Banks Extract Fees On Unemployment Benefits

[Derechos]

Out of work and living on a $189-a-week unemployment check, Rob Linville needs to watch every penny. Lately, he has been watching too many pennies disappear into the coffers of the bank that administers his unemployment check via a prepaid debit card.

The state of Oregon, where Linville lives, deposits his weekly benefits on a U.S. Bank prepaid debit card. The bank allows him to make four withdrawals per month free of charge. After that, he must pay $1.50 for each visit to the ATM and $3 to see a teller. Managing his basic expenses, including rent, bus fare and groceries, typically requires more than four withdrawals, he says. Unexpected needs -- Linville recently bought a sport coat for $20 to prepare for a job interview -- entail more. He's afraid to withdraw his full benefits in one shot, knowing that the bank could sock him with a $17.50 overdraft fee if he exceeds his balance. So he pulls out small amounts of cash as he needs it, incurring about $15 in fees in the last two months he says.

"I'm so broke," Linville said, his voice expressing resignation that this is simply how the world works. "But I don't really have any other options."

Across the nation, people receiving a range of state-furnished benefits -- from unemployment insurance and food stamps to cash assistance for poor families -- are facing similar options and reaching the same conclusion. In 41 states major banks and financial firms have secured contracts to provide access to public benefits via prepaid debit cards. And banks are increasingly extracting hefty cuts of these funds through an assortment of small fees. U.S. Bank, JP Morgan Chase, Wells Fargo, Bank of America and other institutions hold contracts to distribute these benefits on prepaid debit cards.

http://www.huffingtonpost.com/2011/11/01/bank-fees-unemployment-benefits_n_1033700.html

[Speck Tater]

1. Kick them while they're down. Capitalism at its finest. nt

[onethatcares]

2. the big banks think the only reason they exist is to pull your money

into their hands.

They think it was just the debit card fees people are upset about but they are in for an awakening I think.

[napi21]

3. It seems to me it would still be better to do ONE thorough

reconciliationof that dr card to make positively sure you know exactly how much money remains on the card, then withdraw all but a small cushion, like maybe $5.00. Then withdraw the total of each deposit as it becoms avaiolable. It's throwing money away when you give it to these greedy banks in unjustifiable fees, and as long as you take the time to do that first reconciliation, and only do one withdrawl from than on, there's no chance of an overdraft.

[iris27]

4. These fees are of course beyond the pale, but I still don't understand why he doesn't just cash out

the full amount each week as soon as it hits. If you know the exact amount, you're not going to incur an overdraft fee. In his shoes, I'd be a little uneasy having it all in cash, but I'd rather deal with that than pay the fees.

[dixiegrrrrl]

5. And in 2013 Soc Sec. will be via debit cards unless you have opted for direct deposit.

And yes, there are fees.

But ya know what?
i am willing to bet that sometime after 2013, we who chose direct deposit will be told we have to go to the card.
Mr. Dixie just today got a letter in the mail encouraging him STRONGLY to sign up for the Soc. Sec. Debit Card.
That's right, they pushed the CARD, not signing up for direct deposit, but the card!

I just as STRONGLY tore the damn thing up.

He has until next year to sign up for direct deposit.
I just signed up for it last month.
So far so good.
But I do not trust the banks one iota.

[Ruby the Liberal]

6. Easy way around that.

Direct deposit.

Yes, that requires a bank account, but according to the article, he already has one, but opted not to go that route.

He has a bank account but thought the U.S.Bank card would give him a way to pay bills immediately when his unemployment benefits arrived.

I hope someone told him that changing his method of deposit is only a call/web login away.