Guest Commentary: Banks Must Stop Charging Welfare-Related Transaction Fees

By Anna Salamone, Oakland Tribune My Word © 2015 Bay Area News Group

Last year, banks skimmed an estimated $19 million from California’s welfare system, according to a study by the California Reinvestment Coalition. This profit came directly from the pockets of California’s poorest families, who rely on their welfare benefits to feed and support their children.

Instead of spending their money on necessities like rent and diapers, poor families were forced to fork over a percentage to banks.

Unlike in years past, welfare benefits are no longer paid to families through checks. Welfare benefits are now paid to families on bank cards. Families can use these cards at any retail locations that aren’t cash-only, just as they would a debit card. And similar to a debit card, if a family wants to withdraw cash, they can do so at an ATM. That’s where the trouble comes in.

Welfare bank cards aren’t associated with any specific bank, so for families to withdraw money without incurring ATM fees, they have to find a fee-less ATM — a rarity these days. At a regular ATM, families can expect to pay up to $4 per transaction to access their cash benefits. These fees quickly add up, especially when considering that an average welfare benefit to a Bay Area family is only $670 per month.

Last year, Bank of America took in $3.6 million from welfare transaction fees. Chase earned $2.8 million, and Wells Fargo earned $2.3 million.

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http://www.contracostatimes.com/opinion/ci_28140154/guest-commentary-banks-must-stop-charging-welfare-related