Overdraft Bank Fees Lawsuit

States Save Unemployed Workers Millions By Reducing Prepaid Debit Card Fees.

But Some States Still Violate Federal Law by Refusing to Offer Direct


 the full report, including rating and fees charts for each
state: http://www.nclc.org/issues/unemployment-compensation-prepaid-cards.html

WASHINGTON, Jan. 29, 2013 /PRNewswire-USNewswire/ — Improvements in
state unemployment
tr.v. pre·paid, pre·pay·ing, pre·pays
To pay or pay for beforehand.

pre·payment n.
 cards are saving unemployed workers millions
in fees,
according to

1. As stated or indicated by; on the authority of:

2. In keeping with:

 a new survey by the National Consumer Law Center
(NCLC). But some states still refuse to offer their workers the choice
of direct deposit of their benefits to their own bank account and force
them to use a prepaid card. The NCLC 2013 Survey of Unemployment Prepaid
Cards includes a new review of direct deposit rates and updates fee
schedule changes since the advocacy organization’s initial
groundbreaking 2011 report that found many cards were nickel-and-diming
workers through multiple fees.

“Five states–California, Indiana, Kansas, Maryland and
Nevada–are violating federal law and requiring workers to receive
benefits on the state vendor’s prepaid card, without letting
workers sign up for direct deposit to their own bank account,” said
Lauren Saunders, managing attorney at NCLC and an author of the report.
States also vary in how easy they make it to sign up for direct deposit.
Minnesota has the highest direct deposit rate at 82%, and Arizona’s
is the lowest at 16%. Some states encourage direct deposit as the first
choice. Others automatically enroll workers in the prepaid card,
requiring them to go to extra effort to disenroll to select direct

“Overall, 18 states have improved their unemployment prepaid
cards by reducing fees for ATM withdrawals, balance inquiries,
purchases, and other transactions,” Saunders said. “We now
give 18 out of the 42 state cards a ‘thumbs up’ and only 3
cards a ‘thumbs down.'” In 2011, 8 cards out of 40
merited a positive rating and 16 were negative.

U.S. Bank, the only bank that had
 fees in the last survey,
has eliminated them. “With overdraft fees gone, all of the U.S.
Bank unemployment cards now get ‘thumbs up’ as a safe and
convenient way for workers to receive their benefits with minimal
fees,” noted Saunders. For workers who do use a prepaid card, other
fees are down considerably.

And, by following several recommendations in NCLC’s 2011
report, the Pennsylvania unemployment prepaid card now ranks as one of
the best in the country. “Pennsylvania projects that it will save
unemployed workers in that state more than $5 million,” said
Saunders. “We looked to the National Consumer Law Center’s
leadership and their easy-to-reference report when it came time to build
a better program in Pennsylvania and it was a great resource,”
Pennsylvania Treasurer Rob McCord said. “The National Consumer Law
Center report informed us about the practices of other states and
identified areas where we could improve.”

Even well-designed prepaid cards impose costs on workers, though the
price is likely lower than the cost of cashing paper checks. In
California, which continues to have the best card in the NCLC survey,
workers paid nearly $1.8 million in fees in the past year, not including
ATM surcharges. “A well-designed prepaid card is safer, cheaper,
and more convenient than paying to cash a paper check,” Saunders
explained, “but it is no substitute for direct deposit to an
account of your own choosing.”

The 2013 survey also includes a national overview of fees on
unemployment prepaid cards; state-by-state highlights of fees and
ratings (for 2013 and 2011); data on the percent of workers in each
state who receive their unemployment benefits by direct deposit, a
prepaid card, or by check; and highlights of the changes that
Pennsylvania made to improve its card and eliminate $5.2 million in

Since 1969, the

 National Consumer Law Center (NCLC) has
used its expertise in consumer law and energy policy to work for
consumer justice and economic security for low-income and other
disadvantaged people, including older adults, in the
United States
 officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world’s third largest country in population and the fourth largest country in area.
NCLC’s expertise includes policy analysis and advocacy; consumer
law and energy publications;

; expert witness services, and
training and advice for advocates. NCLC works with nonprofit and

 n. the work performed by a lawyer for a client.
 organizations, private attorneys, policymakers, and federal and
state government and courts across the nation to stop exploitive
practices, help financially stressed families build and retain wealth,
and advance economic fairness.

SOURCE National Consumer Law Center