Bailed out banks scamming fees from unemployment benefits
For hundreds of thousands of workers losing their jobs during the recession, there's a new twist to their financial pain: Even as they're collecting unemployment benefits, they're paying bank fees just to get access to their money.
Thirty states have struck such deals with banks that include Citigroup Inc., Bank of America Corp., JP Morgan Chase and US Bancorp, an Associated Press review of the agreements found. All the programs carry fees, and in several states the unemployed have no choice but to use the debit cards. Some banks even charge overdraft fees of up to $20 — even though they could decline charges for more than what's on the card.
"It's a racket. It's a scam," said Rachel Davis, a 38-year-old dental technician from St. Louis who was laid off in October. Davis was given a MasterCard issued through Central Bank of Jefferson City and recently paid $6 to make two $40 withdrawals. ...
Some banks, depending on the agreement negotiated with each state, also make money on the interest they earn after the state deposits the money and before it's spent. The banks and credit card companies also get roughly 1 percent to 3 percent off the top of each transaction made with the cards.
Neither banks nor credit card companies will say how much money they are making off the programs, [AND IT'S OUR MONEY!!!!!] or what proportion of the revenue comes from user versus merchant fees or interest. It's difficult to estimate the profits because they depend on how often recipients use their cards and where they use them.
Of course, if the banks were regulated public utilities, none of this would be happening. The finances would be transparent, the overpaid CEOs would be gone, and all the "complex," "innovative" techniques for looting money from the public would be gone, too -- of which this little scheme for chiselling another nickel out of the wounded and desperate is but the latest example.
It's all about the fees, baby!
NOTE For the list of bailed out banks, see here. Yes, Citigroup Inc., Bank of America Corp., JP Morgan Chase and US Bancorp are all on it.
NOTE Via This Week With Barack Obama, whose brother these clowns should definitely not have messed with.