FEMA to halt debit cards, use bank deposit

WASHINGTON - The federal government's relief agency said Friday it will discontinue its program to distribute $2,000 debit cards to hurricane victims and use bank deposits instead, two days after hastily announcing the novel plan to provide quick relief.

The Federal Emergency Management Agency said it will scrap the program once officials finish distributing cards this weekend at shelters in Dallas, Houston and San Antonio, where many of the evacuees were moved. No cards will be issued to victims in other states.

Hurricane victims at other locations will have to apply for expedited aid through the agency's traditional route - filling out information on FEMA's Web site to receive direct bank deposits, FEMA spokeswoman Natalie Rule said.

"We tried it as an innovative way to get aid to evacuee populations in Texas. We decided it would be more expeditious with direct deposits," she said, citing the large staffing operation that would be required to replicate the Texas operation in other states...

Demographics of the "unbanked"

-The unbanked are disproportionately poor. Four out of five of these families make less than $25,000 a year, and two out of five families have annual incomes of less than $10,000.

-The unbanked are mostly minorities. More than half of all unbanked households are nonwhite or Hispanic, and studies estimate that as many as one-third of all nonwhite households are unbanked.

-Unbanked households are young. One out of three unbanked families is headed by someone under the age of 35, and more than half are headed by persons under 45.

-The unbanked are likely to be less educated than the general population. For example, one survey of federal benefits recipients found that of those recipients without a bank account, 59 percent had less than a high school education.