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Direct Deposit (Electronic Funds Transfer)

Fact Sheet 31 CFR Part 208 - Summary of Key Changes

31 U.S.C. § 3332 requires that all Federal payments, other than payments under the Internal Revenue Code, to be made by Electronic Funds Transfer (EFT), subject to the authority of the Secretary of the Treasury to grant waivers. The waivers authorized by section 3332 are located exclusively in 31 C.F.R. Part 208.

On February 21, 2024, Fiscal Service published a final rule to amend the Part 208 waivers (“Final Rule”). Among other changes, the Final Rule tightens several of the existing agency waivers by either narrowing their scope or requiring the agency seeking to use the waiver to file a written waiver request with Treasury. The effective date of the Final Rule is March 22, 2024. The following provides a summary of the Final Rule’s changes to Part 208.

  1. Mandate Written Waiver Requests for Certain Agency Waivers. Under the Final Rule, agencies will be required, for certain waiver categories, to submit a written waiver request to make check payments. Agencies may issue check payments on an interim basis until Fiscal Service makes a determination on the agency’s waiver request. The procedures for submitting a waiver request are set forth in the Treasury Financial Manual (TFM). Under the changes in this Final Rule, agencies would be required to submit waiver requests to make payments by means other than EFT for the waiver categories identified below.
    • Treasury-sponsored Account Offering: The final rule amends the waiver available for types of Federal payments for which Treasury does not offer delivery to a Treasury-sponsored account to specify that if Treasury provides an agency with an option to begin delivering Federal payments to a Treasury-sponsored account and the agency still seeks to make payments by check, the agency must file a waiver request with Treasury to make payments of that type by any means other than by EFT.
    • Certain Procurements: The final rule requires agencies to submit a waiver request to utilize the waiver that is available when (i) an agency’s need for goods and services is of such unusual and compelling urgency, or (ii) where there is only one source for good or services; and the government would be seriously injured unless payment is made by a method other than EFT.
    • Disaster Relief Payments: The final rule amends the waiver for payments to recipients in disaster areas that are made within 120 days after the disaster is declared. Under this change, the Final Rule requires an agency file a waiver request with Fiscal Service if the agency seeks to extend the waiver beyond 120 days after the disaster is declared.
  2. Amend the agency waiver for non-regular, non-recurring payments. Under the Final Rule, the waiver that is available where an agency does not expect to make multiple payments to the same recipient within a one-year period on a regular, recurring basis will be available only for payments to individuals and small businesses. Additionally, the Final Rule removes the waiver’s reference to the availability of remittance data which, because of payment technology advances, is no longer relevant.
  3. Reserve to Treasury the right to nullify an agency waiver in certain circumstances. The Final Rule adds new language to clarify that Treasury has the right to nullify an agency’s use of a waiver if Treasury determines that application of the waiver would lead to an agency initiating an unusually large number or proportion of payments by means other than EFT.
  4. Clarify in the preamble that agencies are not exempt from making the first of a series of recurring payments by EFT, while providing agencies with a two-year period to come into compliance. The preamble to the Final Rule clarifies that agencies are not exempt from making initial recurring payments by EFT and provides agencies with a 2-year period to make the necessary system changes to convert these initial payments to EFT.
  5. Add a new waiver for payments in foreign currencies that are not supported by Treasury electronic payment systems. The Final Rule adds a waiver for payments in a foreign currency if Treasury does not support electronic payment in that foreign currency.
  6. Require agencies to provide Employer Identification Numbers (EINs) upon Treasury request. The Final Rule requires agencies to provide, upon Treasury’s request, the EINs assigned to the agency and that the agency has used when making federal intragovernmental payments within the 12 months preceding the request, as well as the EINs for all federal agencies to whom the agency has made a federal intragovernmental payment in the preceding 12 months. This agency EIN data is useful because it will help Treasury to identify federal intragovernmental payments that should be converted to EFT.
  7. Clarify section authorizing Treasury to assess fees for non-compliance. Current § 208.9 provides that if an agency fails to make payment by EFT in accordance with Part 208, Treasury may assess a charge to the agency pursuant to 31 U.S.C. 3335. The Final Rule amends § 208.9 to further clarify that when an agency fails to make a payment by EFT in accordance with the regulation, Treasury will consider the payment to not be timely under 31 U.S.C. 3335. Fiscal Service is still evaluating the appropriate method to assess charges to agencies in accordance with the Secretary’s authority under § 3335, which permits the Secretary to charge an agency the cost to the general fund caused by the agency’s non-compliance with the requirement to provide for the timely disbursement of Federal funds. Until such time as the method of assessing non-compliance charges is established and published in the Treasury Financial Manual, Fiscal Service will not charge agencies under § 208.9.

Last modified 02/21/24