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Making every dollar count.

Byline: The Register-Guard

State Treasurer Ted Wheeler and U.S. Bank officials deserve credit for agreeing to reduce fees on the state-issued electronic payment cards that provide unemployment and child- support payments to financially vulnerable Oregon families.

Oregon is one of 41 states that have entered into contracts with major banks to provide access to state benefits via prepaid debit cards. The cards make sense for the states, which save money on check-printing and mailing costs. They're convenient for those who receive state benefits, including more than 200,000 Oregonians.

But the debit card system has allowed banks in many states, including Oregon, to charge fees for withdrawals and overdrafts. Such fees are a nuisance for any consumer, but they're especially burdensome for the many who are financially distressed in these hard times and who are in dire need of every dollar in benefits they receive.

Earlier this year, the National Consumer Law Center issued a report that gave Oregon's ReliaCard program poor marks for its overdraft fees and other charges. Stories in The (Portland) Oregonian, The Wall Street Journal and The Huffington Post prompted calls for elimination of the fees by thousands of Oregonians, as well as groups ranging from Economic Fairness Oregon to the Service Employees International Union.

Wheeler responded by negotiating a better deal for ReliaCard users with U.S. Bank. Under the current agreement, card users are allowed two free automated teller cash withdrawals per month and charged $1.50 per transaction after that. Users are allowed two free withdrawals at teller windows, but pay $3 per teller withdrawal after that. Users who choose overdraft protection also face a hefty $17 penalty for spending more money than remains on deposit for their cards.

The new agreement, which goes into effect Jan. 1, will allow cardholders unlimited free withdrawals from ATM or bank teller visits. Because of recent changes to federal banking laws, cardholders no longer will have access to overdraft protection, thus making moot the issue of overdraft penalties. A $2-a-month inactivity fee will continue, but it will be assessed after a year without deposits or withdrawals instead of the current 180-day assessment. (Point-of-sale transactions will continue to be free to cardholders.)

Wheeler held the high cards in his negotiations with U.S. Bank. The state loaded more than $1 billion in unemployment benefits and child-support payments onto ReliaCards last year, and the treasurer could have taken the state's business elsewhere. But U.S. Bank's willingness to make key concessions enabled the bank to retain the state deposits - and allowed the state, in turn, to take advantage of U.S. bank's unrivaled number of ATMs and bank branches throughout Oregon.

The benefit card program has been a good deal for Oregon. Since 2007, electronic payments have saved the state more than $11.5 million in check-printing, processing and postage costs. They're also a good deal for people who receive state benefits, providing them with ready access to cash and, for those without bank accounts, a way to avoid check-cashing fees.

Now, thanks to Wheeler and U.S. Bank officials, the cards are an even better deal for financially struggling Oregonians.
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Title Annotation:Editorials
Publication:The Register-Guard (Eugene, OR)
Article Type:Editorial
Geographic Code:1U9OR
Date:Dec 1, 2011
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