"As through this world I’ve wandered, I’ve seen lots of funny men;
Some will rob you with a six gun; And some with a fountain pen."
-Woody Guthrie
We all are aware that bankers and investors are walking away with billions of dollars in private profits built upon reckless gambling, secure that they were too big to fail, and now we’re getting the bill. We are aware that despite the bail outs the banks aren’t lending .We know about the foreclosures and banktruptcies. But the sordid shenanigans being used to rob the most vulnerable have largely been under the radar.
Despite their breathtaking profits and obscene bonuses, U.S. banks have figured out a way to add additional squeeze and to make some extra dollars from those who can least afford it, the unemployed and those on food stamps. What they are doing is detestable. They are actually creating more poverty, misery and unemployment, for profit. We are all paying for it.
They Make a Deal
As unemployment has risen, states have been overwhelmed with unemployment claims. America’s banks offered a deal the states couldn’t refuse:
"Send us your weekly unemployment funds", the banks said, "In return, we’ll issue our VISA or MasterCard debit cards to your laid-off workers, on which we’ll post their benefits electronically. It’s free to you and you can save the cost of processing and sending out the checks. You Win!"
What a deal! Thirty states signed on and more are lining up. A number of banks got contracts.
From: Banks Get into the Unemployment Biz, and Quickly Start the Rip-offs
But if the system is good for the states, it's great for the banks. A February 2009 Associated Press article noted that Missouri’s Central Bank, which won that state’s contract, could reap $6.3 million this year alone.
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The banks profit from interest earned on the funds the states deposit with them until the money is posted onto the debit cards. Then there’s the money the banks get from retailers where the unemployed shop with their cards — from 2 percent to 3 percent per transaction.
The banks could do this and still make an honest profit, without any risk at all.
But such sums are not large enough, it seems. So the banks have figured how to extract more money from the millions of unemployed now using the debit cards. The devil’s in the fees.
Let Them Eat Fees
The banks differ in the fees they charge in the various states they have contracts with, but they add up quickly to those without jobs who are trying to stretch every dollar from unemployment insurance and become victims of the banks, eager to gnaw away at their benefits. There are rules and fees for everything, withdrawals, over limit attempts, lost cards, and inquiries (to avoid over-limit attempts).
Most banks charge nothing for cash withdrawn inside one of their branches, from tellers, but some levy fees after the first visit in a week or month: Since I live in Texas, I’ll use as an example the fees Chase collects from the unemployed here.
· Chase gives one freebie branch withdrawal, after that it’s $5, in Texas.
· Chase will let Texans have one free ATM withdrawal a week at one of their ATMs (subject to daily withdrawal limits). Each after that will be $1.50. Except that withdrawals from out-of-network ATMs, will cost double fees. A first fee goes to the bank with the contract — Chase charges $2.75, A second fee — from $2 to $4 — goes to the out-of-network bank that owns the ATM.
· Penalties for transactions denied due to insufficient funds, whether at ATMs or stores will have a fee, $1 in Texas — though the bank doesn’t process anything,
· To avoid fees for declined transactions, the jobless must find out how much money is on their cards to ensure that a purchase or other transaction won't exceed the total. But here’s the catch: You can do it free at Chase ATMs, but it will be 50 cents at all others.
From: OurFuture
Rapacious bankers and investors drove this folly, inflating a housing bubble by huckstering mortgages to folks who couldn’t pay them or didn’t understand them, inventing exotic securities based on mortgages, marketing them widely, without a clue to their actual worth. Under the conservative hand of Alan Greenspan, the Federal Reserve sat idly by as the bankers had their predators’ ball. Now the banks are in trouble. Their basements are filled with securities that have no market. They are scrambling to sell off assets, raise new capital, and unload the lousy paper.
The biggest waste in government is bailing out private follies. The largest thievery comes from privatized companies making out like bandits. The biggest crooks aren’t welfare moms; they are the guys who rob you with fountain pens.
They Build a Two-For-One
Following a congressional mandate in 1996, states started moving toward electronic delivery of food stamp benefits, now called Electronic Benefit Transfer or EBT. The banks stepped in to get a slice of that pie. For a fee, the banks provide debit cards to benefit recipients. Each month, they will load money onto the cards and process transactions at stores. They make fees from the states and then outsource the work, overseas.
This makes a profit in addition the new job losses they create, increasing the proceeds from their unemployment ‘base’.
They Send Jobs Overseas
Americans have never liked the idea of jobs going overseas. But for many, it's more offensive when taxpayer dollars -- including those in the federal stimulus plan -- go to create those jobs. And when those jobs deal with food stamps, unemployment insurance and other public benefits, well forgot irony, to many it's just downright plain insulting.
From: ABCNEWS_"Food Stamps Create Jobs... in India"
Chase provides food stamp debit cards in 26 states and the District of Columbia. It also provides child support debit cards in 15 states and unemployment insurance cards in seven states.
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The 130,000 food stamp families in West Virginia have their calls routed to India, according to Jerry Luck, program director for the state.
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The 488,000 households in Tennessee also have their calls sent to JP Morgan call centers in India. The state's contract runs through February 2012 and there are currently no plans to change it, according to Michelle Mowery Johnson, director of communications for state's Department of Human Services.
With due respect to Texas, they haven't farmed out the call system to India. But that is only because Health and Human services situation has gotten so bad that there is virtually no phone contact available for clients at all. See:The Dallas Morning News and Texas #HHSFails! I'm told we can get a gun permit in a day, but people are waiting six months for food stamps.
Have our state leaders forgotten that the purpose of a state is for the well-being and protection of its people? I think we should remind them of that, and start making them accountable to the people.
Was George Carlin Right?