2013-07

Encouraging Government Use of Prepaid Cards

SENATOR JUAN PICHARDO (RI) BUSINESS & ECONOMIC DEVELOPMENT TASK FORCE

WHEREAS, the National Hispanic Caucus of State Legislators (NHCSL) recognizes that one in four Americans is unbanked or has limited access to financial services and that Hispanic Americans are disproportionally affected by this;

WHEREAS, electronic payments provide an opportunity for governments seeking efficiency to replace the paper-check system for making payments to constituents (social security, food stamps, tax refunds etc.) with a significantly cheaper, safer and more useful system;

WHEREAS, prepaid cards provide an efficient mechanism by which governments can make electronic payments to unbanked individuals who cannot receive a direct deposit;

WHEREAS, prepaid cards can provide a safe, simple way for the Latino community to gain greater financial control and act as a tool for better financial management, offering equal access to the benefits arising from the efficiency, convenience and security of the electronic payment system;

WHEREAS, a government-issued prepaid card, affiliated with a payments network, will bring significant advantages to unbanked users, saving the cost and time invested in cashing a check; ensuring payments are received on time, every time; protecting payments against the risk of loss or theft of cash; and allowing electronic payments to be made at the point-of-sale, over the telephone, or online;

WHEREAS, government-issued prepaid debit cards can be of special value in the event of a natural disaster, allowing governments to rapidly put funds in the hands of victims and relief workers for use in ATMs and at the point-of-sale to immediately purchase food, water and other essentials;

THEREFORE BE IT RESOLVED, that NHCSL encourages legislators to take steps in their own states to fully replace the antiquated paper-check system for government payments to its citizens with an electronic and fully transparent payment system which incorporates prepaid debit cards for those that are unbanked; and

BE IT FURTHER RESOLVED, that the NHCSL applauds the U.S. Treasury for its Direct Express prepaid debit card, which is expected to save taxpayers and the social security system more than $1 billion over ten years and reports 95 per cent of recipients are satisfied or very satisfied with the electronic benefit system;

BE IT FINALLY RESOLVED, that a copy of this resolution be transmitted to the President of the United States, the Vice President of the United States, members of the United States House of Representatives and United States Senate, and other federal and state government officials as appropriate.

THIS RESOLUTION WAS ADOPTED ON JULY 13, 2013, AT THE NHCSL EXECUTIVE COMMITTEE MEETING HELD IN MASHANTUCKET, CONNECTICUT AND RATIFIED ON NOVEMBER 16, 2013 AT THE NHCSL ANNUAL MEETING HELD IN ORLANDO, FLORIDA.

SPONSORED BY: Senator Juan Pichardo (RI)