Pa.’s Dean joins lawmakers arguing Americans shouldn’t get hit with fees if COVID-19 stimulus is paid through debit cards

By: - December 29, 2020 4:00 pm

WASHINGTON, DC – JANUARY 21: The U.S. Capitol is shown at dusk.(Photo by Win McNamee/Getty Images)

By Kathie Obradovich

If Americans are going to receive the latest coronavirus stimulus payment through a government-provided debit card, they should not have to pay fees, Democratic lawmakers, including Rep. Madeleine Dean, D-4th District., have told the  Treasury Department and Internal Revenue Service.

Congress has approved new stimulus payments of up to $600 per individual. Axne and nine colleagues from the House Financial Services Committee wrote to the federal agencies, asking whether they plan to use debit cards to make the direct payments.

“If so,” the lawmakers wrote in a letter to the agencies, “we ask that you explain how you plan to improve communication, ensure there are no fees for the user, and simplify the agreement they have to sign, removing any mandatory arbitration clauses.”

The Treasury introduced prepaid debit cards during the last round of coronavirus stimulus payments authorized under the CARES Act. The cards were issued last spring to millions of Americans, while paper checks were issued to others. The cards, issued through a private vendor, came with numerous restrictions and fees.

About 200 Iowans contacted the Iowa Attorney General’s Office with concerns about the cards and many said they threw the cards away, thinking they were a scam.

U.S. House overrides Trump veto; approves $2k stim payments: How Pa. lawmakers voted

After Iowa Capital Dispatch reported on the fees, Axne and other Democratic members of the House Financial Services Committee sought a waiver of many of the fees and a simplified card user agreement.

The Treasury eventually waived the $7.50 card replacement fee, lifted the limit on how much of the balance the user could transfer to a bank account, and improved communications. Some fees, including for the use of “out of network” ATMs, remained.

If the debit cards are used for the new round of payments, Axne and other committee members are seeking a complete elimination of the fees associated with using the card or transferring its balance.

The lawmakers also called for better public communication of plans to use the debit cards and how to use it. “We hope better communication will reduce confusion and prevent people cutting up their debit cards again because they believed this was a scam,” the letter states.

In addition, the lawmakers are seeking to simplify the cardholder agreement that recipients were required to sign and eliminate any arbitration clause, used last time to prevent card recipients from forming a class action suit in case of problems with the card.

Signers of the letter also included: U.S. Reps. Sean Casten, D-Ill.;  Cindy Axne, D-Iowa;  Bill Foster, D-Ill., Vicente Gonzalez, D-Texas; Denny Heck, D-Wash., William Lacy Clay, D-Mo.; Al Lawson, D-Fla.; Stephen Lynch, D-Mass; Rashida Tlaib, D-Mich., and Jennifer Wexton, D-Va.

The U.S. House voted this week to expand the direct payments to up to $2,000 per individual, but the Republican-controlled Senate has not yet agreed to bring it up. Senate Majority Leader Mitch McConnell, R-Ky., on Tuesday blocked a Democratic move for an immediate vote on the larger stimulus payment.

On the Senate floor Tuesday, McConnell noted Trump’s calls not only for the larger checks but also for action on two other matters: a repeal of liability protections for social-media companies, and an investigation into the integrity of the November election.

“Those are the three important subjects the president has linked together,” he said. “This week, the Senate will begin a process to bring these three priorities into focus.”

Kathie Obradovich is the editor of the Iowa Capital-Dispatch, a sibling site of the Pennsylvania Capital-Star, where this story first appeared. Capital-Star Washington Reporter Laura Olson contributed to this story. 

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