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Fallout From California's Unemployment Fiasco Involves Bank Of America
Assemblymembers listen as Faiz Ahmad, Bank of America managing director of transaction services, makes opening comments during a budget subcommittee hearing on unemployment insurance on Jan. 26, 2021. (Anne Wernikoff/CalMatters)
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California unemployment debit card contractor, Bank of America, lost "hundreds of millions" of dollars last year as it scrambled to address record jobless claims, rampant fraud and a flood of consumer complaints, a senior bank executive told lawmakers Tuesday.
The assertion came at a state hearing hours after a new audit slammed the California Employment Development Department for years of mismanagement and technical errors that culminated in a failure to respond to skyrocketing unemployment after COVID-19 lockdowns.
More than an hour into the contentious Assembly budget committee meeting, the bank, which contracts with the state agency, was directly asked how much it has made on the contract it has held since 2010 — a question that both the bank and the state have repeatedly refused to answer when asked by CalMatters.
Here's what Faiz Ahmad, managing director of transaction services for Bank of America, had to say:
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"With respect to what the bank has earned last year, we've actually lost hundreds of millions of dollars on the contract. We never really mention it because it pales in comparison to the scale of the human cost of the pandemic."
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