Banks squeezing those last drops out of the unemployed

123008_money_bills_448x336You recognize the names.

Citgroup, Bank of America,  JP Morgan.

At least you should recognize them. Your tax money will be paying for their bailouts, and so will the tax money of your kids and their kids for many years to come.

Well guess what? They haven’t finished squeezing the last penny out of Americans, and the “leaders” of many states are helping them to do just that. Now they are taking advantage of people who have lost their jobs. These people are completely despicable. And so are the state  elected officials who are helping them at the expense of the unemployed.

For hundreds of thousands of workers losing their jobs during the recession, there’s a new twist to their financial pain: Even as they’re collecting unemployment benefits, they’re paying bank fees just to get access to their money

Thirty states have struck such deals with banks that include Citigroup Inc., Bank of America Corp., JPMorgan Chase and US 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.

“It’s a racket. It’s a scam,” said Rachel Davis, a 38-year-old dental technician from St. Louis who was laid off in October. Davis was given a MasterCard issued through Central Bank of Jefferson City and recently paid $6 to make two $40 withdrawals.

What we are looking at here is one more example of how our elected officials are more interested in lining the pockets of their contributors than they are in their consituents.

The fees are raising questions from lawmakers who just recently voted to infuse banks with taxpayer money to keep them afloat.

Rep. Carolyn Maloney, D-N.Y., a member of the House Financial Services Committee, said the situation points to “yet another example of how we need to regulate the ways in which banks charge overdraft and other fees.”

“Banks, particularly ones that have received federal help, should not be imposing endless fees and charges on the unemployed in this time of economic crisis,” said Maloney, who has written a bill to require that consumers be notified at the point of sale if they’re about to incur overdraft fees.

Some banks, depending on the agreement negotiated with each state, also make money on the interest they earn after the state deposits the money and before it’s spent. The banks and credit card companies also get roughly 1 to 3 percent off the top of each transaction made with the cards.

Neither banks nor credit card companies will say how much money they are making off the programs, or what proportion of the revenue comes from user versus merchant fees or interest. It’s difficult to estimate the profits because they depend on how often recipients use their cards and where they use them.

emtpt20pocketsYou know something? As much of a capitalist as I am, I am beginning to agree. Somebody needs to regulate these bastards in a big way.  They have shaken the tree and now they are checking the branches for any stray fruit. And the elected officials who are working with them in this case deserve to have their own asses kicked hard.

The economic stimulus plansigned by President Barack Obama this week will increase federal unemployment benefits by $40 billion this year. Subsequently, there will be more money from which banks can collect fees. The U.S. Department of Laborallows the fees as long as states create a way for recipients to get their money for free, spokeswoman Suzy Bohnert said.

“Beyond that, the individual decides how to manage his drawdowns using the debit card,” she said in an e-mail.

A typical contract looks like the agreement between Citigroup and the state of Kansas, which took effect in November. The state expects to save $300,000 a year by wiring payments to Citigroup instead of printing and mailing checks.

Citigroup’s bill to the state: zero. The bank collects its revenue from fees paid by merchants and the unemployed.

Disgusted?  Had enough of these pigs? Then call your Congress person and ask if your state is helping banks shove it up the noses of the unemployed.  If he or she says Yes, then tell him or her to do something about it from Congress. Now.  Then call your Governor’s office and tell your Governor what you think. Nobody……but NOBODY should be forced to use a fee-for-use debit card as a method of receiving their unemployment benefits.

7 Responses

  1. Well….cynically speaking, perhaps this is what the $25.00 per week increase in Florida Unemployment was for…

  2. “You know something? As much of a capitalist as I am, I am beginning to agree. Somebody needs to regulate these bastards in a big way. ”

    I think that is perfectly in line with capitalism. What we have just done, and will continue to do, by bailing them out is nowhere near capitalistic. I am allowed to do whatever I want with my money and my business’ money. However, when I sign a contract with a vendor, I lose a little bit of control b/c I must pay for what I bought. When I take out a loan, I lose some of my control and some of my ownership b/c I must pay it back. When I take out a mortgage, i sign papers saying I will keep an insurance policy, I will pay my property taxes, and I will send a check to the bank by the first of the month. I am officially regulated when I am debt to someone else. If they want to be captains of their own ships, they shouldn’t have taken the money.

  3. Banks have always taken advantage of the less fortunate. The depositors with the most money in their accounts have fees waived, get a higher interest rate on the money in their accounts and receive special favors and treatment like holding checks, calls regarding outstanding checks, no bouncing of checks, etc. Those least able to pay are charged fees for breathing.

  4. Uppity, Adam Smith (the original capitalist, preacher, and author of “Wealth of Nations” – not the newsreader one on TV) very much believed in restrictions and regulations to limit the GREED of selfish people!

  5. I believe any business that takes its own risk should make a profit. I do not believe employees should share in profit unless they share in the risk. What I DON’T believe in is the unbridled ability of a monopoly to hold a noose over their customers’ heads. What has happened in America is the customer is serving the banks now. In fact, this is the case in most utilities as well. You call your phone company, you’re crap. You call your cable company and you’re crap. You call the gas and electric company, you’re crap. You are not only crap but you are crap to some jerk in another country who can barely speak English and gets impatient with you because you can’t understand one word they are saying. SOME regulation is GOOD. DEREGULATIONG brings nothing but more bad treatment of customers and more nooses hanging over customers’ heads. DEREGULATION brings nothing but the ability to PICK WHICH COMPANY SCREWS YOU. IF you ask me, they Price Fix besides. I am pretty much sick and tired of seeing service go to hell and prices jacked up by arrogant companies who couldn’t care less about the people that do business with them. Customer service in America is completely GONE. If you or I tried that, we would be OUT of business.

    I have YET to see a dereg that benefitted the customer, with the exception of the cost of Long Distance calling. In all other cases, I’ve seen Competition arrive and the competition costs the same. The treatment is just as bad and there is never a break for the consumer.

    When it comes to banks and Insurance companies of all stripes, deregulation has shown us nothing except that they cannot be trusted to treat their customers well and fairly. I think we allowed both industries to get too big.

  6. Well said. Banking reform is long, long overdue.

  7. Hmmmm. Bank gettin’ too big for their britches… There is always time for a backlash.

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