JP Morgan Chase Nickel and Diming the Last Nickels and Dimes from the Unemployed

The National Consumer Law Center just released a report on something that’s been a pet peeve of mine for some years: states’ increasing reliance on pre-paid cards to distribute unemployment compensation, rather than checks. (h/t Susie) As the report explains, issuing funds via a card is much cheaper for the states. But what’s really happening is that unemployment recipients end up paying for the cards out of series of fees the banks issuing the cards charge (which violates the law that says administrative costs should not come out of benefits).

The report spells out in detail how banks are screwing unemployment recipients in which state:

  • US Bank refusing to let AR post its fee schedule
  • PNC requiring recipients to work with customer service to transfer fees to their own bank account in IN
  • Chase charging $1 for the very first in-network ATM withdrawal in TN
  • Chase charging $2.75 for out-of-network ATM withdrawals in WV, even in areas without convenient access to a Chase branch
  • Chase charging $.25 for cash back with a purchase in TN and RI
  • Chase charging $.10 for every point-of-service use after the second one in CO
  • Chase charging $.25 for PIN transactions in ME and TN
  • US Bank charging $20 overdraft fees (on pre-paid cards!) in AR
  • Chase charging $1.50 for denied transactions in MI and WV
  • Chase charging $.50 to check a balance and $1 for insufficient funds in RI
  • Regions Bank charging a $2.50 90-day inactivity fee in AL
  • Chase charging $12.50 to issue a check to close out an account in CO and CT

Check out this state-by-state summary to see what your state’s card charges and how that compares with other states.

This list, of course, demonstrates another thing: Chase’s significant role in the market (it serves 13 of the 40 states that use pre-paid cards) and–aside from US Bank’s egregious overdraft fees–its use of the most abusive practices.

That’s notable because Chase’s parent company–and its CEO, Jamie Dimon–is also taking the lead in threatening to cut off poorer consumers because the government wants to limit what debit card issuers like Chase can charge merchants.

Bank executives have said they will raise their fees to compensate for losing debit card processing revenues.They predict that some people will be unable to afford the fees, forcing them out of the banking system into the realm of check cashers and payday lenders.

The term that the banks use for this is “unbanked.” The rules “will have the adverse consequences of making a portion of current bank clients unbanked.

You will not be able to profitably serve them,” Dimon told analysts during the bank’s fourth-quarter earnings conference call Friday.

About 5 percent of today’s banking customers “may be pushed out of the banking system,” he said.

You see the nice trap Dimon is setting for those who don’t profit mightily by sucking at the federal teat, like his bank does? Unbanked consumers are precisely those who, if they receive unemployment, will rely on these cards and have to pay their usurious fees. So after forcing them out of the banking system because JP Morgan refuses to cut its escalating profits in response to Dodd-Frank, JP Morgan will still profit off these people by nickel and diming them at the time they can least afford to be nickel and dimed.

  1. JohnLopresti says:

    I thought the government avoided double taxation, similarly. During the Reagan administration congress instituted a tax on unemployment insurance (UI) payments. The UI fund, as I understand it, is comprised of federal monies basically consisting of mandated payroll deductions, which are supplemented as well by the employer*s own contributions to the fund once an ex-employee begins a UI claim. So the fund essentially is made up of taxes or levies on the employer, and taxes on the employee; plus a state-specific matching contribution of some proportion. I suppose the next step is the TeaBagger party*s inventing the idea that this resembles too closely the cluster of issues of which taxation without representation was a prominent complaint in the colonies; and, so, UI as a program ought to be discontinued, or privatized. I can hear the Republican reactionaries in the primary season rehearsing already; privatize UI; privatize SS. Maybe Cerberus is concocting a new bailout fund for those very purposes; and maybe Chase and wildly profitable outfits like BofA might be interested in securitizing some of these noble new ventures. It would be difficult to imagine right to work states voters consciously casting a ballot for those sorts of privatization schemes. Perhaps SarahP+ is preparing a debut speech to convince the unemployed she has seen the future and it is privatized. Drill, baby, drill. Export water, baby, export water. And forget the pesky ESA.
    + The linked article describes the honorarium for the SarahP speech at the small campus* sports arena dedication as $115,000.

  2. mzchief says:

    The bankstas must, must, must have their cut or 2 or 3 of *every* transaction.

    IMO, here’s another banksta US job- and accountability- killing “solution”:

    But Visa and its rivals, including MasterCard Inc, American Express Co and Discover Financial Services, are also trying to figure out ways for people to buy things with their phones in physical stores. McCarthy said that a previous, separate Visa pilot to test smartphone payments with Bank of America Corp and other large U.S. banks will be commercially available this summer.

    (excerpt from “VISA launching ‘digital wallet’ for U.S. banks,” RawStory.Com, May 12, 2011)

  3. fatster says:

    And into all of this steps . . . wait for it . . . Jellyfish Intelligence Inc.

    Former Blackwater officials form corporate spying group

    “The people that operated Blackwater and the military’s pre-9/11 data mining operation Able Danger have a new project: corporate spying services for Fortune 500 companies.

    “Their new company is called Jellyfish Intelligence.”


    Somebody pls tell me this is from The Onion.

  4. fatster says:

    Remember Sergay (the way they originally spelled it when his story broke) in whom I was so interested, klynn? Well, they eventually got Sergey and he apparently kept his mouth shut (darn!), but I figure he’d do well to consider a job with JI once he’s put in his eight.

    • klynn says:

      Man, you were spot on…As I recall, I think I thought so when you brought it to our attention.

      You should write a post about that link. Absolutely not-so-good for our country to have such corp crap happen. Our GS ties are so tight, that could be a take down of our country beyond imagination.

      Looks like JI will end up a domestic terrorist.

  5. earlofhuntingdon says:

    Corporate theft is no longer a punishable exception. When the titans of industry do it, and proudly, it is the norm.

    By all means, let us give them free corporate speech on par with citizens so that they can defend their robbery as just another routine business practice, and purchase a government that will echo their sentiment. Were Charles Dickens to come alive after 150 years and be transplanted to the blog world, he would find as many or more wrongs to write about. Humbug, indeed.

  6. earlofhuntingdon says:

    Stealing the last few dollars of the poor is nothing new, though banks constantly imagineer new ways to do it. Punitive is the defining characteristic of their business models across the board, from how they administer aid to the poor for states too stupid or reckless to inquire further, to routine maladministration of checking account payments to home foreclosures.

      • earlofhuntingdon says:

        According to Wiki, it’s a portmanteau of imagine and engineering, first used by Alcoa in 1940. Popularized by Disney, it’s also used by s/w and video games companies.

        • earlofhuntingdon says:

          Put whiskers and ears on anything and it looks like Disney. As I said @22, it doesn’t appear to be a Disney-coined term, though it has tried to appropriate it.

  7. Shoto says:

    This list, of course, demonstrates another thing: Chase’s significant role in the market (it serves 13 of the 40 states that use pre-paid cards) and–aside from US Bank’s egregious overdraft fees–its use of the most abusive practices.

    It doesn’t give me great comfort to know that the current WH COS is a former (Former? Hahahaha!) “Executive Committee” member with Morgan-Chase. How much more egregious with a staff pick can a President get, anyway?

    • emptywheel says:

      Though I did find it interesting that IL was one of the few states w/o a big multinational running their cards. That’s not necessarily a GOOD thing, mind you (Bank of America seems to offer the best card deals). Still … interesting.

      • mzchief says:

        From “Illinois National Bank Ribbon-Cutting Ceremony, Mt. Pulaski, IL. May 29, 2008” (photo):

        The First National Bank of Mt. Pulaski was founded in 1888 and celebrated its 100th anniversary in 1988. It It was acquired by Illinois National Bancorp of Springfield, Illinois, in January of this year.

        Note the Delaware incorporation.

        From “Patient kiosk wins Project Innovation top prize” (The State Journal-Register, By Chris Dettro, posted Jun 10, 2010, last update Jun 11, 2010) (my bold):

        A kiosk that allows a medical patient to register and update records more quickly has been awarded the $15,000 top prize in Project Innovation, a Sangamon County medical contest.

        Jardogs LLC, a Springfield Clinic-owned company, developed the patient kiosk, a biometric authentication device that is more accurate and faster than a fingerprint. It allows the patient to check into a health-care organization and update records much more quickly than traditional methods.

        { snip }

        Third-place award winners with prizes of $1,000 each are W. Allan Shears of Divernon, who invented the Pill Mill, an electrically powered pill crusher; Dr. Michael Schneider and Sae Hwang, both of Springfield, for Wikiphen, an online database that helps doctors diagnose inherited conditions; and Jack Milbourn of Springfield, a certified orthotist, who invented Tru-Balance, a shoe insert designed to reduce pain and correct problems connected with misalignment of the skeleton.

        { snip }

        The five finalists, chosen earlier from among 15 entries, presented their ideas to a panel of judges that included Bruce Sommer, Bluestem Ventures; Jason Wrone, Open Prairie Ventures; Amit Sudharshan, Illinois Ventures; and Tom Gihl, Q5 Advisory Board and Illinois National Bank.

        Project Innovation is supported by organizations including the Mid-Illinois Medical District, Q5, The Greater Springfield Chamber of Commerce, Southern Illinois University School of Medicine and Bluestem Ventures.

  8. Bluetoe2 says:

    “Nickel and diming” is Wall Streets version of frogs in a slowly simmering pot. The U.S. public, ever oblivious, won’t know what’s happened to them until it’s too late but then they’ll know Ashton Kutcher is not a suitable replacement for Charlie Sheen.

  9. revisionist says:

    Emptywheel… this isnt the real issue. The real issue is that you are TAXED – TAXED!!! – on unemployment. So basically you can lose a week of benefits to give the government back the welfare you need. UI should be TAX FREE. The taxes are a lot more than some 10 cent service charge.

    Personally, I had the debit card before my benefits expired. Never really had an issue with it. In fact it was a godsend at one point since my regular bank pulled some of the posting nonsense and created an overdraft. So making a deposit there would have eaten my much needed cash. I know others who were in the holes with their normal banks so having a debit card regardless of piddly fees is nice. My state added direct deposit finally

    • tejanarusa says:

      No, it’s a separate issue. If you already had a debit card to which your UI bens were then deposited, then you’re not talking about the same kind of debit card that EW is in this article.

      These are “special” “debit” cards. They have special rules and are used only for UI bens. And special fees. Of course, I don’t know for sure, but it seems unlikely that your pre-existing regular bank debit card was not subject to these outrageous fees.

      And they are outrageous, sucking money out of the minuscule, inadequate benefits people receive.

      Taxing UI is a completely separate issue. I’m old enough to remember when UI was not taxes. In fact, in the early ’80’s I found myself on a skiing trip with a staffer for a Republican senator who proposed taxing UI bens. She and I had quite a lively conversation about the immorality of such an idea. She of course was in her first post-college job and had no idea how hard it could be to live on UI alone.

      But, it didn’t really matter. I did not convince her. She and her boss were sort of forerunners to today’s Republicans. I got mine and you’re too poor to matter. So I’m gonna take away yours.

      • onitgoes says:

        Well one could argue that you pay Soc Sec before you pay taxes on it up front, which is how they “justify” paying taxes on it once you get it.

        But yeah: tax the sh*t outta the small peeps, but let’s all keep the upper 1% from paying anything close their fair share.

  10. BearCountry says:

    When it comes to the unemployed, I can only ask, “Is there no balm in Gilead?….” With all of the crooks in high places, they have no place to which they can turn for surcease of the constant oppression of the elite that are sucking the life from the nation!

  11. Crane-Station says:

    I had one of these cards once. It was last year. I needed a card in order to get a sandwich during a cross-country flight.

    It was a Chase pre-loaded Visa card.

    I was initially happy to have this card.

    I got a sandwich.

    Then I started getting calls.

    I was told that my “checking account” was overdrawn. I do not have a checking account.

    In fact, there is not a Chase bank within driving distance of me.

    I finally, in desperation, asked what it would take to divorce myself from Chase bank forever.

    The sandwich ended up costing me more than two hundred dollars in cash, that I had a very, very hard time putting together.

    They simply stole that money.

    Fuck Chase bank.

    • Crane-Station says:

      I should mention that I initially loaded twenty-five dollars onto the Chase card, and I ‘spent’ about fourteen of that at the airport and on the plane, if I remember correctly.

      I was not even close to ‘overdrawing’ the funds on this card.

      That was an expensive sandwich.

      i have to agree with Max Keiser on this one…

      • earlofhuntingdon says:

        Your facts suggest possible false advertising, failure to disclose hidden fees and charges, and possible violations of the Fair Credit and Debt Collections Practices Act. It’s certainly something to report to the state AG, BBB and state banking authorities. If your comfy with your facts, keep sending letters to Chase to get your money back; be sure to refute any alleged statements of fact you disagree with.

        • Crane-Station says:

          Thank you for your reply. I think they get away with crap like this by just wearing people down. Hours and hours and hours on the phone, on hold, getting transferred, getting nowhere, being quoted a different ‘amount due’ every time.

          I remember feeling like an animal…chewing his foot off to get loose from a trap.

          I was fed up and I was done. I was just out done.

          And, of course, this is exactly what they want. Probably very, very few poor people such as myself ever pursue that money once it is gone.

          My husband and I tried to figure out, at the time, how many others were being screwed at the same time we were being screwed. A lot, I’ll bet.

          Fortunately, when he received unemployment, there was no such card involved. But I wanted to say what happened with the card that I obtained nonetheless.

          ‘Nickels and dimes’ to thieving. bloodsucking banks amount to months and months of subsequent struggle and being in arrears for ‘us’ down here at the bottom.

          Stealing from the poor. Who does that?


          • earlofhuntingdon says:

            The context used to be that when a person makes a mistake, they made a mistake; when a computer makes a mistake, makes a mistake, makes a mistake…. Nowadays, however, “customer service” staff are profit centers, explicitly trained in stiffing customers out of illegal or improperly charged fees.

            The Right would have us believe that it is government regulation stifling businesses and leading to poorer profits and fewer jobs. As usual, the reality is different altogether. Government regulations can and ought to be what stand between customers and illegal and predatory business practices.

  12. workingclass says:

    Jamie Dimon got a piece of my unemployment benefits. Paid a tax on them also. There is no difference that I can see between J.P. Morgan and the U.S. Treasury. Throw in Goldman and the Fed and that’s pretty much the whole politburo.

  13. onitgoes says:

    Jamie Dimon is very adroit at wringing every lost drop of blood & removing every last pound of flesh he can from hapless citizens. Jamie Dimon is exhibit A, when one discusses today’s Gilded Age Robber Barons.

    Jamie Dimon is the kind of venal scum-sucking bottom dwelling Crook, who’d sell his first born & his grandma for a plug nickle without blinking an eye, that TeaParty types wish to venerate & kowtow to. Go figure. I sure can’t.

  14. OhioGringo says:

    I understand the Amish in Ohio and Pennsylvania can build beautiful and efficient guillotines if paid a reasonable fee…works of art, in fact.

  15. mzchief says:

    In the context of the thread, I thought this was a very interesting, almost gleeful statement:

    Corporations do not pay taxes..people do..Any tax that a corp pays is passed on to the consumer, period, end of story. You can play with the rhetoric and convince yourself otherwise, but that will never change the reality.
    ie: corps. should not be taxed. You tax the people who work in those corporations, you can tax the product, you can tax the purchasers, but you can never tax the corp.

    • onitgoes says:

      Yes, I saw that when it was blogged here… a big fat conservative lie that people here the RushSeanBillo set telling them every day. Why conservatives love to believe horsesh*t like this, along with absolutely reveling in the poo, is beyond me.

      I guess some citizens enjoy being gleeful about others’ trevails. As long as it’s not them, then it’s back to the standard: EFF You, I got MINE!

      Both nasty and short-sighted all at the same time.

      It is undeniably true that some of the corp’s expenses, which might include taxes, are passed onto consumers, but not all. Gimme a break. If a company is so rolling in dough like BigOIL, then there’s a huge problem with passing on every single “expense.”

      BigOil is counting a lot of stuff as “taxes,” including things like payroll tax, local fees, etc. It’s simply nonsensical, esp when you witness the gazillion dollar salaries/bonuses/stock options/etc that the CEOs bring home annually.

  16. wavpeac says:

    Here’s how it works…we had 3 of these stupid cards issued in our lovely state of NE over the last 8 years or so. It’s horribly criminal, and yes, you’d think you could do something about it, but it’s like the fees on my house. So, I was collecting child support when they started this program. They issued me the card for my child support. I was unemployed for three months and I got a card for that. My husband just lost his job and got a card for his unemployment. (union electrician). I can’t stop these cards. Not kidding. After the child support was over I went about my business. In January I got a new card, and it had late fees on it. No money but I owed 35.00$ for the new card. I called and said I didn’t want the card, didn’t ask for it, and don’t get child support anymore. They told me they could not discontinue the card without the state sending them a letter. You know what happened next don’t you?? I called the state. State says we sent a letter. Big story in the paper about this and all the poor people. My card finally disappears. Now we can’t get rid of the unemployment cards. Same deal. My guess is that the rigamaroll is so much that many do not follow through. The state says they sent the letter, the company says they never got it. Bank of the west. At any rate, I’ll be they make a healthy sum from the folks who just fork it over.

    Makes me really sick. It’s wrong. It’s stealing and no one cares…cause it’s just us poor folks who need cards.

  17. arcadesproject says:

    Stealing from unemployed people. Confirms suspicion that some people are capable of anything. Thank god our government is on our side and that these malefactors will soon be stopped and punished. (Not.)