Wall Street banks fleecing unemployed Americans

Wall Street banks are charging unemployed people for access to their unemployment benefits.

When the bankers wonder – hmmm, why do so many people hate us? – they can add this to the list.

As if bailing out the irresponsible jerks who caused the recession, to the tune of $700 billion, wasn’t bad enough, the big banks are profiting from the unemployment that they caused. How thoughtful of them.

As offensive as this is, remember that it takes two to tango. None of this would be possible without the political class buying into this. Just as too many in the political class fell for the outrageously high pay for bailed out executives, they also approved these programs.

Wall Street

Wall Street via Shutterstock

The report by the National Consumer Law Center is ugly, but the story needs to be told. There’s no reason the bailed out banks should be profiting on the shoulders of the unemployed. Too many politicians from both parties buy into the theory that privatizing services makes sense, but it usually doesn’t. In this particular case, it’s sickening to see Wall Street once again cashing in on the chaos that they caused.

This offensive and it needs to stop.

Jobless Americans are paying millions in unnecessary fees to collect unemployment benefits because of state policies encouraging them to get the money through bank-issued payment cards, according to a new report from a consumer group….

Banks including JPMorgan Chase & Co., U.S. Bancorp and Bank of America Corp. seized on government payments as a business opportunity. They pitched card programs to states as a win-win: States would save millions in overhead costs because the cards would be issued for free. And people without bank accounts would avoid the big fees charged by storefront check cashers…. The bank-state partnerships effectively shifted the cost of distributing payments from governments to individuals.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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8 Responses to “Wall Street banks fleecing unemployed Americans”

  1. Sookari says:

    In 5 states unemployed people aren’t offered direct deposit at all.

  2. Guest says:

    In California, Indiana, Kansas, Maryland and Nevada unemployed people aren’t offered direct deposit at all.

  3. FunMe says:

    A friend of mine was unemployed in CA last year. What he did to avoid paying any fees was to have his check DIRECT DEPOSITED to his checking account. He then was able to get his money from his bank without ever having to pay the fees to Bank of America (who administers CA unemployment).

    “And people without bank accounts would avoid the big fees charged by storefront check cashers…. The bank-state partnerships effectively shifted the cost of distributing payments from governments to individuals.”

    Sounds like we need to find ways to help the unemployed without checking accounts to open up accounts.

    Those FREAKING banks will get their karma eventually. BAD karma.

  4. guest1 says:

    Im tired of the people on this blog complaining about banks, just makes me lol now. You guys supported the bailout, and the politicians responsible, and still continue to support the Fed.

  5. draftmama says:

    Community credit unions will allow people to open an account even if their only source of income is unemployment insurance – the monies are directly deposited and they can access the funds through a debit card or the cash machine without any cost. People just have to educate themselves if they don’t want to be fleeced.

  6. Naja pallida says:

    Indeed… but it just seems strange how we have successful programs, like SNAP, from which to take cues from for other programs. Of course, unemployment benefits are not the same, but there is still an example there of how to get government money directly to people who need it in an efficient way, and without a scam involved.

  7. nicho says:

    You do realize that you answered your own question. If they bypassed the banks, the banks couldn’t skim the cream.

  8. Naja pallida says:

    Can’t really fathom why they couldn’t use the same kind of card system they use for SNAP, TANF and refugee benefits, and bypass the banks entirely, while allowing people to do whatever they need with it. Whenever the banks are involved as the middle man, they always end up scamming the people involved, and then government gets the blame for the failure. Just look at the bullshit with student loans.

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