JP Morgan Chase, the bank tasked with operating the prepaid card system that many rely on to access their earned benefits through the EBT system has announced that it is exploring the sale of the system. The prepaid card business includes all Corporate, U.S. Public Sector and Electronic Benefit Transfer (EBT) programs, as well as Health Savings Accounts (HSA). Additionally, the firm will no longer solicit or accept any new prepaid card business.
The news comes on the heels of several investigations of the bank made by the US government for issues ranging from troubled mortgages to the Bernie Madoff scandal. This is also the second time in less than a year earned benefits systems have seen operational risks – cards were down in 17 states following a temporary outage in Xerox’s system, which processes the data and administration of the cards.
The Wall Street Journal has reported that the bank is looking to jettison any of its smaller and less profitable business units in an effort to tighten control and respond to compliance requirements from financial regulators.
A statement from the company said specifically that they were exploring a “wide range of options, including a sale.” No viable buyers have yet been named.
In addition to hiccups at the check-out line earned benefits recipients may face still more cuts, as recent Farm Bill negotiations have floated decreasing SNAP by as much as $9 billion dollars over the next ten years. The proposal comes as demand for earned benefits services has risen as a function of unemployment and underemployment in the US economy.
