Good morning! My name is Shirley Genn. I am the Executive Director of the Brooklyn-wide Interagency Council of the Aging, Inc. It is a consumer-dominated, educational, networking and advocacy organization composed of seventeen local interagency councils who represent the 400,000 seniors residing throughout the borough. Brooklyn-wide has been a major force in New York State, in cooperation with other concerned groups in advocating for programs to improve the quality of life for our elderly. The overwhelming majority are low and moderate income individuals. This testimony addresses the concerns of poor, elderly and disabled persons.
I expect that this committee, which recommends legislation on Housing and Urban Affairs as well as Banking will be especially sensitive to the concerns I will briefly outline for your review. I am, of course available to answer questions you may have now or at some future (ate, as the need arises.
After having worked all their lives in the hope that they could spend their last years in dignity, the elderly are being told to "share the pain". With whom? Typically, people without bank accounts are poor. They live on minimal incomes, have limited education, are unfamiliar with maintaining accounting records. In many instances, language barriers exist. They barely subsist on the incomes they get from Social Security, Supplemental Security Income and other federal benefit programs. The federal government is asking that this vulnerable group subsidize the government and banks. Is that a fair way to "share the pain"'? - a favorite phrase frequently used by some in government charged with the responsibility of protecting the most vulnerable among us.
The federal government expects to save the Treasury about $500 million over the next 5 years with its implementation of the Debt Collection Improvement Act of 1996 by depriving seniors on Social Security and others of the right to determine where their benefit dollars will go and charging them for the privilege out of their own meager checks. So the government will "share the pain" by saving its distribution costs on the backs of its most vulnerable populations.
With care not to have the banks face a financial burden, the money will be electronically banked for all those too poor to have any banking history or experience. Without their consent, with no viable alternative offered, these poor federal recipients will now be given the privilege of "sharing the pain" with the banks. The cost to seniors and others in this vulnerable population is proposed to be $3. monthly. The banks will generously charge them .85/.95 cents per withdrawal after the initial withdrawal each month. And, if they are compelled by circumstances to complete this transaction at a "foreign bank", they will face an additional fee, in some instances $2 or $3 per transaction. I must also point out, while the banks readily accept the dollars put in, I have not seen legal safeguards to protect EBT customers. Where is there notice and opportunity to contest any government invasion into these accounts?
Please be reminded that the financial benefits already enjoyed by banks will increase exponentially with the full implementation of this law. Therefore, it is reasonable to assume that banks, in turn, have a responsibility to the communities from which they benefit The nation's banking customers, particularly its elderly, disabled and poor populations are entitled to some reciprocity.
With banks moving toward greater electronic systems and computerization, the industry is and will enjoy greater profits realized by modem efficiencies. Entire segments of our economic society, including the state, city and the private sector are using electronic technology to distribute salaries and payables. Electronic distribution of federal payments will infuse a profit-boom for banks. It is reasonable to expect banks to use some of these profits to make banking more convenient an less costly for consumers without whom these profits wouldn't exist. Our government should be making greater demands upon our banks to restructure their regulations so that low income consumers will be encouraged, not compelled, to be in the banking services mainstream.
Let me tell you about these "unbanked" seniors. Most are women, living alone. They live in poor communities with few amenities. There are frequently no banks nearby. The elderly, if they can walk, will be required to travel by bus (most cannot climb the subway steps) to and from the bank. If they are too frail or disabled, they have to pay for car- service or taxicabs. If they withdraw all their money at one time, there is a significant chance they will be mugged, and in addition to their physical plight, they will have no money for that month for rent, food, health care - the basics for survival. If they "draw down", it means several trips per month with the attendant costs outlined above. Please remember that their total monthly income is approximately $600. This sum must also cover gas, electricity, telephone, sundries such as soap, aspirin, etc., clothing and so on.
It is to our shame as the wealthiest nation in the world that such regulations should even be considered. I implore you not to allow this injustice to occur. The financial and emotional cost is too great for America's seniors, and its poor and vulnerable populations to bear.
Banks now receive Community Reinvestment credit (CRA) for services to special populations. The poorest and most fragile among us don't have the resources or the ability to request assistance in establishing businesses or purchasing homes. They live from month to month on marginal incomes, unable to sustain any loss of income or increased complexity in meeting, their financial obligations. They should not be asked to pay any portion of this burden. To the contrary, I have some suggestions on how to transition this special community into a banking mode.
I propose that the banks be required to initiate the suggestions I have outlined providing essential services to our neediest population, thereby fulfilling their community responsibility and be rewarded by receiving CRA credit - a little "sharing the pain" for banks.
The recommendations for your review and consideration are attached to this testimony. I hope that this committee will call for public hearings on this issue throughout our nation.