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Counselors See Problems with Treasury's Direct Express

Adam Rust's picture

Posted February 21, 2014

Because of a small detail in how Treasury's Direct Express prepaid card is administered, some consumers are being obstructed from getting a loan modification. 

Paper statements from Direct Express include a blank page at the end of the document. The pages are sequenced, so a

four page statement reads "page one of four," with the last page being blank.

But it becomes a problem when a cardholder is simultaneously seeking to get a loan modification. Underwriters at some servicers will not trust a statement with a blank page. Loan mod departments are notorious for being obstinate, so it is hardly surprising that even the smallest excuse merits obstructionist tactics. Nonetheless, even though the problem is a product of someone else, it is not too much to ask that Treasury could take the lead on the solution. 

This is a copy of page one and page four of one statement. The name of the account holder is covered up by loose scrap paper.

Treasury Direct Express paper statement

Counselors do not feel that their concerns are being heard.

"When I contacted Direct Express and shared with them about the paging issues, they said that I'm just trying to make a big deal out of nothing. They say 'this is the way that it is in their system.' It's frustrating," she added. "They make it seem like I'm trying to make a major deal with it."

Treasury has contracted with Comerica Bank to provide a prepaid debit card for benefits recipients that have previously received their checks by mail. More than four million people are signed up with a Direct Express account.

Otherwise, DirectExpress seems to be a solid card. There are only a few fees associated with the card:

  • 75 cents for a paper statement
  • 90 cents for an ATM withdrawal. Account holders get one free withdrawal per month. One shortcoming is that the card has no surcharge-free ATM network partner.
  • Several charges for transactions conducted in foreign countries.
  • A few dollars for a replacement card.

In fact, the card is so affordable that Treasury has paid Comerica to issue the cards since 2010.