Simmons Wins Battle Over Pre-paid Rushcard
Russell Simmons is celebrating recent changes in the U.S. financial industry - the hip-hop mogul's prepaid debit card venture is now exempt from credit card regulation fees.
The Def Jam Recordings founder sells the RushCard in a joint venture with a debt collection company.
After a customer pays cash for the card, Simmons charges a $3 (£2) activation fee, $9.95 (£6.60) per month, $2.50 (£1.70) for each automated teller machine (ATM) withdrawal, $1 (£0.67) for each card transaction, and 50 cents (£0.30) to check the card's balance at an ATM.
Consumer advocates have claimed the card hurts low-income Americans, but Simmons dismissed the allegations and began fighting for changes in the U.S. financial services reform bill earlier this year (10).
In a letter to lawmakers, he wrote: "I have worked all of my adult life as an advocate for the poor, the voiceless and the under-served... Debit cards are what keep the under-served - including minorities, immigrants, the poor, soldiers, veterans and students - from the claws of payday lenders and check cashers, from humiliating lines waiting to cash their paychecks and then more lines to pay their bills."
Now the mogul has scored a surprise exemption on interchange fees.
In a statement celebrating his victory, he says: "We are grateful that the conferees worked to reduce any unintended consequences... on the poor, unbanked and under served... This will protect the fees on the most vulnerable, which is what I care about the most."