Ethan A. Huff
April 25, 2013
The same corporation that received tens of billions of taxpayer dollars back in 2008 as part of the massive corporate bailout swindle is now reaping hundreds of millions of dollars every year from the federal food stamp program, according to little-known reports. For every American that signs up for the Supplemental Nutrition Assistance Program (SNAP) in 23 states, it turns out, JPMorgan Chase & Co. earns a processing fee of between 31 cents and $2.30 per month, which adds up to nearly $1 billion a year in additional revenues for the company.
Much of the younger generation might not realize it, but the federal food stamp program used to be just that — a system serviced by actual paper food stamps. Today, however, the system is run by an electronic card system known as Electronic Benefits Transfer (EBT), for which plastic cards are issued to recipients. These cards work much like credit or debit cards, and can easily be swiped discreetly at grocery and convenience stores for food purchases. And rather than have to be continually reissued like stamps, EBT cards are simply recharged every month with more money.
But with this advanced technology comes the need for residual processing, and this is where JPMorgan comes into the picture. According to MoneyMorning.com, 23 states currently contract out with JPMorgan to handle the processing responsibilities associated with EBT management. And for each person receiving food stamp benefits, JPMorgan is able to add a monthly sum to its revenue stream which, when compiled across the board, appears to add up to nearly $1 billion annually.
Based on the latest available figures, JPMorgan appears to have raked in roughly $100 million in revenues, on average, from each of the states with which it contracts throughout the past seven years. This adds up to at least $2.3 billion in total revenues during this same time period, although the precise figure cannot be confirmed. Even so, JPMorgan is clearly garnering a pretty penny off the backs of both taxpayers and the nation’s poorest individuals through its EBT contracts.
“This business is a very important business to JPMorgan,” said Christopher Paton, the Managing Director of JPMorgan’s public-sector payments business, to Bloomberg News back in 2010 about its federal food stamp revenue stream. “It’s an important business in terms of its size and scale … Right now, volumes have gone through the roof in the past couple of years.”
JPMorgan also collects fees directly from food stamp recipients
EBT processing fees are not the only source of food stamp revenue for JPMorgan, however. According to MoneyMorning.com, the corporate giant also charges individual states a monthly point-of-sale (POS) machine fee, and SNAP recipients who use their EBT cards at ATMs outside of the JPMorgan network are also charged additional user fees. JPMorgan also charges EPT users fees to replace lost cards, and even charges a 25-cent fee for customer service calls.
“All those charges and fees come directly out of the pocket[s] of SNAP recipients — people so poor they need food stamps to make ends meet,” writes David Zeiler, Associate Editor of MoneyMorning.com. “You’d think a bank that needed a $94.7 billion bailout from U.S. taxpayers as a result of the 2008 financial crisis would have a better sense of civic responsibility. But that’s just not in JPMorgan’s DNA.”
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This article was posted: Thursday, April 25, 2013 at 4:16 am