Public Comment

EDD & Bof A: Further Thoughts

By Steve Nadel
Wednesday August 31, 2011 - 04:43:00 PM

I believe Gar Smith has missed some major issues regarding this controversy over B of A/EDD relations. As with the previous respondent, I found it quick, easy & painless to bypass B of A completely and have the funds transferred to my private account. For the unemployed who have their bank accounts & internet access this is really not an issue. B of A won't make a penny off such people. 

So in thinking this through as to why EDD went to this trouble, one major thought occurred to me that has been absent from the discussion. What about those without bank accounts and easy internet access??? We've all read the articles (& seen the sleazy establishments around the "right" neighborhoods) regarding exploitation of low-income families by check cashing firms. Are such families forced to pay an exorbitant portion of their unemployment check to get it cashed? Is EDD trying to solve this problem by providing the debit cards?? 

I believe this issue needs to be seen in this broader light - why is EDD forced to go through a bank such as B of A to distribute such cards (really, the only other alternative would have been Wells Fargo, for whom I assume Gar would have written a similar article.) This raises the broader debate regarding whether state funds should be stored, distributed etc through a state owned/managed bank rather than a private institution. 

If you look further on the EDD site, you will also find much more detailed information regarding how to avoid paying any fees to B of A. I think Gar also missed a significant way B of A will make money off these cards. If they are really used as EDD encourages, to enable those without bank accounts to enjoy 21st century access to paying grocery, gas and other daily bills with ATM/debit cards rather than cash - then B of A can collect the standard fees from retailers for each swipe of the card. While this costs the unemployed nothing extra (like the rest of us they already pay via the retailers incorporating this cost into their pricing) I assume over time and numbers B of A will make a profit here. Again this raises the debate should California run its own bank to provide such services on a non-profit basis. 

I also have to leave with one final comment. One reason it is important to place this issue in broader debate is the current vicious attack on public employees as the source of all our current fiscal woes. My experience with ground level employees at EDD has been that of public employees attempting to provide needed services - get the unemployed the funds they are due as quickly and easily as possible. In this light, did EDD try to solve a real problem within the constraints they are forced to work with - needing to go through a private bank? Who is the real culprit here - the workers at EDD or the politicians pushing privatization of all government services?