The problem with this is, there have been instances of storefront check cashing agencies and payday lenders taking loan payments and fees out of a recipient's Social Security checks -- even though it's illegal. Good idea to get some solid oversight in place to protect the poorest and most vulnerable from illegal practices:

Several consumer groups are urging the Treasury Department to revise plans to eliminate paper Social Security checks, saying the changes are needed to prevent potential abuses by creditors.

In April, the Treasury said it would stop issuing paper checks in 2013 and make all payments electronically. More than two million people who receive Social Security checks in the mail would have their benefits deposited directly into bank accounts or onto prepaid debit cards.

The proposal to eliminate paper checks is intended to save taxpayers money and make benefits more secure. Currently, 80% of Social Security recipients choose to have their benefits deposited directly in banks.

Last week, consumer groups including the Consumer Federation of America and Consumers Union asked the Treasury to provide more safeguards to prevent potential abuses from "payday lenders" and banks getting access to Social Security and disability benefits before beneficiaries receive them.

The requests come after congressional hearings about high-interest lenders, which provide small, short-term loans that are secured by coming pay or benefits checks, having access to Social Security funds of customers who owe them money.

"We're working to implement strong consumer protections against abusive or deceptive practices," said Dick Gregg, a fiscal assistant secretary at the Treasury.

"They make you feel like a criminal. They try scare tactics, harassment and everything. And you take a look and ask, 'Seriously, is the attorney general of Florida after me for a $14 bounced check?' "

- Michael O'Neil, who wrote two bad checks while living in Florida.

Amazing story. Basically, these District Attorney offices are renting out their name to deceptive bill collectors for bounced checks under $100. Think about it: You're so tight for money that you bounce a check under $100, you still have to pay all the bank fees AND you get slammed for $200+ in charges from this rent-a-cop collection agency? Nice, huh.

I always question the legal premise of anything like this I get in the mail, and you should, too:

DETROIT, Michigan (CNN) -- Michelle O'Neil and her husband Michael are young, scrambling to stay afloat financially and, by their own admission, not the best money managers.

Both acknowledge they wrote two bad checks, totaling about $200, as they were moving from Florida to Michigan in late 2007. The bad checks, they say, were mistakes. But nearly a year after they settled in a Detroit suburb, letters and phone calls followed from Florida.

"They told me they were part of the attorney general's office," Michelle O'Neil told CNN. "And that was scary in the sense that I've never had any legal problems. I'm a teacher."

But the calls weren't coming from a state agency. They were coming from a company hired by a Florida county prosecutor's office to collect on bounced checks.

The firm -- American Corrective Counseling Services, or ACCS -- splits the money it collects with the prosecutor's office. But it also makes money from financial management courses that people who wrote the checks are required by law to attend at their own expense. And the company's contract with the prosecutor's office states those classes are its "principal business activity."

The $14 check Michael O'Neil wrote to a Florida drugstore ended up costing him $285, including the $160 class fee.

O'Neil said he and his wife tried to make good on the checks with the merchants involved and pay any fees required. But he said the companies told him it was too late -- they had turned the matter over to ACCS.

The couple had been in Michigan for 10 months before they got their first notice from the company, which warned that "the State Attorney will not discharge the report(s) of criminal activity against you until all program requirements, including attending class, have been met."

"They make you feel like a criminal," Michael O'Neil told CNN. "They try scare tactics, harassment and everything. And you take a look and ask, 'Seriously, is the attorney general of Florida after me for a $14 bounced check?' "

The short answer is yes. Prosecutors are outsourcing some of their bad-check collections to companies like ACCS.

But Jennifer Osborn, a California student who bounced a $92 check to her college bookstore, said the company's money-management class was useless to her.

Continue reading »

Hmmm....very interesting.....

Bob Geiger:

Patrick Leahy (D-VT) and the Senate Judiciary Committee will get another crack at Attorney General Alberto Gonzales as he appears to testify on Tuesday. Leahy last week sent Gonzales a sneak peak at some of the questions he intends to ask to get "clarification" on some of Gonzales's hazy recollections of what went down in the political firings of eight federal prosecutors.

The word I get is that Leahy will at first stick with questions easy for Gonzales to be truthful about, such as "what day of the week follows Tuesday?"

John Kerry (D-MA) will chair a meeting of the Foreign Relations Committee called "Pakistan's Future: Building Democracy, Or Fueling Extremism?" Not that Team Bush cares, but it's possible the subject of Osama bin Laden's whereabouts might come up.

Barack Obama's S. 453, a bill "to prohibit deceptive practices in Federal elections" will be examined in the Judiciary Committee while the Rules and Administration Committee will have a hearing to get testimony relevant to S. 1487, the Ballot Integrity Act.