December 16, 2009 "Consortium News" -- While posting breathtaking profits in the last two quarters – Wells Fargo’s $3.2 billion, Citigroup’s $3 billion and Chase’s $2.7 billion – U.S. banks have figured out a way to squeeze some extra dollars from those who can least afford it, the unemployed.
Here’s how it works. In the past two years, states have been overwhelmed with unemployment claims. Always eager to serve, America’s banks offered a deal the states couldn’t refuse.
Sign a contract — which won’t cost you a dime — and 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.
Thirty states signed on with the usual suspects — Citi, Wells Fargo, JPMorgan Chase, Bank of America — and some smaller ones, too. More states are lining up.
In a stroke, states dropped all their costs for printing and mailing checks. Andrew James, with North Carolina’s Employment Security Commission, told me that in the past year, his state saved a whopping $10 million. During the same time, Nevada saved $800,000, Maryland $400,000 and West Virginia $340,000.
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.
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.
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.
Nickel and Diming
The cards can be beneficial to some of the unemployed, like those who otherwise would pay whopping fees to cash checks because they don’t have bank accounts.
LINK HERE
The Usual Suspects listed above brought down Argentina's economy and are using the exact same tactics on the USA.
ReplyDeleteSadly, not enough people use community credit unions which charge minimal fees, and do accept electronic deposits. You can join a community credit union with as little as a $5 deposit.
ReplyDeleteActually I have my paycheck deposited at a local community credit union. I changed from a big bank to creditunion. They are just as bad and charge the same if not more fees per month on some things. I think it is time to start lynching these bastards one by one. The revoulotion is coming and the banks are in the cross hairs. I am glad my family dont work at a bank. Even the tellers are fair game when the time comes.
ReplyDeleteWe need to go back to what the early American colonies did have "script" or local currency.
ReplyDeleteTake the Federal Reserve and Banks out of our life and we can do that by ourself do not even need Congress and an Audit of the Federal Reserve just need everyone to organize and work together.
We just walk away from their rigged game.