Bridging the Opportunity Divide

The Common Sense Solution Keeping Dollars in the Hands of the Poor

February 2, 2015
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The Common Sense Solution Keeping Dollars in the Hands of the Poor
California residents who receive public benefits through an EBT card often face high fees when withdrawing cash from ATMs. Chris Hondros/Getty Images
No-fee ATM machines are a no-brainer.

It’s often been said that it’s expensive to be poor.

Take for example, a problem faced by social service aid recipients in Alameda County, Calif., who receive their benefits through an electronic benefits transfer (EBT) card. The piece of plastic works like a debit card, but when cardholders use it at a bank outside their own network, they’re charged a transaction fee. Given that low-income people often have trouble finding transportation to get where they need to go (an in-network bank, for instance), it’s a sad reality that EBT card users in Alameda County racked up $60,000 in ATM fees in 2012; statewide, the cost was a staggering $19 million.

So in an effort to keep benefits in the hands of low-income families, Alameda County is setting up no-fee ATMs just where EBT card users need them: in the lobbies of social service offices.

Andrea Luqetta of the California Reinvestment Coalition, a nonprofit that advocates for better financial services for low-income people, tells the Contra Costa Times, “Alameda County supervisors have shown incredible leadership with this. Other counties have taken creative steps, but this is the most creative and practical we’ve seen, and it’s the right thing to do.”

County Social Services Agency spokeswoman Sylvia Soublet agrees, “Paying a few dollars each time you use your card might not seem like a lot. But over the course of a year that can add up to a lot of money.”

Advocates of the program add that the no-fee ATMs will be a tool to help EBT cardholders gain financial literacy.

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