If you still have a Bank of America account, this might motivate you to move your money:
CORDOVA, S.C.– Shawana Busby does not seem like the sort of customer who would be at the center of a major bank’s business plan. Out of work for much of the last three years, she depends upon a $264-a-week unemployment check from the state of South Carolina. But the state has contracted with Bank of America to administer its unemployment benefits, and Busby has frequently found herself incurring bank fees to get her money.
To withdraw her benefits, Busby, 33, uses a Bank of America prepaid debit card on which the state deposits her funds. She could visit a Bank of America ATM free of charge. But this small community in the state’s rural center, her hometown, does not have a Bank of America branch. Neither do the surrounding towns where she drops off her kids at school and attends church.
She could drive north to Columbia, the state capital, and use a Bank of America ATM there. But that entails a 50 mile drive, cutting into her gas budget. So Busby visits the ATMs in her area and begrudgingly accepts the fees, which reach as high as five dollars per transaction. She estimates that she has paid at least $350 in fees to tap her unemployment benefits.
“It really boggles my mind,” she said. “This bank is taking little bits of money out of thousands of pockets, including mine.”
Bank of America recently aborted plans to charge ordinary banking customers $5 a month to use their debit cards in the face of national outrage. But the bank has quietly continued to mine another source of fees: jobless people who depend upon the bank’s prepaid debit cards to tap their benefits. Bank of America and other financial firms — including U.S. Bank, Wells Fargo and JP Morgan Chase — have secured contracts to provide access to public benefits in 41 states. These contracts typically allow banks to collect unlimited fees from merchants and consumers.
In short, the same banks whose speculation delivered a financial crisis that has destroyed millions of jobs have figured out how to turn widespread unemployment into a profit center: The larger the number of people who are out of work and dependent upon the state for sustenance, the greater the potential gains through administering their benefits.
Move yo’ money! I joined a credit union and I have great service and LESS JUNKMAIL! Yea!
Sounds like the unemployed get no choice of who administers the debit cards, so “move yo’ money” doesn’t help.
BofA is evil. Always has been, always will be. Best to nuke them from orbit, just to be sure.
Snarki is right. The unemployed who get the debit cards have no choice. Most states aren’t sending paper checks anymore. If you don’t have a checking account to which the payments can be made, the state gives you a debit card from the bank they are dealing with the administer the UI benefits program.
One of the reasons the states give for doing this is so that the unemployed person/food program client/cash assistance recipient can learn how to budget their money and minimize the fees. States have been reluctant to negotiate contracts with banks so that the client doesn’t have fees to pay to get their money.
Yes, many users are too poor to have a checking account, much less a savings account.
here in PA you can have your ui direct deposited into your credit union account in lieu of the debit card. not sure, but i’d be surprised if they didn’t have that option in other states.
somegirl: yes, many states do have the option of direct deposit into your own account… but you have to have the savings or checking account beforehand. If you don’t have one, you’re stuck with the states debit card program and the bank they contracted with.