« How Russell Simmons Out-Lobbied Big Banks »
It was surely the only time that lawmakers hammering out the financial regulation bill were lobbied by a man wearing a hoodie and New York Yankees baseball hat. That's how Russell Simmons showed up on Capitol Hill earlier this month to fight a proposal to cap the fees retailers pay banks to process debit-card payments.
Simmons, best known for his Phat Farm clothing line and Def Jam music label, is also the owner of UniRush, a Cincinnati company that sells a prepaid Visa (V) debit card called RushCard, with about 2.5 million users. Simmons has persuaded lawmakers to exempt his business from a measure that would shift more of the cost of debit-card processing from retailers to the banks.
Unmentioned are the fees Simmons' company imposes for its card, including a $9.95 monthly charge, $3 for activation, $1 for every purchase if a PIN is used, $1 for online bill paying, and 50 cents to check your balance at an ATM. Direct deposits and online account management are free, as is a service that alerts customers when their balances are low. By comparison, check-cashing services can charge $50 to cash a $1,000 paycheck. Such fees have led some to ask whether Simmons is at least as interested in doing well as in doing good. Simmons is "marketing a product that is frankly exploitative of the poor and minorities," says Georgetown University law professor Adam Levitin, who specializes in banking issues. "He's no different than a bank."
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Jun 26, 2010 at 11:03 PM
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