In the latest truth is stranger than fiction story, sweetheart deals between states and banks have translated to increased fees for people on unemployment.
So this is the scenario, if you want your unemployment money, you have to either take a lump sum at the teller window or use a debit card. Using the debit card translates to $6+ dollars for every ATM transaction, and $20+ for any overdraft.
"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.
That $6 is a lot when you're worried about paying for rent, heat, and food for your family.
Of course, the banks have cast themselves as heroes, offering convenience at a reasonable price. But can you think of anything more loathesome than profiting at someone else's despair?
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.
Woo hoo! Let's make a profit off all those schmos who have lost their jobs!
With the national unemployment rate now at 7.6 percent, the market for bank-issued unemployment cards is booming. In 2003, states paid only $4 million of unemployment insurance through debit cards. By 2007, it had ballooned to $2.8 billion, and by 2010 it will likely rise to $10.5 billion, according to a study conducted by Mercator Advisory Group, a financial industry consulting firm.
In the next few years I think "banker" is going to become a swear word akin to "m-f", meaning dirty thief.
I sincerely hope the executives of those banks are on the AIG tax cheat list. They need some comeuppance, pronto.