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Chase bank charges fees to use unemployment debit cards


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Trimming the costs of governance isn’t inherently a bad thing, but charging the unemployed fees to access their account information probably isn’t the best way for the state to save money.

However, that’s exactly what happened when Rhode Island outsourced the management of unemployment fund accounts to JP Morgan Chase in 2007.

“JPMorgan Chase agreed to operate the system at no cost to the state – if it could charge fees to those receiving unemployment benefits,” reports David Klepper of the Associated Press.

About 35 percent of the 41,000 Rhode Islanders on unemployment use what’s called an Electronic Payment Card to access their benefits. Ostensibly, these would be the people that are so poor they don’t even have a bank account. But Laura Hart, a spokesperson for the state Department of Labor and Training said others on unemployment “may appreciate the convenience of the EPC format.”

Or they may not, once they consider the fees JP Morgan Chase charges to use the service: a $.50 fee to check your balance; $1.50 to withdraw funds more than once per week; $3 for using a bank out of the system.

“The fees shift the cost from state governments to the consumer,” Lauren Saunders, a lawyer with the National Consumer Law Center, told Klepper.”These are people living on thin margins already.”

While Rhode Island isn’t the only state to outsource these costs – at least 40 other state do, according to the AP – the state senate last week voted to have the governor review the fees Morgan is charging.

The bill, if passed, would require that all fees for using the debit card be stated on the card itself. It was sponsored by Sen. William Walaska and Erin Lynch, both Warwick Democrats.

Currently, according to Hart, cardholders are given “literature” that explains the fees. “Additionally,” she said in an email, “DLT produced an information video about avoiding EPC fees” that is on the DLT website.

She also said that “most” fees associated with the EPC cards can be avoided.

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Why do Big Banks care about Charter Schools?

Why Does JP MORGAN CHASE want to create a $325 million fund to invest in charter schools?  Because they can make money off of them silly.

JPMorgan Chase Creates $325 Million Funding Initiative For High-Performing Charter Schools$50 Million in Grants Crucial Amidst Challenging Credit Markets

New York, May 4, 2010 – JPMorgan Chase announced today a $325 million initiative to support the growth of high-performing U.S. charter schools in today’s challenging credit environment.

“Many charter schools have expanded access to academic opportunities for students in all types of communities, so we shouldn’t let tough economic times bring them down,” said JPMorgan Chase Chairman and CEO Jamie Dimon. “Improving educational opportunities is a cornerstone of JPMorgan Chase’s philanthropic giving.”

The bank will provide $50 million in grants to community development financial institutions (CDFIs) focused on funding charter schools. In turn, these institutions will use these grants as permanent equity, which they will leverage to fund top-performing charter schools.

Additionally, JPMorgan Chase will work with the CDFIs to provide about $175 million in debt and approximately $100 million in New Markets Tax Credit equity to support the development of charter school facilities. This will allow the CDFIs to access Obama Administration financing programs designed to help charter schools meet facility needs.

JPMorgan Chase estimates that this initiative will help underwrite about 40 charter schools, which will serve more than 50,000 students throughout the term of the loan.

Initial CDFI partners include The Reinvestment Fund of Philadelphia, The Low Income Investment Fund of San Francisco, and NCB Capital Impact of Arlington, Va. Additional partners will be announced later in the year.

“The Low Income Investment Fund (LIIF) is proud to be one of the partners with JPMorgan Chase on this initiative. Through this financing initiative, JPMorgan Chase and LIIF will invest in exceptional educational opportunities for thousands of low income students,” noted Nancy O. Andrews, President and CEO of LIIF. “A key constraint to growth for many high performing public charter schools is their ability to finance facility development or enhancement. By providing an equity investment, JPMorgan Chase and LIIF will give schools access to affordable capital in a difficult credit environment.”

The grants to help charter schools are part of JPMorgan Chase’s larger $100 million grant initiative for CDFIs that also support small businesses, community healthcare centers, green initiatives and affordable housing. Details on the rest of the initiative will be announced later this year.

“JPMorgan Chase has been a committed partner to the CDFI industry by providing critical access to capital where it otherwise might not exist,” said Terry Simonette, President and CEO of NCB Capital Impact. “This new initiative continues that commitment by providing the critical capital that is required for charter schools to meet the need for access to quality education in low income and underserved communities.”

Despite the increasing demand by families across the country for charter schools, they have found it difficult to arrange financing for expanded and new facilities.

While public school districts can access the municipal bond market for long-term funding, charter schools almost always pay more for financing because lenders require higher interest rates from the relatively new industry.

“In these next seven years, this new investment by JPMorgan Chase in The Reinvestment Fund projects will allow us to create school opportunities for thousands of students,” said Jeremy Nowak, President and CEO of The Reinvestment Fund. “This major investment certainly positions the bank as a national leader supporting charter schools and meeting their significant unmet financial needs.”

JPMorgan Chase sees high potential for improving childhood education and community development through charter schools, and is committed to their development. The bank has been an active supporter of public school education, donating $181 million in education grants over the last five years. Additionally, the bank provided nearly $12 billion in financing to education institutions and school districts through lending and bond underwriting in 2009 alone.

Community development financial institutions that fund charter schools and are interested in applying for a grant through this new program should contact JPMorgan Chase at CharterSchools.CDFI@jpmchase.com.

About JPMorgan Chase
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.1 trillion and operations in more than 60 countries. The firm is a leader in investment banking, financial services for consumers, small business and commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.