New Report Focuses on Decreasing ATM Fees and Increasing Access


EBT Report cover

The California Reinvestment Coalition (CRC), a nonprofit, released a new report earlier this month focused on the ATM fees charged to people in order to access their public benefits in California and how that can be improved.  (In a 2014 report, CRC detailed how public benefit recipients in California pay $19 million a year in ATM fees to access their benefits.)

“During the past several years, we’ve worked with a coalition of committed advocates to understand how and why millions of dollars in public benefits were being diverted to ATM fees,” explains Andrea Luquetta-Kern, deputy director at CRC and the author of the new report.

“After hearing from our coalition and from consumers about these outrageous costs, the state of California took steps to address this problem.The state’s new EBT (Electronic Benefit Transfer) services contract that will start in 2018 promises to more than double access to free ATMs for public assistance recipients by providing free withdrawals through at least two major ATM networks, including at all Bank of America ATMs throughout California.”

Findings from the report, which is based on focus groups, interviews, and research by CRC:

Californians are interested in having their benefits directly deposited into a bank account, and like the idea of using a debit card instead of an EBT card because of the reduced costs, ease of use, and less stigma.

However, many recipients have deep mistrust of bank fees, fear government over-reach once they granted access to their personal bank accounts to make deposits, and need more certainty about the process and length of time it could take to set up direct deposit.

In response, CRC recommends that social services agencies statewide:

1. Ensure access to safe, affordable bank accounts such as those that will not overdraft and meet CRC’s SafeMoney standards or national Bank On standards.
2. Provide a transparent and efficient process for setting up direct deposit after first ensuring that families who need access to cash aid immediately are provided with functioning EBT cards on the same day as program enrollment.
3. Build trust by educating aid recipients on their privacy rights, including that county agencies will not and legally cannot peer into personal bank account activity or directly confiscate aid already deposited into accounts.
4. Keep direct deposit as a choice, not a requirement that families can opt for as their needs and preferences dictate.


In Case You Missed It: Bank of America to repay Arizona inmates for debit card fees

Earlier this summer, the Arizona Republic published a story about about Bank of America reaching a settlement over prepaid card fees that it charged to Arizona inmates.

Bank of America was given an exclusive contract with the Arizona Department of Corrections to provide prepaid cards to formerly incarcerated people.  However, according to accounts from these former prisoners, the fees that B of A charged was unclear and/or were higher than what other customers were charged.

In our “Prepaid Cards 101″ guide, CRC cautions consumers that prepaid cards may have costly fees that aren’t always clearly described.

According to the Arizona Republic, BofA reached a pre-settlement and agreed to no longer charge the fees.  The bank also agreed to pay $168,789 in compensation to potentially 70,000 former inmates if they all decided to file a claim.

New Survey finds ATM Fees Are a Major Expense,  Major Hassle for Public Assistance Recipients

EBT Graphic


Full report available here: “We don’t need to be charged for being poor.”

Oakland, California- May 2015- Earlier today, the California Reinvestment Coalition (CRC) released the results of a new survey of people who receive pay fees to use state-issued Electronic Benefits Transfer (EBT) cards for public assistance such as CalWORKs and General Assistance. The survey quotes the experiences of aid recipients including the impact of paying fees on their ability to make ends meet. It follows a previous report that found over $19 million in CalWORKs and other public assistance benefits are diverted every year to ATM fees charged to recipients in order to access their benefits.

CRC partnered with the California Community Colleges CalWORKs Association (CCCCA) and the Alameda County Social Services Agency (SSA) to survey 107 EBT card users to learn how their families deal with these fees, including what they do to try to avoid them, how the fees impact their families, and what they think should be done about these fees.

Andrea Luquetta, policy advocate with the California Reinvestment Coalition, and author of the report, explains: “People who rely on public assistance to make ends meet should not have to pay fees to access that aid. Through thus survey we are hearing for the first time on any scale the voices of people impacted by these fees. Their recommendations are clear. The state should provide more access to free ATMs, better access to direct deposit and support finding bank and credit union accounts that don’t charge excessive fees.”

Jessica Jones, a communications major at Sacramento City College, comments: “The fees are crazy- I was able to find an ATM that doesn’t charge fees, but it’s not nearby. So, it becomes a toss-up between making the trip to use the ATM that’s located far away but doesn’t charge fees, or using the ATM that’s convenient, but then losing some of your benefits to fees. I think the state should eliminate the fees altogether.”

Lori Cox, director of the Alameda County Social Services Agency, comments: “Undergirding all of SSA’s Asset Building work is the belief that economic injustice must be confronted wherever it is identified. Eliminating ATM surcharge fees for EBT users is one front in that battle.”

Participants cited strategies such as traveling further for fee-free ATMs, getting cash-back at a grocery store, or withdrawing large amounts of cash to avoid multiple ATM fees, but also noted the drawbacks of using these strategies.

A few of the survey findings are included below.  Full report is available here.

  • 27% of respondents report spending $15 or more (total) on ATM fees in the three months before the survey;
  • 72% of respondents said they didn’t know that direct deposit of their benefits into a checking account was possible and nearly 80% said that help setting up direct deposit into a bank or credit union account would be “very helpful” or “helpful” to avoid fees.
  • 67% of respondents said they were “interested” or “very interested” in learning about checking accounts that is free with direct deposit, has no overdraft fees, can be opened with $25, and is available to people who have been previously denied by other banks.

Additional Context

  1. In March 2014, CRC released the $19 million ATM fee, documenting the millions in public assistance benefits that are diverted every year to the nation’s largest banks, via ATM fees.  Over 40,000 people subsequently signed a Daily Kos petition calling on the banks to stop charging the fees.
  2. Several banks have committed to stop charging these fees, including Banc of California, City National Bank, Mechanics Bank, Rabobank and Tri Counties Bank.
  3. The state of California is re-designing its Request for Proposal for the vendor who administers the state’s EBT program. Recommendations for how this contract can be structured to reduce ATM fees charged to recipients is available here: CRC Recommendations.
  4. Earlier this month, Kansas governor Sam Brownback signed into law a requirement that welfare recipients are only able to withdraw $25 per transaction, a law that advocates have widely denounced as a poor tax, citing the dramatic increase in ATM fees this will mean for recipients, equivalent to a roughly 20% tax on their benefits.