orangeleader.com (Orange, Texas)

Top Stories

January 29, 2013

Report: States force jobless to pay needless fees

(Continued)

WASHINGTON —

The trouble, the new report says, is that many states make it difficult for people to sign up for direct deposit. The rate of people using direct deposit ranges from a national high of 82 percent in Minnesota to a low of 16 percent in Arizona, the report says.

Minnesota offers direct deposit to people when they apply for benefits, and allows them to change their payment method online or over the phone, the report says.

In Arizona, by contrast, people are automatically enrolled in the card program. After they receive the card, they must find a paper form, fill it out, and submit it by mail. There is no way to change payment methods online or over the phone.

"The difference in direct-deposit rates among states seems primarily due to how hard or easy the state makes it for workers to choose direct deposit," the report says.

In five states — California, Indiana, Kansas, Maryland and Nevada — unemployed people aren't offered direct deposit at all. The report says that setup is illegal under a federal law that bars states from requiring benefits recipients to open an account at a particular bank.

The federal government recommended in 2009 that people with bank accounts receive payments via direct deposit. Nearly four years later, the report says, "there is no excuse for any state not to be offering direct deposit as the first choice for payment of unemployment benefits."

Banks make more money when more people use the cards. In the past, some of their deals with states prevented states from offering direct deposit, or required states to promote the card program as a first option.

To cover the cost of issuing cards and running the programs, banks charge a plethora of fees, including charges for balance inquiries, phone calls to customer support, leaving an account inactive for a period of months, or making a purchase using a personal identification number.

Text Only
Top Stories
Hyperlocal Search
Premier Guide
Find a business

Walking Fingers
Maps, Menus, Store hours, Coupons, and more...
Premier Guide