The U.S. Treasury Department’s announcement of a 2011 pilot program to test the delivery of tax refunds via debit card accounts represents a critical milestone by the Obama Administration to ensure millions of underbanked consumers have access to well-designed transaction products.

The pilot program, which was deeply informed by the Center for Financial Services Innovation’s SAFE-T Accounts proposal, is a significant first step to offering lower-income tax filers the option to directly deposit their tax refunds onto reloadable debit card accounts.

“If rolled out nationwide, this program will leverage the billions of dollars in tax refunds that are not electronically deposited each year in order to provide underbanked tax filers with a safe and affordable product that meets their basic financial services needs,” said Melissa Koide, Policy Director, CFSI. “Over 30 million underbanked individuals and families would have easy access to a tool to help them on the path towards financial prosperity.”

According to CFSI, the Federal government could potentially save tens of millions of dollars a year through issuing refunds electronically in lieu of much more costly paper checks. The tax time accounts will also introduce more underbanked consumers to the potential and utility of such financial products and broaden the overall market for these and a variety of other financial services and products.

About CFSI

The Center for Financial Services Innovation is the nation’s leading authority on financial services for underbanked consumers. Since 2004, its programs have focused on informing, connecting, and investing – gathering enhanced intelligence, brokering and supporting productive industry relationships, and fostering best-in-class products and strategies. CFSI works with leaders and innovators in the business, government and nonprofit sectors to transform the financial services landscape. For more on CFSI, go to www.cfsinnovation.com.