Solving the $19 Million ATM Fee Problem in California

Earlier this week, CRC released a report focused on the $19.4 million in public assistance money that went to paying ATM fees so recipients could withdrawal their benefits.

While one possible solution to this problem is for banks to simply stop charging these fees, we also believe that connecting Californians who receive CalWORKs to safe, low-cost banking accounts can help create future financial stability.

CRC is working with state officials, county officials in Los Angeles County and Alameda County and with some of the largest financial institutions to reduce the amount of cash aid used to pay fees rather than to support families. We are building on existing efforts by state and county agencies to alert recipients to the prevalence of fees and ways to avoid them.

With co-sponsor Western Center on Law and Poverty, we have introduced AB 1614, a bill that would make sure every CalWORKs recipients gets a monthly statement of transactions and clear information about their right to receive aid by direct deposit to a personal account and the comparative costs and benefits of doing so. We are working with large banks and other financial institutions to market to CalWORKs recipients accounts that avoid the most common and expensive fees, such as monthly service fees and overdraft fees.

Our goals are to:

  1. Increase the use of free cash withdrawal options for EBT cards,
  2. Increase access to fee-avoidant financial services, such as bank and credit union services that are free with direct deposit of CalWORKs cash aid, and,
  3. Provide practical and ongoing support to CalWORKs recipients to help them save on fees.

We are convening many of the major stakeholders on May 1st in Los Angeles to roll up our sleeves and create a plan to solve this problem. We are inviting thought-leaders, experts and anyone with insight to help us by responding to the $19 Million Fee Survey or by contacting Andrea Luquetta directly by phone at 415-864-3980 or by email at

Banks That Are Helping to Create Solutions

Major financial institutions have created accounts that we think will go a long way to helping CalWORKs recipients save on fees. Bank of America, Chase, Union, Citibank and Community Financial Resources all offer accounts and prepaid cards that meet several of CRC’s SafeMoney™ standards and we are working with them to get them to 100%. We are asking these banks to work with the government agencies to get information about the accounts out to CalWORKs recipients and streamline the direct deposit process so that more CalWORKs recipients can take advantage of the potential savings.

To see a chart of how these accounts meet CRC’s SafeMoney™ standards, turn to page 8 of the report.

The State Department of Social Services, Alameda County and Los Angeles County Are Laying the Ground Work

In February, the California Department of Social Services began calling thousands of CalWORKs recipients to alert them of alternative ways to access cash without paying fees. The Department is also developing a guide for distribution to CalWORKs recipients that will compare the benefits of signing up for direct deposit or continuing to use EBT cards so that recipients can choose for themselves what is best for their personal situation. The Alameda County Social Services Agency and the Los Angeles County Department of Public Social Services already support financial education to help CalWORKs recipients save money. All three agencies have committed staff leaders to work with CRC and other partners to develop solutions that meet local needs.

Financial Education Providers are Ready to Serve More People with Better Tools
Non-profit community organizations in both Alameda County and Los Angeles County are eager to reach more CalWORKs recipients, help them identify banking strategies to save money, and help them reach financial self-sufficiency. They need the support of the government and the banks to fund increased outreach and to develop the materials needed to address the specific challenges of choosing the best financial service tool for one’s needs.

CRC has been meeting with all stakeholders for many months to develop the proposals in the report. We are confident that each sector- public, private and non-profit- has critical resources to contribute and that by working together, we can eliminate the $19 million ATM fee.


One thought on “Solving the $19 Million ATM Fee Problem in California

  1. Pingback: California Reinvestment Coalition | Asset Building Program and Partners Recommend Best Practices for TANF Payment Card Contracts

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