Oakland City ID Cards – Great Idea, Bad Fees

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We support reforms to the financial marketplace that protect consumers from unscrupulous banks and lenders.

By Consumers Union on Wednesday, March 20th, 2013

In an effort to provide Oaklandites with city identification cards, officials fell short with respect to the prepaid aspect of the card.  Unfortunately, the fees associated with the card come fast and often. The SF Chronicle did a great investigative piece that cited CU’s Michelle Jun analysis.

The organization, which has examined a variety of prepaid cards for several years, says that Oakland’s dual-purpose identification and debit card imposes an unusual combination of fees and takes advantage of the poor and disenfranchised population it was intended to help.

 

In addition to the $15 dollar fee to get the actual ID card consumers are charged:

$2 charged if cardholders enroll the card for federal benefits.$1 every time money from federal benefits is put on the card via direct deposit.75 cents for each purchase.

A $2.99 monthly fee.

A $1.50 fee for using in-network, domestic ATMs. Out-of-network ATMs
can charge more.

A $1.75 fee for every call to customer service.

A $1 minimum fee for loading the card at a Western Union.

The city of Oakland took the first leap in an effort to help some of the most vulnerable of the population, however, it is clear that the pricing is not favorable to consumers, especially low-income consumers.  Other cities considering such a card would be well served to make sure that any prepaid card provided with an ID card is created in the best interest of the consumer.

From the SF Chronicle article

Oakland’s card is unique because it was created by the city to primarily serve as a municipal identification card, largely for undocumented immigrants. City officials decided to add a prepaid debit function in an effort to expand the pool of potential users and give access to banking services to any poor Oaklanders. Oakland officials and the private contractor running the city’s program say the card’s fees are lower than the median fees charged by the most popular prepaid cards.

At this stage, we strongly recommend that  Oakland consumers who would like to take advantage of the ID aspect not activate the prepaid aspect.

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