All Things
Late last month, a national backlash forced Bank of America to abandon its plan to charge customers $5 a month to use their debit cards. But Huffington Post reportsthat the corporation has quietly been mining other sources of fees, preying on its most vulnerable customers to rake in millions in revenue:
Families who are living hand-to-mouth are outraged to discover that banks worth trillions of dollars are taking such a big cut of their benefits, when they depend on every penny. The New York Times reports today that banks have been quietly raising fees on everything from replacing lost cards to monthly maintenance. BofA customers can be charged $1.50for speaking to a customer service operator more than once a month, $1.50 for using an “out-of-network” ATM, and $0.50 for entering the wrong PIN number too many times.
Bryce Covert at New Deal 2.0 reported earlier this month that, “big banks are making a tidy profit by acting as middlemen for what should be publicly provided services.” U.S. Bancorp made $357 million in revenue from its unemployment benefit card division — more than one-fourth of its total revenue. Meanwhile JP Morgan “made $5.47 billion in net revenue for most of last year in the division that handles food stamp cards.”
Fed up with big banks’ exorbitant and never-ending fees, customers have been flocking to credit unions. One survey found that credit unions gained at least 650,000 new customers since September 29, the day Bank of America announced its debit card fee.
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All Things
No Comment Needed
The following story, reprinted from Think Progress (http://thinkprogress.org/economy/2011/11/14/367467/bank-of-america-unemployment-benefit-fees/) unfortunately speaks for itself in no uncertain terms.
Bank Of America Makes Millions Charging Fees To Withdraw Unemployment Benefits
By Marie Diamondon Nov 14, 2011 at 11:40 am
Late last month, a national backlash forced Bank of America to abandon its plan to charge customers $5 a month to use their debit cards. But Huffington Post reportsthat the corporation has quietly been mining other sources of fees, preying on its most vulnerable customers to rake in millions in revenue:
Shawana Busby does not seem like the sort of customer who would be at the center of a major bank’s business plan. Out of work for much of the last three years, she depends upon a $264-a-week unemployment check from the state of South Carolina. But the state has contracted with Bank of America to administer its unemployment benefits, and Busby has frequently found herself incurring bank fees to get her money.
To withdraw her benefits, Busby, 33, uses a Bank of America prepaid debit card on which the state deposits her funds…Busby visits the ATMs in her area and begrudgingly accepts the fees, which reach as high as five dollars per transaction. She estimates that she has paid at least $350 in fees to tap her unemployment benefits. [...]
In short, the same banks whose speculation delivered a financial crisis that has destroyed millions of jobs have figured out how to turn widespread unemployment into a profit center: The larger the number of people who are out of work and dependent upon the state for sustenance, the greater the potential gains through administering their benefits.Millions of jobless Americans like Busby have little choice but to rely on the bank’s prepaid debit cards to collect their monthly benefits. Forty-one states have contracted with Bank of America, Wells Fargo, JP Morgan Chase, and other banks to provide access to public benefits, allowing them to collect unlimited fees, both from the unemployed and state governments. South Carolina, for instance, pays Bank of America a fee for each transfer it facilitates on a debit card, and for handling direct deposit of unemployment benefits.
Families who are living hand-to-mouth are outraged to discover that banks worth trillions of dollars are taking such a big cut of their benefits, when they depend on every penny. The New York Times reports today that banks have been quietly raising fees on everything from replacing lost cards to monthly maintenance. BofA customers can be charged $1.50for speaking to a customer service operator more than once a month, $1.50 for using an “out-of-network” ATM, and $0.50 for entering the wrong PIN number too many times.
Bryce Covert at New Deal 2.0 reported earlier this month that, “big banks are making a tidy profit by acting as middlemen for what should be publicly provided services.” U.S. Bancorp made $357 million in revenue from its unemployment benefit card division — more than one-fourth of its total revenue. Meanwhile JP Morgan “made $5.47 billion in net revenue for most of last year in the division that handles food stamp cards.”
Fed up with big banks’ exorbitant and never-ending fees, customers have been flocking to credit unions. One survey found that credit unions gained at least 650,000 new customers since September 29, the day Bank of America announced its debit card fee.
-
The Greeks and the US Athens is more than 5000 miles away from Washington DC. Greece is a small country with relatively few resources. Ours is a very large, rich and powerful country. In spite of the differences, there are lessons to be learned from...
-
Lovethatbank!DoyourememberthosepostersofBarackObamawith the legend “HOPE” atthebottom?Whoever made those posters madeamistake.Thelegendshouldhaveread“BANKS.”Wehaveknownthisforalongtime:thecurrentadministrationlikesbanksawholelot.Butinthelastfewdayswehavefoundouthowmuchthisadministrationlovesbanks.Itturnsoutthatstartingin2008TheFederalReserveBanklentlargeamountsofmoneytoavarietyofverylargebanks—ononedaytheylentout1.3trillion.TheymusthavethoughtthatthiswouldnotlookgoodwhileordinaryAmericansweresuffering,becausetheyfoughtreallyhardtokeepthewholethingsecret.Thebanksgotloansatverylowinterestandthenputitinaccountsthatpaidhigherinterest.Result:thebanksmade$13billion.Whatarefriendsfor?Anotherinterestingquestion:whosemoneywastheFedlendingtothebiggestbanks?ThenextdayweheardthattheSECsettledwithCitibankfor$285...
-
A preventable crisis? The Federal Crisis Inquiry Commission, appointed to find out why banks and financial institutions collapsed in 2008, has reported to the nation. They found that the current economic crisis could have been prevented. The report...
- Why Is There Unemployment?
The Right to Life belongs to everyone of us, according to the Declaration of Independence. That means that all of us can live a secure a life without fear of physical attack. But it also means that we are assured sufficient food not to go hungry, shelter...
- Business Cooperating With Government
The Boston Globe reports that big business has recently begun to cooperate with Pres. Obama and his team. The CEO of Dow Chemical praises the president's efforts to control carbon emissions. The healthcare industry is joining Sen. Kennedy to write...