Russell Simmons hold many jobs in his life and one includes selling prepaid debit cards. Simmons has successfully lobbied for changes in the financial services reform bill and its regulation of credit card fees.
The debate over the interchange fees has brought out merchants that pay the fees on one side and large banks and credit card issuers that receive the fees on the other. Consumer groups cheered the agreement to bring oversight to the fees, saying the savings would be passed on to consumers.
The fees are set to be regulated by the Federal Reserve under an amendment. But the conference committee resolving differences between the Senate and the House, whose version included no regulation of fees, has struck a deal exempting prepaid cards such as Simmons’s.
[pagebreak]
Simmons made a powerful political case to the lawmakers that regulation would hurt low-income people who often buy his RushCard. He penned a blog post with the headline, ‘Democrats, Don’t Do This to the Poor!’
Advocates for the consumer say that Simmons’s argument might be more convincing if the RushCard didn’t carry such high fees: monthly users are charged a $3 activation fee, plus $9.95 a month, $2.50 for an ATM withdrawal, $1 for a debit card transaction and 50 cents to check their balance at an ATM..’
In his letter to lawmakers, Simmons talked about the ability of the RushCard to help this group, which is disproportionately made up of minorities.
‘I have worked all of my adult life as an advocate for the poor, the voiceless and the under-served,’ he wrote. ‘Debit cards are what keep the under-served — including minorities, immigrants, the poor, soldiers, veterans and students — from the claws of payday lenders and check cashers, from humiliating lines waiting to cash their paychecks and then more lines to pay their bills.’
