If you see Russell Simmons at Jivamukti this week, congratulate him. After some impassioned lobbying, the hip-hop entrepreneur has won a battle against an amendment in the financial-reform bill that aimed to shift debit-card processing fees away from retailers and toward the lenders that issue the cards. Simmons claimed the amendment, which was the brainchild of Sen. Richard Durbin and targeted toward big outfits like Visa and Mastercard, would have unfairly impacted holders of his “Rush Card,” a prepaid debit card geared toward low-income customers, because it would have “forced” him to charge them more to make up the difference. But although Simmons maintains that he started the company out of the goodness of his heart, “because debit cards are what keep the underserved — including minorities, immigrants, the poor, soldiers, veterans, and students — from the claws of payday lenders and check cashers,” he wrote recently, as well as high checking-account fees and predatory credit-card companies, it doesn’t seem like his customers are getting a very good deal with the Rush Card, either.
As Bloomberg news points out:
One dollar for every purchase? That’s just like our bank. (NB: TD, I hate you.) Adam Levitin, a law professor at Georgetown who specializes in banking issues, thinks so too. “Simmons is marketing a product that is frankly exploitative of the poor and minorities,” he tells Bloomberg. “He’s no different than a bank.” Well, that’s not entirely fair. Can a bank do a side-angle twist like that?
Rap Impresario Simmons Wins Exemption on Debit-Card Fee [Bloomberg]