to 
the establishment of accounts or issuance of payments pursuant to this 
section. For example, the waivers set forth in Sec.  208.4 are not 
applicable in situations where Treasury is establishing accounts for 
the express purpose of allowing for the delivery by EFT of Federal 
payments to disaster victims. The requirement in Sec. Sec.  208.6 and 
210.5 that a Federal non-vendor electronic payment be deposited to a 
deposit account in the name of the recipient does not apply to accounts 
established pursuant to Sec.  208.11, nor are agencies required to 
notify check recipients and newly-eligible payment recipients of 
options available to them, as is normally required under Sec.  208.7. 
Further, Treasury will be able to deliver payments to accounts 
established pursuant to Sec.  208.11, notwithstanding any other 
instructions from the payment recipient.

Regulatory Analyses

    Request for Comment. We invite comment on all aspects of the 
interim final rule.
    Request for Comment on Plain Language. On June 1, 1998, the 
President issued a memorandum directing each agency in the Executive 
branch to write its rules in plain language. This directive is 
effective for all new proposed and final rulemaking documents issued on 
or after January 1, 1999. We invite comment on how to make this interim 
final rule clearer. For example, you may wish to discuss: (1) Whether 
we have organized the material to suit your needs; (2) whether the 
requirements of this interim final rule are clear; or (3) whether there 
is something else we could do to make this rule easier to understand.
    Notice and Comment; Effective Date. We are proceeding without 
notice and comment on this rulemaking because of the need to be 
prepared to deliver Federal assistance and benefit payments during the 
current hurricane season, which is already underway. Obtaining prior 
notice and comment would delay implementation of this rule and could 
cause hardship to individuals who might be urgently in need of food, 
clothing and shelter in the event a hurricane, disaster or other 
emergency occurs. Accordingly, under the provisions of the 
Administrative Procedure Act at 5 U.S.C. 553(b)(B) and 553(d)(3), we 
find good cause that prior notice and comment on this rule and a 30-day 
delay in its effective date is impracticable and contrary to the public 
interest.
    Although the rule will take effect without prior notice and 
comment, we are inviting comment and will consider the comments 
received.
    Executive Order 12866. It has been determined that this interim 
final rule is not a significant regulatory action as defined in 
Executive Order 12866. Therefore, a regulatory assessment is not 
required.
    Regulatory Flexibility Act. Because no notice of proposed 
rulemaking is required, the provisions of the Regulatory Flexibility 
Act do not apply.

List of Subjects in 31 CFR Part 208

    Accounting, Automated Clearing House, Banks, Banking, Electronic 
funds transfer, Financial institutions, Government payments.

Authority and Issuance

0
For the reasons set out in the preamble, 31 CFR part 208 is amended as 
follows:

PART 208--MANAGEMENT OF FEDERAL AGENCY DISBURSEMENTS

0
1. The authority citation for part 208 continues to read as follows:

    Authority: 5 U.S.C. 301; 12 U.S.C. 90, 265, 266, 1767, 1789a; 31 
U.S.C. 321, 3122, 3301, 3302, 3303, 3321, 3325, 3327, 3328, 3332, 
3335, 3336, 6503; Public Law 104-208, 110 Stat. 3009.


0
2. Add a new Sec.  208.11 to read as follows:


Sec.  208.11  Accounts for disaster victims.

    Treasury may establish and administer accounts at any financial 
institution designated as a financial agent for disaster victims in 
order to allow for the delivery by electronic funds transfer of one or 
more Federal payments. Such accounts may be established upon terms and 
conditions that the Secretary considers appropriate or necessary in 
light of the circumstances. Treasury may deliver payments to these 
accounts notwithstanding any other payment instructions from the 
recipient and without regard to the requirements of Sec. Sec.  208.4, 
208.6, and 208.7 of this part and 31 CFR 210.5. For purposes of this 
section, ``disaster victim'' means an individual or entity located 
within an emergency area, or an individual or entity that has relocated 
or been displaced from an emergency area as a result of a major 
disaster or emergency. ``Emergency area'' means a geographical area in 
which there exists an emergency or disaster declared by the President 
pursuant to the National Emergencies Act (50 U.S.C. 1601 et seq.) or 
the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 
U.S.C. 5121 et seq.). The maintenance of accounts and the provision of 
account-related services under this section shall constitute reasonable 
duties of a financial agent of the United States.

    Dated: July 31, 2006.
Kenneth R. Papaj,
Commissioner.
[FR Doc. E6-12689 Filed 8-4-06; 8:45 am]
BILLING CODE 4810-35-P