JP Morgan Lobbies For Its Debit Cards to Speed Food Aid to the Poor
The stimulus bill currently being debated in Congress includes more than $350 million for the WIC (Women, Infants, and Children) program, which distributes food aid to low-income families.
And JP Morgan, which famously declined to reveal how it would use its $25 billion in TARP bailout funds, has taken the opportunity to tout its debit cards as a good option for families getting WIC benefits. The bank is releasing a new paper today on "the funding, legislative and regulatory considerations" that switching to an all-debit food aid system would entail.
As this local report from Michigan illustrates, an all-electronic WIC program makes sense in terms of decreasing the stigma and increasing the convenience for families receiving aid. But I can't help but smile at the timing of JP Morgan's entreaty on a day when the president announces executive-pay limits that make its CEO publicly pouty.
Josh
Elana
Matt
Eric
A lot of states already have that sort of thing digitized- NH for example has the EBT system instead of food stamps (it could do with improvement, the EBT dialer is painfully slow, as I learned the hard way as a Convenience Store clerk when I was in college)
February 4, 2009 11:55 AM | Reply | Permalink
What I wonder is how much $$$ JP will make off this? If they're doing this pro bono, pardon my rudeness.
February 4, 2009 12:04 PM | Reply | Permalink
Of course they are not doing it pro bono. Corporate america doesn't do anything for free. That's why they are pitching it, to get taxpayer dollars in their coffers. I bet it $.10 for every dollar for profit and "overhead." Nice chunk of change.
February 4, 2009 12:14 PM | Reply | Permalink
Then I think Obama's executive pay ceiling of $500K is appropriate for the moment.
February 4, 2009 12:23 PM | Reply | Permalink
$0.10 on every dollar? I think that your estimate's a bit high. Yeah, they would make money, but that estimate is out there. But, then, it depends upon how the fee structure is set up: http://www.portfolio.com/views/blogs/market-movers/2007/07/02/the-wal-mart-moneycard-a-rip-off
February 4, 2009 12:35 PM | Reply | Permalink
The contract for WIC debit cards should be open to competitive bidding. I'm sure JP Morgan Chase would whine and scream if they had to compete with Capital One for the right to steal from the taxpayers.
February 4, 2009 1:08 PM | Reply | Permalink
These Debit Cards are horrible. The Banks, like Comerica, are making huge money off of the ATM and transfer fees.
They discourage the poor from having bank accounts where they can learn better financial practices. Forcing the unemployed and poor to get cash thats gets stolen more often or misspent - is a bad idea.
February 4, 2009 12:16 PM | Reply | Permalink
Not to mention it's a bonanza of information, of who spends what and where. I guess cards could be programmed to reject buying items that are deemed to be ineligible to be purchased under such program.
But they're poor and getting handouts, so they don't get any right to privacy.
February 4, 2009 12:25 PM | Reply | Permalink
I'm surprised Walmart isn't all over this. They already offer debit cards to the poor in lieu of banks. It's especially effective for those who either don't trust the banking system or people who don't speak English (i.e. immigrants).
February 4, 2009 12:25 PM | Reply | Permalink