The idea seemed like a common-sense solution: With thousands of meals intended for migrants uneaten and wasted, New York City leaders created a pilot program to distribute debit cards to families so they could purchase their own food.
The plan was quickly ridiculed by Republican leaders and conservative voices, who questioned the wisdom and fairness of giving debit cards to recent migrants, and predicted that it would be abused.
Questions were also raised about the cost to the city and how it chose the financial services company that will oversee the program, prompting Mayor Eric Adams to defend the plan.
Here is what you need to know:
What is the city’s new plan?
The city is planning to give prepaid debit cards to 500 migrant families with children to help them pay for food and baby supplies as part of a pilot program. The cards can only be used at supermarkets, bodegas, grocery stores and convenience stores.
City officials said the cards would be loaded once a month, with each person receiving about $12 per day; for a family of four, that would be roughly $1,440 per month.
The cards will initially go to families who have received a 28-day voucher to stay at a designated group of hotels. If the program is successful, it will expand to more families, with the contract’s costs rising to as much as $53 million. About $2 million could go to the financial services provider overseeing the program, while the rest would go to families, city officials said.
Under the city’s contract with the provider, Mobility Capital Finance, a card can hold no more than $10,000, in order to minimize security and fraud risks, but city officials said there was no reason a card would reach that threshold.
No debit cards have been distributed yet, but the program could start soon.
Why are people upset?
The plan received significant attention on Fox News, where Gov. Greg Abbott of Texas said the idea was “insanity” at a time when migrants were being accused of committing crimes.
Then a front-page opinion column in The New York Post this week labeled the plan a “debit card boondoggle,” incorrectly suggesting that migrants would receive “up to $10,000 each in taxpayer money” in an “open-ended, multibillion-dollar Bermuda Triangle of disappearing, untraceable cash used for any purpose.”
City and company officials pushed back, arguing that the debit cards were only to be used for purchases related to food and baby supplies and that they were similar to food stamp cards that have limits on the items that can be purchased.
Participants in the program must sign an affidavit vowing to restrict card usage to food and baby items; violators, if caught, risk being removed from the program, according to the mayor’s office.
“We need to dispel the rumor that we gave American Express cards to everyone,” Mr. Adams said at a news conference this month. “That is just not true.”
Why was MoCaFi chosen?
The contract was awarded to Mobility Capital Finance, a company known as MoCaFi that focuses on providing financial services to low-income communities, on an emergency basis without competitive bids from other companies.
The arrangement led to some skepticism, especially following the city’s no-bid, $432 million contract with DocGo, a medical services company whose work on the migrant crisis has been marred by scandal.
The mayor has enjoyed broad leeway to sign emergency contracts in times of crisis, including the coronavirus pandemic and the crush of 170,000 migrants entering New York.
But after the problems with DocGo, the city comptroller, Brad Lander, declared that migrant spending would need to be first authorized by his office on a case-by-case basis. His office approved the MoCaFi contract.
Mr. Adams, the city’s second Black mayor, said that MoCaFi matched two of his priorities: using technology to improve city services and hiring women- and minority-owned businesses.
“This company has a unique way that I would like to see if it’s successful to expand on using a product of this nature,” he said.
Mr. Adams argued that the plan would save the city money and said that there was “no relationship other than a professional relationship” with the contractor. He said he had been studying MoCaFi for nearly three years.
“Even in the no‑bid contracts, you still vet,” the mayor said this week.
What is the company’s background?
The company’s chief executive, Wole Coaxum, created MoCaFi in 2015, the year after a police officer fatally shot Michael Brown in Ferguson, Mo.
Mr. Coaxum, a former executive at JPMorgan Chase, created the startup in hopes of improving access to financial services for Black and Latino people. Since then, the company has worked with cities like Los Angeles on debit cards for emergency aid.
Mr. Coaxum said in an interview that the idea that his company did not have the right experience for the job was “simply just not true.” Many undocumented immigrants in the United States are “unbanked or underbanked,” he said, which is his company’s area of expertise.
“We’re in a position to give people a tool that allows them to efficiently get access to resources, allows them to be able to have choice, allows them to put dollars back into the community — that’s what we’re all about,” he said.
Mr. Coaxum is not one of the mayor’s biggest or most frequent donors: In June 2020, Mr. Coaxum gave $250 to Mr. Adams’s mayoral campaign — his only contribution to Mr. Adams or any of his political action committees. Asked about the donation, Mr. Coaxum said he “liked his message” as a candidate and there was “no expectation” that it would influence Mr. Adams.
Then in late 2020 or early 2021, Mr. Coaxum said he met with Mr. Adams as part of his “mayoral classes,” which Mr. Adams said he used to “find ideas of how to run cities more efficiently.”