Extra

An ordinary envelope, like many ads I get in the mail, arrived at my door. On opening it, here is a credit card with my name on it. Is this a scam? NO! It is my $600 stimulus money from Mr. Trump’s treasury department.

The five pages of enclosed instructions in English told me that I must call a number to activate it, I cannot give it to anyone else, that I can use it in an ATM, and fees will be charged for using it. It costs $5 for a Bank Teller Over-the-Counter Cash Withdrawal, plus $2 for ATM withdrawals and $.25 for a balance inquiry on an ATM that is not an ALLPOINT brand—whomever heard of that one?

And if you do not speak English,

“Translations of this Agreement that may have been provided are for your convenience only and may not accurately reflect the original English meaning. The meanings of terms, conditions, and representations herein are subject to definitions and interpretations in the English language.”

This appears to have been issued by MetaBank®,

“Your Economic Impact Payment Card (EIP Card) contains the money you are receiving under the COVID-related Tax Relief Act of 2020 or the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The EIP Card is sponsored by the U.S. Department of the Treasury Bureau of the Fiscal Service as part of the US Debit Card Program. Now that you’ve received your Card, here’s how to activate and start using it.”



Questions:

Who receives interest on the funds until the cards are cashed?

Who keeps the money that is not cashed?

Whose pockets were lined?

If you have a problem, you cannot sue but must go to arbitration.

What are your chances of winning in arbitration? Guess. 

From MetaBank’s Annual Report: 

“Completed negotiations with the U.S. Department of the Treasury's Bureau of the Fiscal Service ("Fiscal Service") to disperse a second round of Economic Income Payment ("EIP") stimulus payments through the distribution of prepaid cards. The Company began distributing cards under this authorization January 4, 2021. Total revenue for the first quarter was $111.5 million, an increase of 9% compared to $102.1 million for the same quarter in fiscal 2020.” 

The company’s revenue increased by $9.4 million in the first quarter of 2021. 

“EIP Program Update”  

“The Bank is serving as the sole Financial Agent for distributing prepaid debit cards used in the EIP program. The Company's Payments division, in collaboration with Fiserv and Visa, is proud to have provided a safe and secure mechanism for individuals, including the underbanked, to receive their stimulus payments. Under the first round of EIP, approximately $6.42 billion in stimulus payments on 3.6 million prepaid cards were mailed to individuals across the United States. The total balances remaining on the first round of EIP cards were $605.1 million as of December 31, 2020 and $569.2 million as of January 20, 2021. 

On December 27, 2020, the U.S. Congress, through the Consolidated Appropriations Act of 2021 (“CAA”), directed the Internal Revenue Service (“IRS”) to distribute a second round of EIP via the U.S. Treasury to persons in the U.S. eligible to receive them. The Bank entered into an amendment of its existing agreement with the U.S. Department of the Treasury’s Bureau of the Fiscal Service ("Fiscal Service"), under which the Bank will act as a Financial Agent to Fiscal Service in connection with the provision of prepaid debit card services to disburse a portion of the EIP payments to eligible recipients via Bank-issued prepaid cards. 

Under the second round, the Bank disbursed approximately $7.10 billion of EIP payments, with initial payments having begun January 4, 2021. The total balances remaining on the second round of EIP cards were $5.80 billion as of January 20, 2021. 

While the EIP Program's impact to earnings is expected to be slightly positive, it continues to temporarily have a significant impact on cash and deposit balances, leading to a reduced NIM along with a corresponding impact on the Company's leverage capital ratios. In conjunction with the Program and its balance sheet impacts, the Bank was granted temporary exemption from its requirements to maintain minimum regulatory capital leverage ratios by the Officer of the Comptroller of the Currency due to deposits received as part of the EIP program. The influx of EIP deposits is not expected to have any material impact on the Company's risk-weighted capital ratios. 

The Company is working with other banks to transfer deposits off-balance sheet in an effort to relieve the impact of the substantial influx of deposits related to the second round of EIP.” 

So whom does the stimulus benefit? I got $600. MetaBank got $7.10 billion of EIP payments. Go figure.