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U.S. Bancorp computer crash held benefits hostage
For a brief - but critical - few hours Wednesday, a computer malfunction at U.S. Bancorp prevented thousands of unemployed people from Minnesota to Oregon from accessing their cash.
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A computer malfunction at U.S. Bancorp early Wednesday left thousands of families nationwide who receive unemployment insurance and other government benefits in the lurch, unable to access cash or make purchases using bank-issued cards.
The problem only lasted a few hours, but it occurred at the worst possible time. In some states, including Minnesota and Oregon, unemployed workers tend to apply for their unemployment benefits early in the week and the payments are often processed by Wednesday morning -- precisely when U.S. Bancorp's computer system for processing benefit payments crashed.
U.S. Bancorp processes unemployment insurance, child support and other government benefits for more than a dozen states across the country. In these states, people can choose to receive their benefits through a U.S. Bancorp stored-value card known as the ReliaCard. These cards operate much like a debit card; people can use them to withdraw their benefit money from automated-teller machines and to make payments at retail outlets.
State regulators in Oregon, South Dakota and North Dakota said they received complaints from upset unemployment recipients early Wednesday who said their ReliaCards didn't work. A U.S. Bancorp spokesman says the Minneapolis-based bank, with 2,851 branches nationwide, is still investigating the cause of the malfunction. The bank did not know how many people were affected.
"The most important thing here is, the system is back up and running, and people can get their benefits now," said Steve Dale, a spokesman for the bank. "We apologize for any inconveniences this issue may have caused any customer."
However, at least one state is demanding answers.
"We consider this significant," said Darren Brostrom, director of unemployment insurance for North Dakota. "If you're on the road, and you're stopping to pick up gas, and ... you can't use [the card], then you're going to be upset. First, there's the embarrassment factor. Second, you'll be stuck at the gas station."
Added Brostrom: "We'll ask for an explanation of how this happened, and what are the steps we should take to make sure it won't happen again."
In Oregon, which has the seventh highest unemployment rate in the nation at 11.3 percent, the shutdown was brief and ReliaCards were working again by 9 a.m. Wednesday, said a spokesman for the Oregon Employment Department. But people were still affected.
'My money's not there'
"Wednesday is the first really big day of the week when people expect their unemployment money," said spokesman Craig Spivey. "The first thing they do is run down to the ATM with their Reliacard and then say, 'Oh, gee, my money's not there.'"
The South Dakota Department of Labor received 50 to 100 calls early Wednesday from residents who could not access their money, a spokeswoman said. The ReliaCards were working again by 10:30 a.m., she said.
In Minnesota, about 30 percent of the 175,000 people currently receiving unemployment insurance have their payments stored on the ReliaCard (the rest use direct deposit to their bank accounts), according to the Minnesota Department of Employment and Economic Development.
"We may have had a couple of calls about this, but nothing that reached critical mass," said Kirsten Morell, a spokeswoman for the agency.
Chris Serres • 612-673-4308
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