Protesters criticize US Bank Reliacard service

Published 5:00 pm Saturday, April 30, 2011

The protest, organized by the Service Employees International Union (SEIU), aimed to highlight the fees associated with the card, which the union described as “exorbitant and inappropriate.”

The state has been using Reliacard since 2007 to pay benefits to recipients who do not have bank accounts, saying that using the pre-paid debit card makes more sense than dealing with thousands of checks.

Local SEIU member Mary Wood was among the protesters who gathered outside Lincoln City’s US Bank branch March 18.

Wood, an in-home care assistant, used a Reliacard to receive unemployment benefits for about six months after her client died two years ago. She said her son warned her about the card’s fees and that she was able to avoid incurring any, but said that other Reliacard users across Oregon have not been as lucky.

Wood said she and her fellow protesters want the state to renegotiate a better deal for benefit recipients when the current contract with US Bank expires at the end of this year.

“The big banks and Wall Street is what caused a lot of our problems,” said Wood, “and we just feel that we, as taxpayers, bailed the banks out. We just feel they should be a little nicer to us.”

SEIU spokesman Ed Hershey said that, while the union agrees that a debit card system beats checks, it is wrong for the state to allow the bank to “ding people extra money” by charging fees.

The Reliacard can be used free of charge for point-of-sale purchases, as well as for the first two visits each month to any ATM and the first two visits each month to any bank teller that accepts Visa.Beyond that, cardholders must pay $1.50 per ATM transaction and $3 per teller visit.

James Sinks, a spokesman for the Oregon treasurer’s office, said the state deliberately negotiated for the fee structure that protesters are complaining about. “The state negotiated hard to make sure that people, no matter where they live in Oregon, have access to their money for free,” he said.

Sinks said Oregon refused to accept the arrangement that US Bank has in place with several other states, which would have allowed unlimited free use of its own ATMs but no free use of other banks’ machines.

“Oregon said, ‘You know what? We don’t want to penalize people that don’t live next to a US Bank,'” he said.

Sinks said the Oregon contract requires the bank to allow cardholders to withdraw cash from any bank’s ATMs twice a month. The initial contract allowed cardholders only one free teller visit, with the treasurer’s office negotiating an increase to two in August 2010.

Sinks said that more than 80 percent of all Reliacard transactions are pointof- sale, which carries no fee and also allows cardholders to get cash back from many merchants.

He said the Reliacard service replaces a system in which benefit recipients effectively were forced to pay checkcashing charges.

SEIU spokesman Ed Hershey said it is “unseemly” for US Bank to impose fees on Reliacard use when it is already benefiting from the boost that state benefits give to its balance sheets – a boost that Sinks said was more than $985 million in 2010. “The use of the funds is where US Bank makes its money,” Hershey said.

US Bank spokesman Steve Dale disputed that characterization, saying the assets are “not really a major issue.”

Dale said the bank’s main reasons for entering into the contract were to strengthen its relationship with the State of Oregon by helping it and its citizens save money.

He said the bank receives some compensation in the form of interchange fees paid by merchants whenever the Reliacard is used as a debit card.

With the contract set to expire at the end of the year, Hershey said SEIU hopes the state will be able to negotiate for a fee-free system.