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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsFederal Program to Pay Benefits without Checks Hurts Poor, Helps One Bank
Federal Program to Pay Benefits without Checks Hurts Poor, Helps One Bank
Determined to phase out paper checks as a form of payment, the Department of the Treasury paid a Texas-based bank millions of dollars to provide prepaid debit cards to Social Security recipients who are poor or dont have bank accounts or dont trust banks. The result: the bank did well by the switchover, while many Americans suffered.
The Treasury Department launched the program five years ago after signing a deal with Comerica Bank, based in Dallas, to issue the Direct Express debit cards to those receiving Social Security benefits. Treasury officials said the change would save the government millions of dollars a year in administrative costs.
Meanwhile, Comerica was paid $5 for every debit card it distributed to Social Security recipientsplus fees. For instance, Comerica was allowed to limit customers to only one free withdrawal a month. After that, a 90-cent fee per withdrawal was levied on the account.
Also, after signing its first exclusive deal with the Treasury Department, Comerica renegotiated the arrangement, which made it more lucrative for the bank, according to Daniel Wagner of The Center for Public Integrity. Comericas contract runs out in January 2015.
http://www.allgov.com/news/where-is-the-money-going/federal-program-to-pay-benefits-without-checks-hurts-poor-helps-one-bank-130622?news=850362
Autumn
(45,120 posts)Bunch of damn whiners.
Jackpine Radical
(45,274 posts)If they can afford king crab legs, they can afford a few cents to help out a needy bank.
HiPointDem
(20,729 posts)SamKnause
(13,110 posts)The same thing is happening with the SNAP; food stamp cards known as EBT cards.
Chase and several other banks are making a killing.
If you receive other benefits they are loaded on the card as well.
Each one of those has a fee attached as well.
Some fees are per use.
This country is so insanely corrupt it is hard to comprehend.
whistler162
(11,155 posts)is it more or is it less than the fees charged by the bank after the first withdrawal?