Unemployment checks are being replaced by pre-paid debit cards in California, affecting 1.2 million of the State’s residents. The advantages would seem obvious — no waiting for a check to arrive in the mail and a lower cost for the state as it no longer has to to hire people to handle all that nasty paperwork. On the other hand…..
The cost may be lower up front but you have to wonder if costs and “fees” won’t rise in a year or two, after the state fires or transfers all those workers and the new service provider, Bank of America, gets a lock on the system. Not that banks are known for adding fees to accounts as unforeseen expenses pop up. Maybe they really do have our best interests at heart? I mean, look at how they welcomed Elizabeth Warren, and her push for consumer protection into their ranks. What’s that you say? She’s been given the boot and is returning to Harvard? Oh my.
According to a news release from the Employment Development Department (EDD), there will be “no fees with careful use of the card.” So there may be fees involved, if participants in the program aren’t “careful?” Interesting. It also says there are “transfer options” for those who have “their own bank accounts.” Wonder if there will be a fee for that, and if there is none now are there guarantees that a fee won’t be added later? Wonder how long BofA will hold the money before transferring it to another bank, and who will decide how long the money should be held, presumably, interest free? And will those without bank accounts need to open one — and if so, who do you think they’ll open it with? I mean, who will it be most convenient to open an account with? Bank of America, or someone else?
Seems like it was so much simpler when they just sent out a check.
According to EDD, initially, the program is expected to save the state $4 million a year. But hey, Bank of America is a business. They cut this deal because they expect to make money on it. Banks are always trying to increase their profitability and BofA just picked up all those new customers. Do you suppose the people at the state who made the deal have a lock on no new fees or charges going forward?
Feels a little like privatization, doesn’t it? And it was all done so quietly, too. Seems like this should be a huge news item, and yet I’ve heard nothing about it. I try and keep up, but it’s possible I just missed it. Anyway, it might all be for the best. It might save the state millions up front and millions in perpetuity as we march bravely into the future, hand in hand with BofA. I’m sure negotiators for the state got us the best deal possible, and that lobbyists for the bank played no role whatsoever in the process.
Why does it feel like Jerry Brown just changed his spots and is taking a cue from George W. Bush, by pushing Republican inspired privatization on us as the march toward a paperless society proceeds? Who do you think will be in charge once the march ends? Not Elizabeth Warren. She’s been sent back to Harvard.
Here’s the video-