Competing With Banks

http://www.futureofcapitalism.com/2010/06/competing-with-banks

Rap music and fashion businessman Russell Simmons's RushCard is a pre-paid Visa debit card with about 2.5 million users that imposes "a $9.95 monthly charge, $3 for activation, $1 for every purchase if a PIN is used, $1 for online bill paying, and 50¢ to check the balance at an ATM." Bloomberg News reports that Democratic congressmen Gregory Meeks, Maxine Waters, and Richard Durbin apparently think this is such a great deal for consumers that it should get more favorable treatment than bank-issued debit cards.

Somehow I think that if the "RushCard" were issued by Rush Limbaugh rather than Russell Simmons, the lawmakers wouldn't be such big fans. It looks like a good business for Mr. Simmons, because he not only gets the fees, he gets use of the float on the cash that's been loaded on the cards. If you are a legal resident of America without liens against you, it's hard to see why you'd prefer the RushCard to a cheaper bank account with a debit card available through a credit union or a bank.

It's enough to make a cynic wonder whether the Democrats are actually interested in consumer protection, or just in bank-bashing.

by Ira Stoll  |  Jun 24, 2010 at 8:49 am Related Topics:  Banking, Politics, Press receive the latest by email: subscribe to the free futureofcapitalism.com mailing list