A prepaid debit card company's lobbying efforts in Washington are paying off. Congressional Republicans are seeking to repeal limits to the amount banks can charge customers in overdraft fees. The company is Total System Services, and it stands to make tens of millions of dollars when the GOP starts letting it charge exorbitant overdraft fees. And Total System Services only had to spend $270,000 to make the GOP do its bidding. What a great investment!
Last week, Georgia Republican Sen. David Perdue introduced a resolution in Congress, alongside other Republicans including his fellow Georgian Johnny Isakson, to throw out a new package of rules for the prepaid debit card industry.
The rules, finalized by the Consumer Financial Protection Bureau in October, include limitations on overdraft fees, which have become a significant source of consumer complaints about the financial industry — and an important revenue stream for Georgia-based financial firm Total System Services, whose NetSpend unit is the country’s largest manager of prepaid cards, according to a 2015 financial filing.
The vast majority of prepaid debit cards don’t come with overdraft fees, but NetSpend’s do, and the fees accounted for 10-12% of its overall revenue in 2016, or $80-85 million, the company told investors in October. Its parent has spent big on lobbying and political donations in a bid to kill the rules: in the last three months of 2016 alone, it spent some $270,000 lobbying Congress.
The company’s political action committee has also given its home-state senators Perdue and Isakson $37,500 in campaign contributions since 2010, according to data from the Center for Responsive Politics.
Image of Sen. David Perdue by Gage Skidmore
Ten years ago, Chase was forced to withdraw the binding arbitration clauses in its credit card agreements as part of a settlement in a class-action suit (the company was accused of conspiring with other banks to force all credit-card customers to accept binding arbitration) (one of the things binding arbitration does is deprive you of […]
Every Monday, some poor "brand ambassador" at Chase has to post a "Monday motivation" tweet aimed at convincing people that one of America's largest, most rapacious banks is actually a cuddly, responsible business whose $12 billion bailout from Uncle Sam was perfectly justifiable and sure to be put to excellent use.
The US credit card industry was a very late adopter of security chips, lagging the EU by a decade or so; when they did roll out chips, it was a shambolic affair, with many payment terminals still not using the chips, and almost no terminals requiring a PIN (and some require a PIN and a […]
Get ready for the stream of your dreams, binge-watchers. There’s a contest afoot, and at stake is a lifetime subscription to Netflix. All you have to do is sign up, and you’re entered to win this ultimate Netflix plan. When does it expire? Only when you do. And hey, just in case you need something […]
There’s overwhelming support for clean energy, and the planet is giving us more reasons to invest in renewable power sources with every passing year. Even in the most inhospitable areas, wind and solar can provide a good chunk of our power, if not all of it. So why aren’t we all taking advantage of it? […]
Hey, we love Netflix and Hulu, but let’s face it: The whole setup doesn’t exactly encourage active viewing. For all the binge-watching we’ve done, it’s tough to expand our horizons or learn anything new – except for how many episodes of “The Office” it takes to make us fall asleep. It was only a matter […]