Should Cities Be in the Business of Issuing Debit Cards?

Looking to help immigrant residents, Oakland becomes the first city to offer a municipal ID card with the option of a pre-paid debit-card function.

National Journal
Emily Badger, The Atlantic
See more stories about...
Emily Badger, The Atlantic
Aug. 13, 2013, 6:36 p.m.

The city of Oak­land already of­fers res­id­ents a mu­ni­cip­al ID card, a form of iden­ti­fic­a­tion thought to help un­doc­u­mented im­mig­rants, in par­tic­u­lar, who might oth­er­wise fear re­port­ing crimes, or labor or hous­ing vi­ol­a­tions. Now, they’ve upped the ante, be­com­ing the first city to add a pre-paid deb­it-card func­tion to its ID.

Res­id­ents can re­load the card at West­ern Uni­on, dir­ect-de­pos­it paychecks to it, with­draw cash from it at ATMs, and shop with it like any oth­er pre-paid Mas­ter­card.

Gov­ern­ing has an in­ter­est­ing look today at how the whole thing is go­ing. With nearly one in 10 house­holds con­sidered “un­banked” in the U.S., Oak­land’s ini­ti­at­ive is part an ef­fort by many cit­ies to broaden the fin­an­cial op­tions avail­able to low-wage work­ers bey­ond check-cash­ing stores and pay­day lenders. The chal­lenges of be­ing “un­banked” are also re­lated to those of be­ing un­doc­u­mented. As J.B. Wogan writes:

A mu­ni­cip­al ID card with a deb­it fea­ture may be the nat­ur­al evol­u­tion of those two move­ments. The same people who lack of­fi­cial iden­ti­fic­a­tion are likely to be un­banked or un­der­b­anked. Un­doc­u­mented im­mig­rants, for in­stance, of­ten be­come tar­gets for rob­ber­ies be­cause they carry cash — in­stead of stor­ing money in banks — and are less likely to re­port crimes to the po­lice. The­or­et­ic­ally, it makes some sense for cit­ies to tackle both is­sues with the same pro­gram.

Oak­land has also couched the pro­gram as a crime-re­duc­tion strategy. But Wogan writes that the ID/deb­it card (you can sign up for the former without the lat­ter) has re­ceived con­sid­er­able cri­ti­cism for the fees at­tached to it: They in­clude a 75-cent trans­ac­tion fee, a $1.50 ATM with­draw­al fee, and a $2.99 monthly ser­vice fee. All of which pretty quickly adds up to a ser­i­ous bur­den on people who re­ceive their weekly pay­day in cash.

Oak­land and the com­pany man­aging the pro­gram sug­gest that the fees will go down as the idea catches on, cre­at­ing eco­nom­ies of scale. Con­sumer ad­voc­ates so far don’t seem sold. Could an im­prove­ment on the same idea work bet­ter some­where else? What would that look like?



Latest Polit­ics Posts:
Load­ing feed…

MOST READ
What We're Following See More »
PROCEDURES NOT FOLLOWED
Trump Not on Ballot in Minnesota
3 days ago
THE LATEST
MOB RULE?
Trump on Immigration: ‘I Don’t Know, You Tell Me’
3 days ago
THE LATEST

Perhaps Donald Trump can take a plebiscite to solve this whole messy immigration thing. At a Fox News town hall with Sean Hannity last night, Trump essentially admitted he's "stumped," turning to the audience and asking: “Can we go through a process or do you think they have to get out? Tell me, I mean, I don’t know, you tell me.”

Source:
BIG CHANGE FROM WHEN HE SELF-FINANCED
Trump Enriching His Businesses with Donor Money
5 days ago
WHY WE CARE

Donald Trump "nearly quintupled the monthly rent his presidential campaign pays for its headquarters at Trump Tower to $169,758 in July, when he was raising funds from donors, compared with March, when he was self-funding his campaign." A campaign spokesman "said the increased office space was needed to accommodate an anticipated increase in employees," but the campaign's paid staff has actually dipped by about 25 since March. The campaign has also paid his golf courses and restaurants about $260,000 since mid-May.

Source:
QUESTIONS OVER IMMIGRATION POLICY
Trump Cancels Rallies
5 days ago
THE LATEST

Donald Trump probably isn't taking seriously John Oliver's suggestion that he quit the race. But he has canceled or rescheduled rallies amid questions over his stance on immigration. Trump rescheduled a speech on the topic that he was set to give later this week. Plus, he's also nixed planned rallies in Oregon and Las Vegas this month.

Source:
‘STRATEGY AND MESSAGING’
Sean Hannity Is Also Advising Trump
6 days ago
THE LATEST

Donald Trump's Fox News brain trust keeps growing. After it was revealed that former Fox chief Roger Ailes is informally advising Trump on debate preparation, host Sean Hannity admitted over the weekend that he's also advising Trump on "strategy and messaging." He told the New York Times: “I’m not hiding the fact that I want Donald Trump to be the next president of the United States. I never claimed to be a journalist.”

Source:
×