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Michigan declined Quicken Loans' offer to aid unemployment system

Craig Mauger
The Detroit News

Lansing — Quicken Loans, the nation's largest mortgage lender, offered to help the state of Michigan with surging unemployment claims that overwhelmed its system, but the state rejected the Detroit-based company.

As state restrictions aimed at preventing the spread of COVID-19 shuttered the economy here in March, Michigan experienced record unemployment filings that peaked in early April. Tens of thousands of people were left waiting for benefits.

Since March 15, nearly 1.5 million people have filed for unemployment in Michigan. The Unemployment Insurance Agency's problems meeting the historic demand have been a point of contention for Republicans who control the Michigan Legislature in overseeing Democratic Gov. Gretchen Whitmer's administration's response to the novel coronavirus.

“We need answers from the administration about why they declined," said Rep. Matt Hall, the Republican who chairs the Joint Select Committee on the COVID-19 Pandemic, when asked about the Quicken Loans offer.

“If this could have helped those people get paid faster, then the administration should absolutely have accepted their help," Hall added.

The state received an offer of assistance, "if needed," from Quicken Loans in April, said Caleb Buhs, spokesman for the Michigan Department of Technology, Management and Budget.

After reviewing information technology needs at the time, the state determined improvements to the online unemployment filing system "would be completed more expeditiously by utilizing the system’s software developer that was already under contract," Buhs said.

It's unclear exactly what help Quicken Loans offered to provide the state. In oversight hearings, Republican lawmakers have focused on offers of outside help that were made to assist the state with capacity to manage claims. However, the lawmakers didn't mention specific companies.

A graphic from Michigan's Unemployment Insurance Agency explains a new process through which the state is asking people to file claims on different days of the week based on their last names. The process is meant to help deal with the high demand for unemployment benefits.

Quicken Loans — a company that created the first completely online mortgage experience, according to its website — confirmed last week that it was among those offering to aid the state.

The Detroit News attempted to obtain emails about the offer sent to or by Jeff Donofrio, director of the Department of Labor and Economic Opportunity, and Steve Gray, director of the Unemployment Insurance Agency. The department said it had no emails sent or received by the two officials that referenced "Quicken Loans" after March 1.

Quicken Loans initially reached out to the Michigan Department of Labor and Economic Opportunity with the offer of assistance and that information was given to Department of Technology, Management and Budget leadership for consideration, Buhs said.

There was never a discussion of cost, he added.

In a statement last week, Quicken Loans said after hearing about the high demand for the state's unemployment website, members of the company's technology team suggested officials see if the company could help.

"We shared an offer to assist, but it was clear the state and it’s contractors had a plan in place to help meet the unprecedented demand," the company said.

Quicken Loans founder and Chairman Dan Gilbert.

But many unemployment filers have said the state hasn't done enough to meet the demand. They have complained of unexplained denials, unanswered phone calls and lengthy delays in getting claims approved.

"There's no feedback," Rajeev Sethi of Rochester Hills said in April of trying to help his wife file for unemployment. "They never pick up."

As of May 13 — 51 days after Whitmer issued her first stay-at-home order — 134,000 people, about 8% of filers at the time, were waiting to receive unemployment benefits, according to committee testimony by Gray, the unemployment director.

On April 29, Gray apologized for areas of the state's unemployment website that "aren’t as user friendly as they could be."

"That’s probably putting it mildly," he said.

​Steve Gray, director of the State of Michigan Unemployment Insurance Agency

During a May 13 oversight hearing, Sen. Aric Nesbitt, R-Lawton, asked Gray and Todd Cook, director of legislative affairs for the labor department, about whether the department had received any offers from private companies to help build up phone or online capacity.

“My inbox has been full with people offering their services,” Gray said.

Gray said the state worked with Microsoft on a "chat bot" that could help answer questions people had. Cook said officials wanted to be mindful of how it was using public dollars and the ability to work with the state's specific system was important.

In addition to the hearings, lawmakers sent a list of questions to the Department of Labor and Economic Opportunity. Among them, lawmakers asked for an explanation of each offer of assistance to help the unemployment agency with capacity.

The Department of Labor and Economic Opportunity responds to questions from Michigan lawmakers about offers to assist with unemployment service capacity.

According to a document of responses, the department declined to list all of the offers. Firms "inquiring about potential services" were referred to the Department of Labor and Economic Opportunity internal finance team, the document says.

The state did tap Accenture, a management consulting and professional services firm, and Robert Half International, a human resources consulting firm, to help with staffing capacity for call center operations, according to the department's answers.

Efforts to fulfill unemployment claims in Michigan have been complicated by the efforts of an international criminal ring to file impostor claims using previously stolen or fraudulent personal information in a bid to exploit the COVID-19 pandemic, according to the U.S. Secret Service. 

While the UIA says no personal data from claimants has been stolen from the Michigan agency, the state has developed more fraud protections, including requiring unemployment filers to verify their identities through the provision of certain documents, the agency noted last week in a press release. The identity verification requests is leading to delays for valid jobless claims.