JPMorgan plans to end its prepaid card service

January 9
BANKING
JPMorgan to end prepaid card service

JPMorgan Chase plans to sell or exit over time its business of issuing prepaid cards for corporate payrolls and government tax refunds and benefits, the bank said Thursday.

Last month, JPMorgan warned about 465,000 holders of the cards that their personal data may have been accessed by computer hackers who attacked its network in July.

The company mailed incorrect replacement cards to about 4,000 people receiving payments from the state of Connecticut. The state treasurer blasted the bank for its “obvious lack of attention to detail.”

Government regulators are focusing on whether corporate payroll programs that use the cards have sufficient safeguards against burdening employees with fees.

In July, New York state Attorney General Eric T. Schneiderman sent letters to more than 20 companies asking for details on how they use payroll cards. The probe was started after complaints from workers and advocacy groups about fees they incur for using the cards.


Employers have said they offer the cards to employees as an option along with paper paychecks and direct deposits to bank accounts. Even with the fees, they can be cheaper than check-cashing­ services.

— Reuters

Economy
Frigid weather’s price tag: $5 billion

Hunkering down at home rather than going to work, canceling thousands of flights and repairing burst pipes from the Midwest to the Southeast have a price. By one estimate, about $5 billion.

The country may be warming up from the polar vortex, but the bone-chilling cold, snow and ice that gripped much of the country — affecting about 200 million people — brought about the biggest economic disruption delivered by the weather since Hurricane Sandy in 2012, said Evan Gold, senior vice president at Planalytics, a business weather intelligence company in suburban Philadelphia.

Major U.S. airlines, which canceled about 20,000 flights starting Jan. 2, lost anywhere from $50 million to $100 million, said Helane Becker, an analyst with Cowen and Co. in New York.

School closures took their own toll, keeping home parents who couldn’t find alternatives for their children. Even if those parents worked from home, they might not have been as productive, said Tony Madden, regional economist with the Federal Reserve Bank of Minneapolis.

The insurance industry has yet to estimate costs, but Robert Hartwig, president of the Insurance Information Institute in New York, said insurers plan for about $1.4 billion in winter storm catastrophe losses in any given year.

“We certainly know there is an epidemic of frozen and burst pipes this week,” Hartwig said.

Roto-Rooter in Minneapolis and elsewhere has been “inundated” with calls about burst pipes and even frozen sewer lines since the cold snap, plumbing manager Paul Teale said.

— Associated Press

Also in Business

Ford Motor is raising the quarterly dividend it pays shareholders for the second time since restoring the payout in 2012. The automaker said its board declared a first-quarter dividend of 12.5 cents per share, a 25 percent increase from the previous 10-cent­ payout.

Diamond Foods will pay $5 million to settle charges by the Securities and Exchange Commission for its role in an accounting scheme. The SEC said it charged the San Francisco-based snack maker and two of its former executives for their roles in the falsifying of walnut costs to boost earnings. The SEC said it has reached a settlement with the company and former chief executive Michael Mendes, who has agreed to pay $125,000 to settle charges against him without admitting or denying allegations. Mendes has already returned or forfeited $4 million in pay received during the period of fraudulent reporting.

— From news services

Coming Today

8:30 a.m.: December jobs report released.

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