#Payments & Finances

[mostlysignssomeportents]

Fintech bullies stole your kid’s lunch money

I'm coming to DEFCON! On Aug 9, I'm emceeing the EFF POKER TOURNAMENT (noon at the Horseshoe Poker Room), and appearing on the BRICKED AND ABANDONED panel (5PM, LVCC - L1 - HW1–11–01). On Aug 10, I'm giving a keynote called "DISENSHITTIFY OR DIE! How hackers can seize the means of computation and build a new, good internet that is hardened against our asshole bosses' insatiable horniness for enshittification" (noon, LVCC - L1 - HW1–11–01).

Three companies control the market for school lunch payments. They take as much as 60 cents out of every dollar poor kids' parents put into the system to the tune of $100m/year. They're literally stealing poor kids' lunch money.

In its latest report, the Consumer Finance Protection Bureau describes this scam in eye-watering, blood-boiling detail:

https://files.consumerfinance.gov/f/documents/cfpb_costs-of-electronic-payment-in-k-12-schools-issue-spotlight_2024-07.pdf

The report samples 16.7m K-12 students in 25k schools. It finds that schools are racing to go cashless, with 87% contracting with payment processors to handle cafeteria transactions. Three processors dominate the sector: Myschoolbucks, Schoolcafé, and Linq Connect.

These aren't credit card processors (most students don't have credit cards). Instead, they let kids set up an account, like a prison commissary account, that their families load up with cash. And, as with prison commissary accounts, every time a loved one adds cash to the account, the processor takes a giant whack out of them with junk fees:

https://pluralistic.net/2024/02/14/minnesota-nice/#shitty-technology-adoption-curve

If you're the parent of a kid who is eligible for a reduced-price lunch (that is, if you are poor), then about 60% of the money you put into your kid's account is gobbled up by these payment processors in service charges.

It's expensive to be poor, and this is no exception. If your kid doesn't qualify for the lunch subsidy, you're only paying about 8% in service charges (which is still triple the rate charged by credit card companies for payment processing).

The disparity is down to how these charges are calculated. The payment processors charge a flat fee for every top-up, and poor families can't afford to minimize these fees by making a single payment at the start of the year or semester. Instead, they pay small sums every payday, meaning they pay the fee twice per month (or even more frequently).

Not only is the sector concentrated into three companies, neither school districts nor parents have any meaningful way to shop around. For school districts, payment processing is usually bundled in with other school services, like student data management and HR data handling. For parents, there's no way to choose a different payment processor – you have to go with the one the school district has chosen.

This is all illegal. The USDA – which provides and regulates – the reduced cost lunch program, bans schools from charging fees to receive its meals. Under USDA regs, schools must allow kids to pay cash, or to top up their accounts with cash at the school, without any fees. The USDA has repeatedly (2014, 2017) published these rules.

Despite this, many schools refuse to handle cash, citing safety and security, and even when schools do accept cash or checks, they often fail to advertise this fact.

The USDA also requires schools to publish the fees charged by processors, but most of the districts in the study violate this requirement. Where schools do publish fees, we see a per-transaction charge of up to $3.25 for an ACH transfer that costs $0.26-0.50, or 4.58% for a debit/credit-card transaction that costs 1.5%. On top of this, many payment processors charge a one-time fee to enroll a student in the program and "convenience fees" to transfer funds between siblings' accounts. They also set maximum fees that make it hard to avoid paying multiple charges through the year.

These are classic junk fees. As Matt Stoller puts it: "'Convenience fees' that aren't convenient and 'service fees' without any service." Another way in which these fit the definition of junk fees: they are calculated at the end of the transaction, and not advertised up front.

Like all junk fee companies, school payment processors make it extremely hard to cancel an automatic recurring payment, and have innumerable hurdles to getting a refund, which takes an age to arrive.

Now, there are many agencies that could have compiled this report (the USDA, for one), and it could just as easily have come from an academic or a journalist. But it didn't – it came from the CFPB, and that matters, because the CFPB has the means, motive and opportunity to do something about this.

The CFPB has emerged as a powerhouse of a regulator, doing things that materially and profoundly benefit average Americans. During the lockdowns, they were the ones who took on scumbag landlords who violated the ban on evictions:

https://pluralistic.net/2021/04/20/euthanize-rentier-enablers/#cfpb

They went after "Earned Wage Access" programs where your boss colludes with payday lenders to trap you in debt at 300% APR:

https://pluralistic.net/2023/05/01/usury/#tech-exceptionalism

They are forcing the banks to let you move your account (along with all your payment history, stored payees, automatic payments, etc) with one click – and they're standing up a site that will analyze your account data and tell you which bank will give you the best deal:

https://pluralistic.net/2023/10/21/let-my-dollars-go/#personal-financial-data-rights

They're going after "buy now, pay later" companies that flout borrower protection rules, making a rogues' gallery of repeat corporate criminals, banning fine-print gotcha clauses, and they're doing it all in the wake of a 7-2 Supreme Court decision that affirmed their power to do so:

https://pluralistic.net/2024/06/10/getting-things-done/#deliverism

The CFPB can – and will – do something to protect America's poorest parents from having $100m of their kids' lunch money stolen by three giant fintech companies. But whether they'll continue to do so under a Kamala Harris administration is an open question. While Harris has repeatedly talked up the ways that Biden's CFPB, the DOJ Antitrust Division, and FTC have gone after corporate abuses, some of her largest donors are demanding that her administration fire the heads of these agencies and crush their agenda:

https://prospect.org/power/2024-07-26-corporate-wishcasting-attack-lina-khan/

Tens of millions of dollars have been donated to Harris' campaign and PACs that support her by billionaires like Reid Hoffman, who says that FTC Chair Lina Khan is "waging war on American business":

https://prospect.org/power/2024-07-26-corporate-wishcasting-attack-lina-khan/

Some of the richest Democrat donors told the Financial Times that their donations were contingent on Harris firing Khan and that they'd been assured this would happen:

https://archive.is/k7tUY

This would be a disaster – for America, and for Harris's election prospects – and one hopes that Harris and her advisors know it. Writing in his "How Things Work" newsletter today, Hamilton Nolan makes the case that labor unions should publicly declare that they support the FTC, the CFPB and the DOJ's antitrust efforts:

https://www.hamiltonnolan.com/p/unions-and-antitrust-are-peanut-butter

Don’t want huge companies and their idiot billionaire bosses to run the world? Break them up, and unionize them. It’s the best program we have.

Perhaps you've heard that antitrust is anti-worker. It's true that antitrust law has been used to attack labor organizing, but that has always been in spite of the letter of the law. Indeed, the legislative history of US antitrust law is Congress repeatedly passing law after law explaining that antitrust "aims at dollars, not men":

https://pluralistic.net/2023/04/14/aiming-at-dollars/#not-men

The Democrats need to be more than The Party of Not Trump. To succeed – as a party and as a force for a future for Americans – they have to be the party that defends us – workers, parents, kids and retirees alike – from corporate predation.

Support me this summer on the Clarion Write-A-Thon and help raise money for the Clarion Science Fiction and Fantasy Writers' Workshop!

If you'd like an essay-formatted version of this post to read or share, here's a link to it on pluralistic.net, my surveillance-free, ad-free, tracker-free blog:

https://pluralistic.net/2024/07/26/taanstafl/#stay-hungry

Image: Cryteria (modified) https://commons.wikimedia.org/wiki/File:HAL9000.svg

CC BY 3.0 https://creativecommons.org/licenses/by/3.0/deed.en

[vamprisms]

one does not simply walk into mordor? thank fuck i hate walking. tell sam to pull the 1998 nissan micra around

[hamingo]

Hey there!

Just in case anyone's forgotten, I am still taking COMMISSIONS BY DONATION!

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[dreamlogic]

in boring adult annoyances, i recently converted my checking account to a different type of checking account with the same credit union. i've done this a couple times over the years cuz it's the same checking account my dad helped me set up when i was 13 and this CU is still my primary financial institution. asked the banker

"will my account number remain the same?"

"yes, we're just converting it to a different type of the same account!"

"so my direct deposit and autopays won't be impacted?"

"correct!"

"and i can still use the same debit card i've been using for the last ~6 years!"

"absolutely!"

"great, let's do it."

fast forward to this week, when three of my autopay bills bounced, my debit card isn't working, and a closer look at my account number shows a 1-digit change at the end. go back to the same branch like "hey no offense but what the fuck??"

different banker takes a look at my accounts, makes a Face, and politely casually asks "so where did you go to make the switch? :)"

"here, this branch. that person over there was actually the one who helped me."

The Face intensifies. ".....Ah. I See. well, it looks like the way the changes were made may have Disrupted some things. you're gonna need a new debit card, etc, i'll get that printed for you ASAP."

[5 minutes later the banker who fucked up the first transaction sheepishly approaches me to hand over my new debit card & apologize profusely.]

[lastthroes]

found out there's a pnach cheat you can use to mute nova's calls in xillia 2 (she gets REALLY insistent if your current gald is over the quantity of the next payment) and now i'm imagining nova calling him and ludger just stares at the ghs in silence and blocks her number

[becauseanders]

HAPPY VEILGUARD EVE!

[joysmercer]

ostensibly the descendants were placed in anubis (and nowhere else) for a reason, but victor wasn't seeker so he couldn't have known who the descendants were. but it also wouldn't take a genius to figure it out, especially since details like the members' names, the kids' scholarship records, and everyone's pictures (the easiest clue of all since they're all identical) were probably easily found via the internet or trudy's office or the school or the house itself. so there's a very high chance he actually did know, by the time s3 rolled around, that he had the descendants under his roof and who they were, even though the show made it seem like he was clueless. so perhaps victor knew a lot more about everything than he was letting on but did a damn good job of covering it up…starting with who were (or weren't) the paragon and osirian.

[ecommerceworkforce]

Get Premium Service from Shopify Expert

[altruistic-meme]

*aggressively shaking my mother* I know I know I know I know I know I get it I do

[roseband]

hahaha no i see leftist influencers saying "poor immigrants didn't vote for these policies, it was the rich ones who won't be affected"

babes, i know what the dem ground game in nyc (specifically bk/queens) saw at least with the chinese american community, cause when i was talking to two local reps who were chinese/taiwanese american, they were basically frothing at the mouth asking for me to exchange personal contacts when i mentioned my husband is fluent in fuzhounese not just mandarin and is willing to canvass locally in asian neighborhoods

the sheer amount of misinformation going on in those areas of the city (that people fell for most importantly, out of greed) is the problem.....

the working poor immigrants were told a bunch of lies about other races immigration to make each other swing rightward like crabs in a bucket, so they... can bite each other's dicks off?

[border-collie]

Can't afford to rent because I have two dogs, can't afford to buy because I don't have a 10% down payment. Stuck in living-at-parents purgatory.

[wonderpaytec]

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[theres-whump-in-that-nebula]

Day two of rapidly pounding down two to three cups of coffee in one sitting like a fucking maniac:

I did my dishes, disinfected and de-scaled my kitchen sink, swept the floors, rearranged the ingredients I have out on the counter, wiped down my microwave, the stove, and the countertops with vinegar water.

[techtow]

Join Wise and get £50. It's simple, quick, and rewarding!

[sniffanimal]

I'm really frustrated about my finances because I've been budgeting pretty carefully and I even managed to excise like $50 from my expected expenses via deleting subscriptions before they billed, etc. did I just manage to nickel and dime myself to the red? how did I manage this? where did I go wrong? I even have like, a spreadsheet. it's so frustrating when you feel like you're doing everything right and still can't manage.

sidenote, always vocally support the education support professionals in your area. We, in my district, get summers off "paid", but realistically 30% of my paycheck for 10 months of the year is siphoned off to pay for the other 2 months, so I only make 70% of a living wage for my area despite working my ass off and being a credentialed professional in my field. union strong, were going for the jugular next season.

[bitcoinversus]

Cash App Leads All Finance Apps on Apple OS

BitcoinVersus.Tech Editor’s Note: We volunteer daily to ensure the credibility of the information on this platform is Verifiably True.If you would like to support to help further secure the integrity of our research initiatives, please donate here As of November 16, 2024, Cash App has secured the top position in the U.S. Apple App Store’s finance category, surpassing competitors such as PayPal…