As part of their plan to privatize government, the state of South Carolina has contracted with Bank of America to administer its unemployment benefits. The unemployed are required to use a Bank of America prepaid debit card on which the state deposits funds.
However, to withdraw those funds from ATMs can cost up to five dollars per transaction.
Forty-one states have contracted with Bank of America, Wells Fargo, JP Morgan Chase, and other banks to provide access to public benefits, allowing them to collect unlimited fees, both from the unemployed and state governments.
Millions of jobless Americans have little choice, but to rely on the bank’s prepaid debit cards to collect their monthly benefits.
U.S. Bancorp made $357 million in revenue from its unemployment benefit card division, while JP Morgan made $5.47 billion in net revenue for most of last year from food stamp cards.
South Carolina pays Bank of America a fee for each transfer it facilitates on a debit card, and for handling direct deposit of unemployment benefits.
In addition to these fees, the New York Times reports that BofA customers can be charged $1.50 for speaking to a customer service operator more than once a month, $1.50 for using an “out-of-network” ATM, and $0.50 for entering the wrong PIN number too many times.