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Jobless hit with bank fees on benefits
By CHRISTOPHER LEONARD, AP Business Writer Christopher Leonard, Ap Business Writer 2 hrs 52 mins ago

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., JP Morgan 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.

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.

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

Steven Adamske, spokesman for the U.S. House Financial Services Committee, said he wasn't aware of the debit card programs before he was contacted by the AP, but was concerned about card holder fees.

"Our hope ... would be that banks who are getting federal assistance would forgo these kinds of fees as we're trying to help everyone in society deal with this recession," Adamske said.

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 percent 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.

But the potential is clear.

In Missouri, for instance, 94,883 people claimed unemployment benefits through debit cards from Central Bank. Analysts say a recipient uses a card an average of six to 10 times a month. If each cardholder makes three withdrawals at an out-of-network ATM, at a fee of $1.75, the bank would collect nearly $500,000. If half of the cardholders also dial customer service three times in any given week (the first time is free; after that, it's 25 cents a call), the bank's revenue would jump to more than $521,000. That would yield $6.3 million a year.

Rachel Storch, a Democratic state representative, received a wave of complaints about the fees from autoworkers laid off from a suburban St. Louis Chrysler plant. She recently urged Gov. Jay Nixon to review the state's contract with Central Bank with an eye toward reducing the fees.

"I think the contract is unfair and potentially illegal to unemployment recipients," she said.

Central Bank did not return two messages seeking comment.

Glenn Campbell, a spokesman for Rep. Russ Carnahan, D-Mo., said the congressman would support a review of the debit card programs nationwide.

Another 10 states — including the unemployment hot spots of California, Florida and South Carolina — are considering such programs or have signed contracts. The remainder still use traditional checks or direct deposit.

With the national unemployment rate now at 7.6 percent, the..........................http://news.yahoo.com/s/ap/20090220/ap_on_bi_ge/bank_fees_jobless_benefits

So we, the taxpayers, bail out the banks for making poor banking decisions, and they actually charge people to use their unemployment debit card?

I know that they also have the option to have their unemployment checks deposited right into their accounts....at no charge. That would be the way to do it and forget about the unemployment debit cards.

USURY----

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Main Entry: usu·ry  
Pronunciation: \ˈyü-zhə-rē, ˈyüzh-rē\
Function: noun
Inflected Form(s): plural usu·ries
Etymology: Middle English usurie, from Anglo-French, from Medieval Latin usuria, alteration of Latin usura, from usus, past participle of uti to use
Date: 14th century
1archaic : interest
2: the lending of money with an interest charge for its use ; especially : the lending of money at exorbitant interest rates
3: an unconscionable or exorbitant rate or amount of interest ; specifically : interest in excess of a legal rate charged to a borrower for the use of money

EXTORTION---

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Main Entry: ex·tor·tion  
Pronunciation: \ik-ˈstȯr-shən\
Function: noun
Date: 14th century
1: the act or practice of extorting especially money or other property ; especially : the offense committed by an official engaging in such practice
2: something extorted ; especially : a gross overcharge
— ex·tor·tion·er  \-sh(ə-)nər\ noun
— ex·tor·tion·ist  \-sh(ə-)nist\ noun

what a tough decision this is.......who are the gangsta's here??????

It is so freakin easy to avoid those fees.  But you got these whining people saying they don't want to get a bank account, then they complain.  Now take Rotterdam area for example.  On Altamont Ave alone you have Pioneer, Trustco (gee, two branches), Citizens Bank and a Bank of America.  Have I forgotten any?  BOA doesn't have really good hours, I don't know about Citizens, but Trustco I think is open til 6 on Wed Thurs and Fri.  Pioneer is open til 8 pm every weeknight AND til 4 on Saturdays.  

By at the same time, you can go to these locations 24/7 and use your bank card AT NO COST WHATSOEVER!.  

And using this area as an example, think of shopping at Walmart or Hannaford.  Complain about the AT fee because you are too lazy to walk a FEW FEET to use your Pioneer bank card at the Pioneer ATM vestibule.  

I'll tell you, truthfully, I don't think we have paid bank fees more than three times in a typical calendar year.  That perhaps might be the machine at Pioneer is not working, or, we are shopping at Crossgates and you stumble upon an incredible sale but you don't have enough cash so you can either drive to a Pioneer and back or you can use the ATM.  I'm not trying to push Pioneer, but I do like their hours.  I can still do the same if I go to Bank of America and have a bank account there and to go their own building with their own AT from my bank account.

While there is much to blame the government and banks for, there is blame to go around for the people too lazy to go to their own bank

the governmnt needs to take over all of those there banks and get the gas companies too so that it protects the people. Over there on the other side we have the companies run by the government and they a good job so it can be better here if did it like that over there THIS SHOULD NOT BE HAPPENING NO FEES AT ALL AND IT SHOULD BE FREE

It's the next generation with the use of these cards and how the next generation has learned to use $$.....$$ doesn't exist anymore and soon will
disappear.....who has direct deposit??? who uses credit cards?? who pays online??.........it will be attached to our RealID soon enough.....the 'fees'
collected(via extortion) will be setting up the system......we are just the cogs........

regardless of how many banks there are-----EVERYONE likes one stop shop.........the easy way is always the right way....and dont forget America's favorite
---"have it your way"......

Sal, I'm sure you are being sarcastic, right?

No Sal is not kidding, Sal is a good comrade.

I have to agree with ya MC. Just cash it in at the bank or get it direct deposited. I personally believe that the banks are wrong in charging them, but this is something people can avoid....if ya just use your brains!

Quoted from bumblethru

I have to agree with ya MC. Just cash it in at the bank or get it direct deposited. I personally believe that the banks are wrong in charging them, but this is something people can avoid....if ya just use your brains!

it can never be avoided any longer.....direct deposit it will be.....fees and all.....it's a 'reverse sanction'.....press the sheeple to pay
for services 'outside' the system changes and the sheeple will always go to the cheap,,,,,is it worth a fight? let's see how we
organize and dump the 'tea' into the river........

realID/real Immigration/ATM/Realbio info/real national healthcare/etc cards.........can you say;"how many credits do I have?"