Banks Extract Fees On Unemployment Benefits

[Donnachaidh]

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

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.

More at the link --

[lonestarnot]

1. Another outrage!

[Arctic Dave]

2. What kind of scumbag would do that to their feelow man.

These people need to be destroyed.

[redqueen]

3. So wrong.

Nice bonus for the banks though, getting a contract to take money from those least able to afford it. And 41 states have saddled their citizens with this crap. Unreal.

[supernova]

4. Another job for OWS

to bring to the discussion, perhaps.

It's unconscionable that banks are allowed to privatize monies that have already been set aside for services.

[MineralMan]

5. Well, that sucks. I'm not quite sure why there's a risk of grabbing

the whole amount in one transaction, though. That's certainly what I'd do.

[FarCenter]

6. So get cash back at the grocery store, instead of going to an ATM