Comments on: California’s unemployment debit cards http://blogs.reuters.com/felix-salmon/2011/11/17/californias-unemployment-debit-cards/ A slice of lime in the soda Sun, 26 Oct 2014 19:05:02 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: 1AngryAmerican http://blogs.reuters.com/felix-salmon/2011/11/17/californias-unemployment-debit-cards/comment-page-1/#comment-33269 Sun, 20 Nov 2011 18:25:55 +0000 http://blogs.reuters.com/felix-salmon/?p=11148#comment-33269 A government bureaucracy in bed with a bank that got massive bail outs from taxpayers??? Who’d a thunk it. LOL!

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By: djseattle http://blogs.reuters.com/felix-salmon/2011/11/17/californias-unemployment-debit-cards/comment-page-1/#comment-33238 Fri, 18 Nov 2011 20:45:56 +0000 http://blogs.reuters.com/felix-salmon/?p=11148#comment-33238 Felix, thanks for shining some light on this topic. While the issue is technical and the sums involved modest, it is disturbingly sympomatic. The current reflex position of government, whether local, state, or federal, seems to be to align its policies with the interests of major institutional players rather than its own citizens.

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.

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By: ABT http://blogs.reuters.com/felix-salmon/2011/11/17/californias-unemployment-debit-cards/comment-page-1/#comment-33216 Fri, 18 Nov 2011 09:18:42 +0000 http://blogs.reuters.com/felix-salmon/?p=11148#comment-33216 It can’t be that difficult to setup, even the UK job centre, not exactly known for its efficiency, has been doing this for years. In fact they actively encourage you to sign up for the direct debit payment option.

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.

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By: Frwip http://blogs.reuters.com/felix-salmon/2011/11/17/californias-unemployment-debit-cards/comment-page-1/#comment-33212 Fri, 18 Nov 2011 02:17:00 +0000 http://blogs.reuters.com/felix-salmon/?p=11148#comment-33212 Or even better, California could set up its own state bank like the Bank of North Dakota.

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.

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By: absinthe http://blogs.reuters.com/felix-salmon/2011/11/17/californias-unemployment-debit-cards/comment-page-1/#comment-33211 Fri, 18 Nov 2011 01:59:42 +0000 http://blogs.reuters.com/felix-salmon/?p=11148#comment-33211 I’m curious about how the revenue split between CA and BoA was determined. If that came out of a competitive process, I’d like to think that BoA isn’t netting much out of this. That leaves a (presumably) minor inefficiency from the card program, and the distributive effect of the transfers from the less savvy banked unemployed to the taxpayers of CA. The distribution can be (mostly) countered by slightly raising unemployment payments, leaving small transfers from the unsavvy banked to the unbanked and savvy banked. I won’t lose any sleep from that.

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.

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