The Plight of TeasuryDirect's Paper Verification

Background

A couple of days ago, I decided that it would make sense to buy T-bills to take advantage of the risk-free interest rate. At a time where the most common savings bank account interest rate is .01% (although some, such as Ally bank, offer up to 1.45%), the Treasury's 1-month Coupon Equivalent Rate of 1.75% looks rather appealing. If you're willing to loan your money to the Treasury for 3 months or 6 months, that rate increases to 1.95% and 2.08% respectively. Please see other rates here. Needless to say, that's a pretty nice improvement for a risk-freeTM investment. If the Federal Government defaults on its debt, you've got bigger issues.

Buying T-bills

While you can buy these from various private brokers, the Treasury is actually beginning to compete with these private companies, and you can purchase them directly from the source. This requires a TreasuryDirect account. Filling out the proper online forms isn't too painful, but after submitting, I was informed by email that my personal information could not, in fact, be verified. My personal theory is that my very common name paired with a lack of tax records created an issue in verifying my identity. Thus, I needed to fill out a form, get a signature guarantee, and mail it to the Treasury.

The Long Endeavour

For those who don't know, a signature guarantee is basically a specialized form of notarization. It must be issued by a Federally-insured, deposit-taking institution which has registered with one of three various databases. This all sounded perfectly reasonable, until I learned that none of the institutions will issue a signature guarantee to non-account holders (Not completely unreasonable given that they are held legally liable). For someone who lacks an account at one of these institutions, the prospects of getting a TreasuryDirect account just diminished.

I began this process by going to my local Well Fargo just to check it they would be willing to issue the guarantee to me. Naturally, they were confused from the start. It wasn't clear to them what I wanted it for or why it was necessary. Regardless, they did assure me that they would not issue it.

Next try: looking at the database of signature guarantors in hopes of finding one who would issue to me. Low-and-behold, the Federal Reserve Bank of Philadelphia is on the list. My hope was that this Federal Institution would issue them for free.

So I called the Fed and asked. The man who answered had absolutely no idea what I was asking about. He'd never even heard about signature guarantees before. None-the-less, he tried his best to transfer me to the proper department - the Research Library.

I ended up on the phone with a very confused librarian who was, although very nice, completely out of her depths to help me with signature guarantees. She gave me the consumer help line for the Fed.

Once I called, I was promptly informed that this number was for complaints against commercial banks. The lady would not, however, let me lodge a complaint against the Federal Reserve Bank of Philadelphia: "Sir, you'd have to call your local congressman for that".

Next stop was the help line for TreasuryDirect, in hope they could recommend somewhere for me and/or an alternative. The first young lady I spoke to was very nice and seemingly helpful. Apparently there was a "Paying Agent Stamp" which the Treasury provides to "most large banks" to stamp any bonds which are being redeemed (I assume Treasury bonds). She told me that this would be suitable for my form.

Back to Wells Fargo: "We've never heard about that, sir, and we're a very large bank".

I called the TreasuryDirect help line again just to confirm I had the name correct and that it would be available to non-account holders: "Well that's up to the private business, good luck" (Read, "drop dead").

How about Santander? The clerk who answered was very receptive and put me on hold to look for the "Paying Agent Stamp". She was able to find a stamp which appeared to match the description that the Treasury had given me, although no one knew the term "Paying Agent Stamp". She said that she'd have to email her branch manager to ask if I could use it for my form. Even if I was an account holder, they still would be hesitant to use it for anything except redeeming bonds, despite what the Treasury told me. That being said, I'm not even account holder, so it's really just luck of the draw at this point.

Conclusion

I still haven't heard back from the Santander employee, but with any luck, I'll only need to make an additional 10 phone calls and spend 3 more days attempting to get this stamp and/or signature guarantee. I may never be able to buy my T-bills, but I think there's a real lesson here: don't give your child the 11th most common first name if you already have the 3rd most common surname.

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This comment is helpful and I thank @introbot for posting it. However, I downvoted it because of what I felt was an excessive amount of upvotes. Were all of these bots to also upvote @chrsunwil's excellent post, I'd have no issue. However, it's clear these upvoters are essentially self-upvotes rather than accounts that are aiming to help new users.

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Fascinating saga. I also recently signed up for a TreasuryDirect account and receive the dreaded email:

Thanks again for opening a TreasuryDirect account. We are having difficulty verifying the information you provided when opening your account. For your protection, please complete the Account Authorization form and mail it to Treasury Retail Securities Site, P.O. Box 7015, Minneapolis, MN 55480-7015

The bottom of the Account Authorization form states:

ACCEPTABLE CERTIFICATIONS: Financial institution’s official seal or stamp (such as corporate seal, signature guaranteed stamp, or medallion stamp). (Notary certification is NOT acceptable.)

Luckily I was traveling to New Hampshire and brought the form to a local bank with which I still had an account. Things did not go as smoothly as hoped. First, the bank notarized the form. Then I mentioned to the teller that the form says in bold "Certification by a notary public is NOT acceptable." So she sent me to another branch where she thought the bank would have its official seal. However, at the other branch location, I learned that only branch managers were able to perform signature guarantees and that the branch manager here was out sick (day after memorial day). So I was sent back to the original branch, where a manager had been in the back the entire time. Finally, I received the elusive signature guarantee and mailed the form. A few days later, I received an email from [email protected] stating:

We received your Savings Bonds/Treasury Marketable Securities materials.

So fingers crossed that I get approved. I guess my experience wasn't even that brutal... sounds like yours is already worse.

Odd that the government makes it so difficult to loan them money. Paging the experts, @dollarvigilante and @adamkokesh as to how this could be?

Perhaps in the end this will be for the best, as it will leave you no other choice than to invest in a certain asset class that is secured with cryptography rather than fiat (government decree).

I hope that you get approved.

Insane how reliant they still are on paper for verification. I understand that they don't want identity fraud, but they're protections and much beyond those of regular commercial online institutions. Most will be perfectly happy with a photo of a Driver's License. In the very least, they could come up with some way to do this without opening a new bank account. Perhaps going into your local government and getting a signature there? To your point, at least crypto is easy to get.

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This comment is helpful and I thank @steemsociety for posting it. However, I downvoted it because of what I felt was an excessive amount of upvotes. Were all of these bots to also upvote @chrsunwil's excellent post, I'd have no issue. However, it's clear these upvoters are essentially self-upvotes rather than accounts that are aiming to help new users.

I'm happy to undo my downvote should these accounts upvote the original post.

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