Banks charge to withdraw unemployment benefits

As if being unemployed isn't enough of a headache, the Associated Press is reporting that Bank of America and other banks are charging the unemployed small fees to withdraw their unemployment benefits with a debit card set up between the bank and the state that administers the money.

The story reports how Arthur Santa-Maria was charged 50 cents for calling Bank of America to ask for the balance of his new unemployment benefits debit card. He took out some of the money (cha-ching, 50 cents), and then decided to pull out the rest (50 cents more), a $1.50 total for taking his money out.

Thirty states have struck deals with banks that include Citigroup Inc., Bank of America Corp., JP Morgan Chase and US Bancorp to give the unemployed debit cards. Some charge overdraft fees of up to $20.

While the banks wouldn't disclose how much they're making from these fees, the Associated Pres added up the potential fees in Missouri, for example, and found that a bank's revenue from these cards could be $6.3 million a year.

In Missouri, 94,883 people claimed unemployment benefits through debit cards from Central Bank. If someone uses a card an average of six to 10 times a month, including three withdrawals at an out-of-network ATM at a fee of $1.75, the bank would collect nearly $500,000. If half of the cardholders call customer service three times in any given week, the revenue would jump to $521,000.

I understand that the debit cards are helpful for people who don't have checking accounts, or have to go to a check-cashing company and pay high fees to cash a check, but has anyone heard of direct deposit? How difficult can it be to find a bank offering a free checking account? Direct deposit is one of the easiest things to sign up for if a state offers it.

Aaron Crowe is an unemployed journalist in the San Francisco Bay Area. Read about his job search at

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