According to a new report, New York City’s contract to give debit cards to migrants could cost more than City Hall anticipated. And the fact that an inexperienced bank got the contract does not help matters.
Eric Adams says the program would start with 500 families staying at The Roosevelt Hotel migrant shelter and cost $52million. The pilot program should help save money by allowing migrants to buy food and baby supplies. Officials say that will save $600,000 monthly and $7.2 million annually.
But, in reality, the contract’s fine print leaves the option open for the program to become an open-ended, multi-billion-dollar deal. The $53 million does not cover the total cost. It is the fee that Mobility Capital Finance (MoCaFi) will receive for its services, as explicitly stated in the contract.
This means City Hall can disburse at least $2.5 billion on the pre-paid debit cards over a year. As if that’s not enough, the city’s Housing Preservation & Development also reportedly did not go through the usual competitive bidding process. They simply awarded the job to Mobility Capital Finance (MoCaFi).
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As the Post notes, the contract for the pilot program says City Hall referred MoCaFi to HPD. Adams said earlier this month that he met MoCaFi’s founder, Wole Coaxum, on the campaign trail.
However, MoCaFi does not have experience running a program of this magnitude. Instead, the company usually focuses on pre-paid third-party debit cards and bank accounts, which are marketed to minorities.
Coaxum is a big supporter of universal basic income and left banking. He said that the 2014 killing of Michael Brown in Ferguson inspired him to serve the ‘underbanked.’
The contract allows up to $10,000 per migrant without an I.D. check or fraud control. But City Hall has said they will make the migrants sign an affidavit promising only to use the card for food and baby supplies.
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The debit card program is City Hall’s latest controversial move as it deals with the ongoing migrant crisis. Over 170,000 migrants have arrived in the city since the spring of 2022, and the crisis is only worsening as they continue to come in from Texas.
Adams confessed to Fox 5’s Rosanna Scotto earlier this week that, “We’re getting close to anywhere from 2,500 to peaking at 4,000 a week.” “What happens when there’s no more room?”Scotto asked at one point during the interview.
“We were not just saying we’re out of room as a soundbite,” Adams answered. “We’re out of room, literally. People are going to be eventually sleeping on the streets.”
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It was revealed earlier this year that a record number of migrants crossed the U.S. southern border in December, topping the highest amount under President Biden. Republicans have settled on border security issues as a main 2024 election issue, and it has become another reason his approval ratings continue to fall.
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