I know, I know, plus ca change… but the very pettiness of the examples seems to define a new low; there is apparently no pocket so thinly lined with change that B of A won’t stoop to suck a dime out of it. As for the state of California, during your interview did Ms. Reed ever claim that the number one reason for administering the program this way was because her department judged it the optimal structure for the average beneficiary? If she did not (and based on the evidence, I think she cannot) then she is not acting as a true fiduciary of the citizens and public monies in the trust of her department (an honorable bureaucrat) but rather as a functionary concerned only with particular chunks of revenue and budgetary turf (a bureaucratic hack). This the key difference between good and bad administration; and when the rot goes far enough, a system becomes insitutionally corrupt. Bribes don’t only flow through private pockets, they can flow via the public budget too.

As to the specific issue: I work for a mid-size private employer with about a thousand regular employees and a thousand indepedent contractors. All compensation payments are made via mandatory direct deposit, with an alternative freestanding “debit card” option (which charges a small monthly fee). B of A, as it happens, is the administrator. I regularly sign up independent contractors for their payment option and no one who as both arrangements explained to them ever elects the debit card. Absolutely no one. And the fee itself almost never comes into it. I have literally never signed up a contractor, let alone a regular employee, for one of these cards.

In the California example, you say that Bank of America will let you setup the direct deposit version but is that only with them? Or can you transfer the money off the prepaid card to another bank? As I could imagine it would be fairly useless if you banked with someone else, had all your direct debits for bills and credit cards setup there, and then found all your money at Bank of america.

http://banknd.nd.gov/

Then, it would be very easy for California to set up bare-bone banking accounts for the unbanked and run its own payment system at a very low cost.

But without going to such ‘extremes’, as I said as a comment to the first story, there is NO reason whatsoever why California unemployment benefits cannot piggy-back on the California FTB direct deposit system. It’s already there and the state uses it everyday.

So sorry for the paranoia, but this relation with BofA stinks.

Of course, if BoA is really raking it in, then that’s another matter. What’s the split? If it’s 50/50, I can imagine $10M being somewhat reasonable overhead for running this program.