Legislator Yellen urges Treasury to remove ‘red tape’ for Series I bonds

With the cost of living rising, a federal lawmaker wants to remove any barriers to buying Series I bonds, an inflation-protected, virtually risk-free asset that currently pays 9.62% annual interest through October.

re \ come back. Abigail Spanberger, of Virginia, on Thursday sent a letter to Treasury Secretary Janet Yellen, expressing concerns about bond-buying difficulties amid rising inflation and stock market volatility.

“During this inflation crisis, the Treasury Department needs to do more to ensure that red tape and outdated systems do not prevent Americans, especially the elderly, from accessing savings options that can protect their money from inflation and market volatility,”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

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What to know about buying Series 1 bonds via TreasuryDirect

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

Investors can buy bonds after opening an account through TreasuryDirect. While many sign up without problems, some accounts require additional identity verification, which includes bringing Form 5444 to a bank or credit union for a “signature guarantee” before mailing it back.

“While I understand the need for fraud protection, this complex process prevents Americans from opening these accounts,” Spanberger wrote, noting that some investors may concede or “miss weeks of accruing interest.”

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

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

“It is very difficult for Americans to reach customer service representatives,” Spanberger wrote, referring to regular wait times of more than two hours.

It urged the Treasury Department to increase its customer support capacity and to report on the progress of renovating the site, with requests to Congress for additional resources for both efforts, if needed.

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

“We are also in the process of developing a modern and updated alternative to the current TreasuryDirect system,” they added.