Senators Urge CFPB to Investigate Prison-Release Prepaid Cards (Nov. 11, 2015)
Eighteen U.S. senators led by Cory Booker (D-N.J.), sent a letter last week to the CFPB urging protections for prisoners released from jail who receive prepaid cards when they exit incarceration. The lawmakers allege some of these cards carry unusual fees. Many prisons contract with card issuers to provide a secure way of handling cash prisoners receive when they exit jail for wages earned in prison or cash gifts from friends and family. Prepaid cards provide a major cost saving for prisons, versus handling cash directly, according to the products’ providers.
In their letter, the senators said many prison-exit prepaid cards carry “unusual fees.” “Any reductions to the wages and account balances of formerly incarcerated people could harm their ability to successfully reenter society,” the senators wrote, suggesting that some state and federal agencies contracting with card providers need to restructure those contacts so card costs are not passed on to former prisoners. The senators asked the CFPB to investigate and respond by Nov. 30.
Numi Financial, JPay and Rapid Financial Solutions, among others, supply prepaid card programs for prisoners upon their release. Rapid Financial Solutions, of North Logan, Utah, says its Access Freedom cards for liberated prisoners provide free ATM withdrawals from the MoneyPass network; free POS cash back and cardholders also may withdraw all funds at no charge from any bank that accepts MasterCard or transfer funds to a bank account via ACH—or close the account—at no charge. Benefits of the cards include ex-prisoners avoiding high check-cashing fees, Daren Jackson, a company executive, tells Pay News.
Brad Fauss, president and CEO of the NBPCA, tells Pay News that prepaid cards can be a critical tool for formerly incarcerated individuals, who do not have access to traditional financial services.
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