Fed Report: $139 Billion in Gov’t Prepaid Loads in 2014 (July 21, 2015)
Government agencies disbursed a total of $139 billion through prepaid cards in 2014, according to the Federal Reserve’s latest annual report on government prepaid programs. The Fed’s just-released “2015 Report to the Congress on Government-Administered, General-Use Prepaid Cards” collected data from 15 bank issuers of 889 prepaid programs used by federal, state and local governments to disburse funds. The total amount distributed to prepaid cards last year was down 8 percent from 2013, when $151 billion was loaded onto prepaid cards—a downtick attributed to declines in state and local disbursements that were partially offset by an increase in federal programs, according to the Fed.
State payments under the Supplemental Nutrition Assistance Program (SNAP) comprised the largest chunk of overall government disbursements to prepaid cards in 2014, the report found, with a total of $69.9 billion in SNAP payments made during the year—just under half of all government prepaid disbursements. The federal Social Security Administration’s distributions under the Direct Express prepaid program ranked second, with $29.9 billion in payments. The remaining third of government prepaid disbursements included payments for unemployment insurance, child support and cash assistance programs, such as Temporary Assistance for Needy Families (TANF) and the Low Income Home Energy Assistance Program.
In 2014, issuers reported collecting $310 million in interchange fees, $158 million in cardholder fees, $16 million in payment card network incentive fees and $6 million in fees assessed to government offices. The majority of cardholder fees were for ATM withdrawals at $88.7 million. Issuers paid approximately $58 million in fees to third parties for ATM withdrawals and $13 million in fees to third parties for over-the-counter cash withdrawals.