Russell Simmons’ company RushCard, a prepaid debit card with ridiculous fees mainly used by people too poor to have a bank account [pdf], recently ended a two-week outage. Just let that sink in for a minute: if American Express had a two hour outage, CNN would be issuing updates every ten minutes. But we heard very damn little about RushCard.
Here’s the latest: in a completely voluntary act of good will, RushCard will start compensating users for their losses during the outage. That act of generosity was not compelled by any regulatory agency, because the regulations covering prepaid debit card are ridiculously lax. Take a look at the proposed regulations for those cards – it reads like what those of us who have regular debit and credit cards simply take for granted. But if you’re poor and financially vulnerable, you get this instead:
Wright says the income stored on his card was meant to cover their family’s expenses while she is on leave after spending two weeks in the hospital to treat her brain tumor and pulmonary hypertension. “With my husband now having to take the sole responsibility of our bills, it was very critical that we have access to our money,” she said. “This has brought a ton of stress when I should be resting.”
Two weeks after losing access to their account, Wright says the family is down to just $15. “We don’t have gas money, I’m out of meat to feed my children,” she said. Their water is due to be shut off on Sunday or Monday after they missed a payment that was due on Wednesday. Saturday is the last day Wright has to make a payment on her car before it’s counted as late and impacts her credit score.
When Bernie Sanders advocates postal banking, products like RushCard are the reason why.