Lawmaker urges Yellen, Treasury Department to remove ‘red tape’ for Series I bonds

As the cost of living soars, one federal lawmaker wants to remove any barriers to buying Series I bonds, an inflation-protected and nearly risk-free asset that currently pays 9.62% annual interest through October.

Rep. Abigail Spanberger, D-Va., on Thursday sent a letter to Treasury Secretary Janet Yellen, voicing concerns about the difficulties of buying I bonds amid rising inflation and stock market volatility. 

“During this inflation crisis, the Treasury Department must do more to ensure that red tape and outdated systems do not prevent Americans, particularly seniors, from accessing savings options that can protect their money from inflation and market swings,” Spanberger wrote in a letter.

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I bonds have seen unprecedented demand since the annual rate spiked to 7.12% in November, with 1.85 million new savings bond accounts opening through June 24, according to a Treasury official.

Investors can purchase I bonds after opening an account through TreasuryDirect. While many register without issues, some accounts require additional identity verification, which involves bringing Form 5444 to a bank or credit union for a “signature guarantee” before mailing it back.  

“While I understand the need to protect against fraud, this complicated process prevents Americans from opening these accounts,” Spanberger wrote, noting that some investors may give up or “miss out on weeks of accruing interest.”

The letter calls for more identity verification options, such as using a notary public, and the ability to submit the form online. Treasury officials told CNBC in June they are working on expanding certification to any notary public.

The letter also addresses concerns about customer experience, including challenges with reaching phone support and the TreasuryDirect website.

“It is exceedingly difficult for Americans to reach customer service representatives,” Spanberger wrote, citing wait times regularly above two hours.  

She urged Treasury to increase customer support capacity and report on the progress of revamping the website, with requests to Congress for additional resources for both efforts, if needed.

“We’re committed to ensuring that TreasuryDirect users have a positive customer experience,” a Treasury spokesperson told CNBC in June, highlighting recent changes, such as shifted resources, hiring temporary staff, and website and phone support improvements.