JPMorgan Takes over Finances for Kentucky State Government

[The Straight Story]

JPMorgan Takes over Finances for Kentucky State Government

The bank that played a major role inflating the house bubble, and consequently helped cripple Wall Street in 2008, has become the state bank of Kentucky.

Name the financial transaction and JPMorgan Chase is now in charge of it: deposits, payroll checks, disbursing federal monies and more. Kentucky’s state government handles $12 billion to $15 billion a year, and JPMorgan will have its fingers on all of it.

In return the bank will be paid $1.3 million in state fees.

Kentuckians can only hope their government’s partnering with JPMorgan Chase won’t backfire like it did in Alabama, where a complicated bond-financing scheme crafted by the bank for a new sewer treatment plant crippled Jefferson County and left it teetering on bankruptcy.

http://www.allgov.com/Controversies/ViewNews/JPMorgan_Takes_over_Finances_for_Kentucky_State_Government_110806

[Rex]

1. Sure why not, next year they will be running for office.

"Vote JPMorgan! They already own everything else!"

[Gin]

3. I never thought about where states bank....how do they do it?

do all work with private banks? or state run banks?

[Rex]

4. Both, but we are seeing an oligarchy form between the key players

The private institutions have far more money and power then your local or state bank. State banks don't have billion dollar lobbying firms in Washington DC like the big boys do.

[Gin]

5. thanks for the info.....never gave that a thought...

was listening to a panel on CSPAN a few Fridays ago and one man said there are big pension funds(CA for one) wanting to create, and transfer their funds into state banks but Geithner won't allow it. I think the panel was about job creation.

[FarCenter]

6. Banks provide check writing and receipts processing for many large organizations

Banks have specialized operations center that do back office functions like writing checks, printing advices, stuffing envelopes and mailing checks; or like opening envelopes, processing remittance slips, processing payment checks; or doing the electronic equivalent of sending and receiving payments.

They provide these services to governments, non-profits, corporations, etc., and generally can do it more cheaply per item than each organization can do it for themselves.

Chase has contracts with other state and local governments to do things like process tax returns, send out tax refunds, etc.

[dixiegrrrrl]

8. J.P. Morgan produces ( for a profit) all food stamp debit cards and unemployment cards.

Unemployment "checks" in some states are actually debit cards.
Food stamps are now debit cards.
And J.P. Morgan has the government contract to make them.

The Treasury is going to require automatic deposit of Soc. Sec. checks in 2013 which can be direct deposit OR debit cards for "non-bank" customers. Chances are J.P. will make those, too.

[Rex]

10. J.P. Morgan-Chase is a mammoth organization.

Wonder if those are no bid contracts?

[dixiegrrrrl]

11. Seems to be a VERY profitable contract, see this:

"JP Morgan (JPM) is the largest processor of food stamp benefits in the United States. JP Morgan has contracted to provide food stamp debit cards in 26 U.S. states and the District of Columbia. JP Morgan is paid for each case that it handles, so that means that the more Americans that go on food stamps, the more profits JP Morgan makes. Yes, you read that correctly. When the number of Americans on food stamps goes up, JP Morgan makes more money.'

Also:

"It turns out that JP Morgan also provides child support debit cards in 15 U.S. states and they also provide unemployment insurance benefit debit cards in seven states."

And

"So what happens if you have a problem with your food stamp debit card?

Well, you call up a JP Morgan service center. When you do this, there is a very good chance that you are going to be helped by a JP Morgan call center employee in India.
That's right - it turns out that JP Morgan is saving money by "outsourcing" food stamp customer service calls to India.
Just try to imagine the irony - a formerly middle class American that has lost a job to outsourcing calls up to get help with food stamp benefits only to be answered by a call center employee in India."

http://seekingalpha.com/article/247234-jp-morgan-profits-from-food-stamp-processing-business

[tsuki]

2. Kentucky is a welfare state. They receive $1.41 in transfers from

the federal government for every $1 they pay in federal taxes. JPMorgan goes for the gold.

[LiberalEsto]

7. Privatization, one state at a time

Their plan is working

[RegieRocker]

9. Right before your eyes but you refuse to see.