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Settlements in Arizona DOC, BOP Lawsuits Over Release Debit Card Fees

by Derek Gilna

The parties in a class-action suit filed in federal district court, which alleged Bank of America (BOA) charged excessive fees for debit cards given to Arizona state prisoners upon their release, reached a preliminary settlement in April 2017. Prisoner advocacy groups had argued that BOA deducted fees from the debit cards that prisoners received when they were released, which contained their own funds, each time they tried to withdraw money or check the card balance.

“Under a program for Arizona’s Department of Corrections, the State of Arizona provides recently released inmates with a prepaid card (‘BofA CashPay card’) containing funds issued by BofA (‘DOC Program Prepaid Cards’),” a statement announcing the settlement said.

The fees were not charged to regular BOA bank customers, and groups like Arizona Justice Alliance and Reinventing Reentry complained, stating the fees were exploiting released prisoners.

Prison Legal News has previously covered exploitive release debit cards and the mutually-beneficial contractual arrangements between the banks that issue them and corrections officials. [See: PLN, April 2016, p.38].

BOA’s contract with the Arizona DOC commenced in 2012, and since then the bank had collected $168,000 in fees – all of which will be returned under the terms of the settlement. Further, BOA agreed to not collect debit card fees in the future.

According to Sue Ellen Allen with Reinventing Reentry, “This is a message to departments of corrections and to banks that charging exorbitant fees to people who are getting out and desperately want to be members of the community again is really not the message we want.”

One former Arizona prisoner, Daria Brill, was surprised she had to pay fees for using her prison-issued release debit card, especially since she had been a BOA customer and was not charged fees to access her own funds prior to her incarceration.

“It’s just amazing to me that institutions can really think that it’s OK to take a population that’s trying to succeed and do the right thing and turn around and take advantage of them,” she said. “It feels really good to be part of justice and hold people accountable. I was held accountable for my crime. I did my time, and it’s nice to see that there’s justice beyond that.”

The settlement in the class-action suit received final approval on September 15, 2017; in addition to refunding the fees and an agreement not to charge them in the future, BOA will pay $105,681.10 in attorneys’ fees and $4,318.90 in costs. The settlement class is estimated at around 70,000 former Arizona state prisoners. See: Brill v. Bank of America, U.S.D.C. (D. Ariz.), Case No. 2:16-cv-03817-PHX-DLR.

Golomb & Honik, P.C., the law firm that represented the class members in Arizona, had previously represented federal prisoners in a similar lawsuit against JPMorgan Chase Bank.

For decades, when prisoners were released from the custody of the Bureau of Prison (BOP) they were provided with a bus ticket, the cash remaining in their trust account up to approximately $100 and a check for the difference. Since May 2012, however, federal prisoners have received their release money on a debit card issued by JPMorgan Chase, which imposed a number of fees to access the funds, including ATM surcharges.

The arrangement apparently originated from a no-bid contract between the bank and the U.S. Department of Treasury to provide debit card services to federal agencies, including the Bureau of Prisons. The BOP cards were not re-loadable, and prisoners had no access to alternative methods to receive their release funds. A complaint filed in federal court by former prisoner Jesse Krimes “alleged unjust enrichment, conversion, unfair and deceptive practices, and other claims” related to fees charged to former federal prisoners in connection with the debit cards.

One of the class members said he left prison with $120 on a card but could only access $70 due to the various fees. As Krimes stated, “the debit cards aren’t necessarily problematic until they charge us these large fees they don’t charge normal civilians. Chase was preying on a vulnerable population.”

After the bank’s motion to dismiss was denied, the parties agreed to refer the case to a neutral mediator and a settlement was reached in August 2016. Under the terms of the agreement, which received final approval from the federal district court in May 2017, Chase agreed to pay $446,822 to reimburse class members for all the fees they incurred plus $245,000 in attorneys’ fees and costs. See: Krimes v. JPMorgan Chase Bank N.A., U.S.D.C. (E.D. Penn.), Case No. 2:15-cv-05087-ER.

The Human Rights Defense Center, PLN’s parent organization, has filed three lawsuits challenging the use of fee-laden debit cards. [See: PLN, Feb. 2018, p.16; Dec. 2017, p.26; Oct. 2016, p.28]. 



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Related legal cases

Brill v. Bank of America

Krimes v. JPMorgan Chase Bank N.A.