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Child Support Recipients in Colorado Seeing Payments On U.S. Bank Plastic Instead of Paper Checks

DENVER, Feb 10, 2003 (BUSINESS WIRE) -- U.S. Bank (NYSE:USB) and the State of Colorado are introducing an innovative payment program that allows the state to disperse child support payments on a plastic card versus a paper check.

The Family Support Registry or FSR Card functions like a debit card though it is not attached to a checking or savings account. The state collects court ordered payments as it has in the past, but instead of cutting a check and mailing it to the recipient it electronically loads the payment on to the FSR Card that the recipient can use to make purchases or withdraw cash. The card carries the Visa logo so it is accepted anywhere that Visa is accepted.

The program is the first of its kind in the United States. It's an innovation that cuts costs for the state because it no longer has to produce and mail a check, and it brings convenience and safety to the cardholders who no longer have to find the time and place to cash their checks or pay check cashing fees.

"For many years we've been searching for a safe, reliable, and inexpensive way to deliver child support payments electronically to parents who don't have bank accounts. It appears we've found it in this card, and it is only a matter of time before many other government agencies pick up on it to deliver their payments," said Craig Goellner, systems director for the State of Colorado.

Since the program began as a pilot in 2001, it has become a recognized and valued instrument by more than 1,200 recipients in Colorado. The results were so impressive that the state is now making it available to all parents who receive child support checks. "Parents have told us they love the card. Our experience during the pilot bears this out in that we have had very few cancellations. It looks to us like a win-win for all."

Parents have also said that the card helps them enter the mainstream financial world by allowing them to make purchases wherever Visa is accepted. Cardholders can track child support funds and spending separately from other funds through monthly statements or by free, 24-hour access via the Internet or telephone. In addition, merchants such as grocers who have traditionally cashed child support checks for customers no longer risk encountering check fraud.

The card is available to the recipient free of charge. They only fee they incur is if they withdraw funds from an ATM, in which case there is a $1.50 fee. If the card is lost or stolen, it is backed by Visa's zero liability policy, which means the cardholder is not responsible for unauthorized purchases.

"Creation of this pre-paid card for delivering payments to our parents who receive child support is public sector/private sector collaboration at its best," Goellner said. "I couldn't be more pleased with the teamwork we've enjoyed working with U.S. Bank to build and test this card."

"We are very excited to have jointly developed a product that provides more options to the custodial parents in Colorado as well as making the Family Support Registry a more efficient division within the state government," said Matthew Roan, vice president of commercial banking for U.S. Bank. "The end result was truly an effort of both U.S. Bank and FSR working together to provide more convenience to the custodial parents of Colorado."

U.S. Bank implemented a similar pilot in the State of Washington and is working with other government agencies to initiate stored value payment cards in more states and in various capacities.

U.S. Bancorp, with assets in excess of $180 billion, is the 8th largest financial services holding company in the United States. The company operates 2,142 banking offices and 4,604 ATMs, and provides a comprehensive line of banking, brokerage, insurance, investment, mortgage, trust and payment services products to consumers, businesses and institutions. U.S. Bancorp is home of the Five Star Service Guarantee which assures customers of certain key banking benefits and services or customers will be paid for their inconvenience. U.S. Bancorp is the parent company of U.S. Bank. Visit U.S. Bancorp on the web at usbank.com.

CONTACT:          U.S. Bank 
                  Teri Charest, 612/303-0732

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SOURCE: U.S. Bank

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding U.S. Bancorp's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.



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