Some DC banks to reimburse overdraft fees for unemployment benefits after tech glitch

Three of the region’s largest banks have agreed to refund overdraft fees to District workers collecting unemployment benefits who missed a payment last week due to a tech snafu at the D.C. Department of Employment Services.

About 39,000 people received late payments because of the tech glitch.

The three banks — Bank of America, Capital One and Wells Fargo — represent nearly half of the consumer banking market in the D.C. region, according to a statement Friday issued by At-Large Council member Elissa Silverman.

“D.C. workers receiving unemployment shouldn’t lose money for our error, that’s adding insult to injury,” Silverman said in the statement.

Silverman said she worked with the banks to get them to agree to cover any overdraft fees.

“It wasn’t the fault of our unemployment claimants that the money wasn’t in their accounts; it was the District’s error, and they shouldn’t have to pay a penalty for that,” Silverman.

Thousands of unemployment recipients would have received their weekly payment via direct deposit, bank card or check on Feb. 18, but the technical glitch at DOES prevented the payments.

“The D.C. Department of Employment Services, which administers the city’s unemployment compensation system, said that coding changes made by a vendor who maintains the legacy technology system caused the error,” Silverman said. “When the expected payments did not arrive, some workers faced overdraft fees, since their accounts did not have the unemployment compensation funds, and automatic payments for rent, utilities, and other bills had been scheduled.”

Bank of America will be refunding nonsufficient funds and overdraft fees caused by this issue. Impacted clients do not have to call the bank or take any additional actions, the release stated.

Wells Fargo and Capital One clients will have to contact their local branches in order to have the fee waived. Capital One customers can also call 1-800-655-BANK (2265).

Benefit recipients affected by the missed unemployment payments can also call Silverman’s office for assistance, at (202) 724-7772.

“While today’s agreement covers the three largest consumer banks in the region, I hope other banks in the District will follow suit,” Silverman said. “My office will be reaching out to the other banks to ask them to also waive overdraft fees for our affected workers. I encourage workers who got an overdraft fee because of this issue to reach out to their bank as soon as possible.”

Benefit recipients who missed unemployment payments Feb. 18 should have received payments between Tuesday and Wednesday this week, DOES Director Unique Morris-Hughes said at a news conference Monday.

D.C. Mayor Muriel Bowser said she expects this week’s benefits to be unaffected and that the issues has been resolved.

“We terribly regret that this happened,” Bowser said Monday. “We have a system that we’re asking to do a lot of things to accommodate these new programs.”

At a news conference earlier this week, Bowser said D.C. did not plan to cover any overdraft fees related to the late payments.

In early February, D.C. announced an $11 million initiative at DOES to help fund additional staff, as well as update system modifications.

Glynis Kazanjian

Glynis Kazanjian has been a freelance writer covering Maryland politics and government on the local, state and federal for the last 11 years. Her work is published in Maryland Matters, the Baltimore Post Examiner, Bethesda Beat and Md. Reporter. She has also worked as a true crime researcher.

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