WASHINGTON – Results of a nationwide survey sponsored by the U.S. Department of Treasury and the Federal Reserve Banks indicate a "troubling difference" between seniors in the U.S. and baby boomers when it comes to direct deposit. Understanding the Dependence on Paper Checks: A Study of Federal Benefit Check Recipients and the Barriers to Boosting Direct Deposit found that among those ages 65 and older, 72% use direct deposit. In contrast, only 59% of those ages 45-64 – those consumers that make up the majority of the baby boomer generation – said they use it. According to the survey that was conducted by telephone among 1,400 adults age 18 and over, among the 40% of Americans who don't currently use direct deposit, there were three main reasons – 21% said they like to go to a financial institution to deposit their check; 19% said they don't trust direct deposit; and 18% indicated they like receiving a paper check. After evaluating the responses, three primary themes were prevalent among the check users interviewed: *Tangibility – many expressed a desire to see and hold the physical payment in check form. *Control – both the need for control and the sense of control that recipients have when handling checks was expressed, especially among the Social Security respondents. Having money deposited directly in their financial institution seemed to them to take away their sense of control. *Standard of Living -respondents, especially those receiving SSI, thought that receiving checks helped them better manage their money and, consequently, assisted them in maintaining their standard of living. The Treasury and Federal Reserve Banks have been encouraging direct deposit for consumers of federal benefits for the past several years through the Go Direct campaign in an effort to shift from paper payments to direct deposit. The agencies sponsored the survey as part of that campaign that launched nationwide in September 2005. Commenting on the survey's findings, Dick Gregg, commissioner of the Treasury's Financial Management Service said, "If the trend with pre-retirees continues, the sheer size of the 77 million baby boomer population, coupled with the impending postage increases, will drive up the government's costs to issue paper checks exponentially – and taxpayers will bear the burden." -

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