Some lawmakers are wary of issuing money on Chase Banks debit cards
Complaints about use of debit cards for some state income tax refunds have prompted a bill that would require the Department of Revenue to give taxpayers a choice between the prepaid cards and paper checks. The Louisiana House Ways and Means Committee gave its approval Tuesday to House Bill 635, which would require the agency to give taxpayers the option of receiving their refund as an old-fashioned check.
Rep. Regina Barrow"This is very simple to me, I believe individuals should choose how they get their refund back," said Rep. Regina Barrow, who drafted the bill. "I don't think they should have to call in or write in."
The cards, which were criticized Monday by members of the House Appropriations Committee, are being sent out this year to taxpayers who do not request their refund be directly deposited into a bank account. The state is not paying Chase, the company running the program, for the service, and officials from the Department of Revenue told representatives Tuesday that the company benefits from the interest on the tens of millions of dollars that are put into the accounts linked to the Visa cards.
Because the department does not have to pay to send out the refunds, the department estimates the program will save about $315,000.
The state's paper income tax forms, which do not allow residents to request direct deposit, notify taxpayers that they will receive their refund in the form of a debit card. Those who want a check have to contact the Department of Revenue to request one after they receive the card.
Under Barrow's bill, taxpayers would be able to indicate on their tax return how they want their refund to be delivered.
Taxpayers can use the card like a traditional debit card, get cash from the card at a Chase branch, or use it at an ATM, though fees will apply if it is used at a non-Chase ATM. According to numbers provided Tuesday by the Department of Revenue, cards worth about $77 million have already been sent out this year. As of the end of last week, cards with a total balance of about $50 million had been activated, and about $45.5 million had been spent or withdrawn from the cards.
Representatives did not spend much time discussing the debit card program Tuesday, but the program drew the ire of the Appropriations Committee on Monday. At that meeting, representatives said they worried it would be difficult for some residents to get the money off their cards, especially if they live far from a Chase branch.
Jeff Adelson can be reached at jadelson@timespicayune.com or 225.342.5207.