- The Washington Times - Wednesday, June 16, 2004

Oregon has become the first state in the nation to provide unemployment benefits on debit cards.

Instead of waiting for mailed checks, out-of-work Oregonians can now have their weekly jobless payments electronically loaded onto new debit cards with a Visa logo, which can be used for purchases or cash withdrawals at millions of locations.

Oregon’s debit program for the jobless began in mid-May, and so far only 800, or 1 percent, of the state’s 80,000 unemployed residents are using it.

But the popularity of the program is expected to grow as more and more of those who have lost their jobs learn of the new prepaid debit card, which gives them easier access to unemployment benefits.

State officials recognize that the new program is unlikely to attract the estimated 14,400 — or 18 percent — of the state’s jobless population who already have their unemployment benefits directly deposited into their bank accounts. That method is still cheap, fast and secure, and state officials hope the percentage using it continues to rise.

But they say the debit cards — issued by the state and U.S. Bank — could be attractive to at least some of the thousands of out-of-work residents whose checks are mailed to their homes.

The cardholder receives his payment one-to- two-days faster than with a mailed check. And if the new card, known as the U.S. Bank ReliaCard, is used at stores for products or cash, the user pays no extra fees. However, there is a $1.50 charge for ATM use.

Another benefit for the card user is Visa’s policy of not holding the holder liable for unauthorized purchases if the card is lost or stolen.

Officials from the Oregon Employment Department (OED) say the new debit card is especially useful for the unemployed who lack bank accounts. One U.S. Bank official has said she expects as many as 4,000 more out-of-work Oregonians to opt for the debit card.

The number she said, will depend on how successful the state is in making residents aware of the new card.

“This can open doors for people. People who don’t have credit cards or bank accounts can use it for things they couldn’t do before, to rent movies or shop online, for example,” Gaye Crandall, program manager of U.S. Bank’s prepaid card unit, told the Associated Press.

The ReliaCard card is also cost-effective for the state, which pays out $16 million a week in jobless benefits, OED spokesman Tom Fuller said.

While each paper check costs 50 cents to generate, plus 44.6 cents to handle and mail, it costs only 7 cents to load the ReliaCard, he said.

Though Oregon is the only state that has issued a debit card for the unemployed, Mr. Fuller said, Utah is considering the same system. He said five other states, which he could not identify, have also inquired about the Oregon program.

Proponents of such cards say they are more convenient than food stamps, reduce the stigma sometimes associated with receiving them and also reduce fraud.

What’s more, supporters say, the cards help the poor by obliging them to learn the fundamentals of electronic banking.

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