Banks Charging Fees to Access Unemployment Benefits

monopolyYes, you read that right. U.S. banks — who never saw a fee they didn’t like — are now charging some jobless Americans fees when they try to access unemployment benefits that have been distributed via debit cards. The AP reports:

Thirty states have struck such deals with banks that include Citigroup Inc., Bank of America Corp., JPMorgan ChaseUS Bancorp, an Associated Press review of the agreements found. All the programs carry fees, and in several states the unemployed have no choice but to use the debit cards. Some banks even charge overdraft fees of up to $20 — even though they could decline charges for more than what’s on the card….. and

The banks say their programs offer convenience. They also provide at least one way to tap the money at no charge, such as using a single free withdrawal to get all the cash at once from a bank teller. But the banks benefit from human nature, as people end up treating the cards like all the other plastic in their wallets…..

So you can guess at how much you need to take out in cash and still have enough in your account to pay your bills by check, or you can incur fees by withdrawing cash more than once. Even though the common practice among traditional account holders is that as long as you’re withdrawing from your own bank, you don’t get charged a fee — no matter how many times you withdraw money. Yeah, that’s “convenience.” And here’s how it ends up screwing over the average unemployed American:

Arthur Santa-Maria, a laid-off engineer who lives just outside Albuquerque, N.M., said he didn’t pay any fees the first time he was laid off, for several months in 2007. His unemployment benefits were paid by paper checks. He found a new job last year but was laid off again last fall.

This time, he was issued a Bank of America debit card — a “prepaid” card in industry lingo — but he was surprised to learn he had to pay fees to get his money. He asked the bank to waive them. It said no. That’s when Santa-Maria called back to ask how to check his account online. He logged on and saw that the call cost him a half dollar. To avoid more fees, Santa-Maria found a Bank of America ATM at a strip mall and withdrew $80 at no charge. When he got back to his car, he decided to take out the rest of his money — $250 — and deposit it in his bank account.

Afterward, Santa-Maria logged on to his account and saw a charge of $1.50 for two withdrawals in one day.

“They’re trying to use my money to make money,” Santa-Maria said. “I just see banks trying to make that 50 cents or a buck and a half when I should be given the service for free.”

Nationalization of banks? I’m still not sure. But I think we ought to try a little regulation….

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5 comments

  1. the new head of the SEC, a woman whose name I cannot remember right now, is on the job and trying to get regulation back on the books and being enforced.

    good luck to her. wall street has run wild for so long…

  2. When I read this story the other day, I thought it was from The Onion. For some unknown reason I must have had temporary amnesia and I forgot how evil and greedy banks are.

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