Pre-paid debit cards for the poor, issued by the City of New York.
New help to fast-track the homeless out of city shelters and into jobs and apartments.
These might sound like progressive policy proposals from mayor-elect Bill de Blasio, but they’re actually efforts on the part of lame duck mayor Michael Bloomberg, whose administration in its last weeks in office is making a final push at progress for the poorest New Yorkers, whether de Blasio agrees with the methods or not.
The Department of Homeless Services is rushing through what it calls “rapid exit services,” hiring as-yet undisclosed organizations to connect homeless families living in the shelter system with opportunities for jobs and permanent housing. By using an emergency procurement procedure, it will have a contract signed with up to two providers, for contracts that begin on New Year’s Day.
Meanwhile, the Office of Financial Empowerment at the Department of Consumer Affairs has issued an open call for financial institutions to work with the city to provide affordable, general-purpose prepaid debit cards to low-income New Yorkers — billed as an alternative to commercial options that often carry multiple, excessive fees.
“With the rising popularity of prepaid cards and the ability they offer for users to manage their money, the Department of Consumer Affairs Office of Financial Empowerment, as part of its efforts to expand access to mainstream banking, is seeking to identify a safe, consumer-friendly prepaid card,” said Abigail Lootens, spokesperson for the Department of Consumer Affairs.
The growing commercial prepaid debit card market — estimated at $77 billion last year by the Center for Financial Services Innovation—has traditionally targeted individuals without the financial means to maintain checking accounts. But it has since expanded to include customers such as parents seeking to control teenagers’ spending habits and people who would prefer not to keep their money in traditional banks, and that has helped drive down their costs.
The city’s proposed card is “in line with what the better prepaid cards on the market offer,” said Christina Tetreault, a staff lawyer for Consumers Union.
Municipal prepaid card programs are still in their infancy, but critics have raised concerns about them as well. Earlier this year Oakland, Calif., began providing city ID cards that double as prepaid cards, only to be slammed by Consumers Union for initially charging 75 cents per swipe, along with other fees. The city, which is targeting the cards at immigrants and low-income residents, has capped swipe fees at $12.50 per month. Users must also pay $1.50 for in-network ATM withdrawals and a $2.99 monthly service charge.
In New York, the city-issued cards would cost users no more than $5 a month to use and $5 to reload, along with clearly labeled fee disclosures and FDIC insurance of up to $250,000. The deadline for banks to submit proposed NYC debit cards is on Monday; the department aims to launch the program starting in December, before Bloomberg leaves office.
Some commercial cards offer even lower rates. Chase Liquid costs $4.95 per month and charges $2 for every non-Chase ATM withdrawal, but has no reload fees and comes with consumer protections. Bluebird, from American Express, has no monthly or reload fees at all. But neither of these plans shares the maximum monthly cap on fees detailed in the city’s proposal.
By far the most controversial of Bloomberg’s 11th hour programs to aid the poor has been the plan to lease New York City Housing Authority land to developers for the construction of market-rate housing. That plan has met with resistance from both tenant groups and the City Council, both of which have filed lawsuits to block the measure.
The program would allow for the construction of 4,300 luxury housing units on what are now the parking lots of eight public housing projects. NYCHA has predicted it would generate $30 to $50 million in annual revenue from the 99-year lease agreements, which it would use to address a monumental backlog of repair work and other maintenance needs.
The most recent lawsuit, filed by over 400 NYCHA tenants and prepared by the Urban Justice Center, alleges that the housing authority is skipping a required environmental review and other procedures in order to rush their plan through. Another suit, filed by the City Council and tenant associations in October, charges among other things that the authority is not legally authorized to lease land and that it failed to submit the initiative to the city’s land use review process.
While the Housing Authority is officially merely seeking ideas from developers about what they might do with the opportunity to build on NYCHA land, a clause buried in the call for ideas could lock the de Blasio administration in. The Housing Authority reserves the right to proceed with a proposed development plan, without going through competitive bidding, if it identifies a proposal of an “exceptionally responsive and visionary” nature.
While de Blasio had echoed fellow Democratic candidate Christine Quinn’s opposition to the plan during the primary, he has since declared that “there may well be a development plan that is believable and acceptable” and he “[doesn’t] rule it out.”