Republicans Out To Screw The Poor On Pre-Paid Debit Cards

Republicans Out To Screw The Poor On Pre-Paid Debit Cards

Republican legislators are looking to repeal a rule that would primarily affect one company in Georgia. Needless to say the effort is being spearheaded by a Georgia GOP Senator, David Purdue, and a Georgia Congressman, Tom Graves. The American Prospect reports:

The CFPB rule, scheduled to take effect in October, would provide safeguards for those who use prepaid cards, which are similar to debit cards but are preloaded with a designated amount of money by the cardholder. The rule would require providers to disclose hidden fees and protect against loss, theft, and unauthorized charges. The rule would also force prepaid-card companies to limit overdraft fees.

NetSpend, a division of the Georgia-based Total System Services (TSYS), is the only major provider of prepaid cards that has overdraft fees and, as such, is the biggest apparent beneficiary of the GOP move. The prepaid-card provider, which has lambasted the rule as “onerous,” announced in an October earnings call that it expected to lose $80 million to $85 million each year in overdraft fees, comprising 10 percent to 12 percent of its current revenue, as a result of the CFPB rule.

“It is outrageous that Congress may block basic fraud protections on prepaid cards so that NetSpend can keep gouging struggling families with overdraft fees that have no place on prepaid cards,” Lauren Saunders, associate director of the National Consumer Law Center (NCLC), said in a statement.

I don't have to tell you that Total Systems Services gave $117,000 to Congressional re-election campaigns last year, 70% of it to Republican candidates.

Thanks, Citizens United! Money is speech, and money gets you permission to screw poor people and those without bank accounts.

The Pew Charitable Trust reports that these pre-paid debit card companies often charge "an initial fee to purchase, subsequent fees for reloading funds, monthly fees, a replacement fee for lost cards, a fee to use ATMs, and a fee to call customer service. " That's right, a fee to call their 800 number and ask for help. This isn't a business, it's a racket, and it needs regulation to prevent the racket from hurting consumers.


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But don't count on the government protecting you from racketeers when Republicans get in power.

And maybe we should get the word out that NetSpend cards are a rip-off and that they pay Republican Congressman to remain that way.

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