Lawmaker urges Treasury Department to end ‘red tape’ on Series I bonds
As the cost of living skyrockets, one federal legislator wants to remove any barriers to buying Series I bonds, an inflation-protected and near-risk-free asset that currently earns 9.62% per annum through October.
Rep. Abigail Spanberger, of Virginia, sent a letter to Treasury Secretary Janet Yellen on Thursday expressing concern about the difficulty of buying I bonds amid rising inflation and stock market volatility.
“During this inflationary crisis, the Treasury Department must do more to ensure that bureaucracy and outdated systems do not prevent Americans, especially the elderly, from accessing savings opportunities that can protect their money from inflation and market fluctuations,” Spahnberger wrote in a letter.
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I bonds enjoyed unprecedented demand as the annual rate jumped to 7.12% in November and 1.85 million new savings bond accounts were opened through June 24, according to a Treasury official.
Investors Face Identity Verification Barriers
Investors can purchase bonds I after opening an account through TreasuryDirect. While many sign up with no problem, some accounts require additional identity verification, which includes Form 5444 to a bank or credit union for “signature guarantee” before sending it back.
“While I understand the need for fraud protection, this complicated process prevents Americans from opening these accounts,” Spanberger wrote, noting that some investors may give up or “miss weeks of interest accumulation.”
The letter calls for more identity verification options, such as public notaries, and the ability to submit the form online. Treasury officials told CNBC in June they were working to expand certification for any public notary.
“Extremely difficult” to contact support
The letter also addresses concerns about customer experience, including issues with TreasuryDirect’s phone support and website.
“It’s extremely difficult for Americans to get in touch with customer service representatives,” Spanberger wrote, citing wait times regularly exceeding two hours.
She urged the Treasury to increase customer support capabilities and report on the progress of the website revamp, asking Congress for more resources for both efforts if needed.
“We are committed to providing TreasuryDirect users with a positive customer experience,” a spokesman for the US Department of the Treasury said. told CNBC in June, highlighting recent changes such as moving resources, hiring temporary staff, and improving the website and phone support.
“We are also in the process of developing an updated state-of-the-art replacement for the existing TreasuryDirect system,” they added.