There’s a story by Janell Ross of Huffington Post about Bank of America and what it is up to in South Carolina that reveals more of BofA’s usual corporate insensitivity; the article is also, however, as fine a picture of what life is often like for the 16 percent of Americans who now live in poverty as you’ll find in recent journalism. Ross’s story is one I wish everyone in Charlotte would read. Yes, I know everyone in Charlotte won’t read it, so that’s why I’m here to offer you the short version. Afterward, you can get the rest of the story, and check out Ross’s thorough, clear reporting and prose, by clicking here, if you so desire.
South Carolina has contracted with BofA to administer the state’s unemployment benefits; the funds are deposited by S.C. into recipients’ BofA prepaid debit card accounts. It’s a system that has worked well for BofA in other states, like California and New Jersey. Those states, however, included requirements in their contracts with the bank that allow users to make a number of free transactions at other banks’ ATMs. And since you can see what’s coming, I’ll get right to it:
Lots of small towns in S.C. don’t have Bank of America ATMs, and many unemployed South Carolinians are being hit with fees for using their hometown ATMs rather than driving 50 miles to a town that has a BofA machine handy. One woman told Ross that she has paid at least $350 in fees — just to access her own unemployment benefits.
When S.C. learned of the options that BofA gives people using its prepaid cards in other states, they asked for a change. Now, recipients of unemployment benefits in S.C. have unlimited free withdrawals at BofA machines, and one free withdrawal per week at other ATMs — a whole one free withdrawal per week — Wow, what generosity!
Bank of America, of course, officially says its prepaid debit cards are “a good deal for everyone . . . clients value the cost savings, and individuals appreciate the ability. . .,” blahblahblah. And as far as the government of S.C. is concerned, hey, it’s all good, since they’re saving on printing checks.
Here is a key take-away from Ross’ terrific story:
Bank of America [after their $5 per month debit card fee fiasco] has quietly continued to mine another source of fees: jobless people who depend upon the bank’s prepaid debit cards to tap their benefits. Bank of America and other financial firms — including U.S. Bank, Wells Fargo and JP Morgan Chase — have secured contracts to provide access to public benefits in 41 states . . .
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.
Kind of makes you proud to be a Charlottean, doesn’t it?
This article appears in Nov 8-14, 2011.
Some very valid points. I have a couple of push back questions. What were the other banking options in their town? Orangeburg Sc seems closer than Columbia to Cordova by say 45 miles John and plenty of bank options there . Why didnt you mention that?. A couple of strokes on the key board also tells me there is one grocery store in Cordova so reason tells me there probably are not a great number of other businesses in Cordova as well. The number one reason someone has that their state or federal benefit direct deposited is to avoid the time delay in having access to their much needed funds. The old way was mail then deposit was slower by two business days on average. My mother used that system for 15 plus years raising three of us and I guarantee she and anyone else would not to chose to go back to the slower older way getting that money in their hands.So the banks are providing a SERVICE and they are oh my god can you believe it they are gonna charge us for it? I’m not a fan of paying fees and do my best to avoid them by reading the diclosers and asking the bank what exactly do I need to do to avoid them. When you use another businesses resources and the time of their paid staff you shouldn’t pay for it? At least they tell you up front what to expect. Have you been to the doctors office lately ? You have no clue what your gonna be charged when you go there. The topic Bad Bad Bank is getting old folks. Buyer beware. Ask questions be responsible for your life . Dont have that sense of entitlement to expect something for nothing.
Its easy to be mad at the economy and we all want someone to blame or point a finger at . Yes I want the BofA to do well but so do many Charlotte families because the trickle down effect to whole community would be more than bad if they didn’t. John you got many things right some not so right and the way you lead the article down a narrow information filled STORY reminds me of the Wizard of Oz “pay no attention to the man behind the curtain”
YOU forgot to mention something, too, Mr. Alexander.
The unemployed person does not have a choice of whether or not to use the Bank of America card. They are being forced by the state government to become a Bank of America customer.