Welfare recipients pay banks millions in fees (CA)

[Kadie]

Welfare recipients pay banks millions in fees

Marisa Lagos, Chronicle Sacramento Bureau

Friday, October 15, 2010


(10-15) 04:00 PDT Sacramento - --

Banks are making nearly $1.5 million a month in fees by charging California welfare recipients to withdraw their benefits using ATMs and debit cards - an amount that has nearly doubled since 2008.

The sharp increase comes as Gov. Arnold Schwarzenegger's administration has made cracking down on fraud in the state's welfare-to-work program a priority, most recently by barring use of welfare debit cards at casinos and cruise ships after media reports revealed that nearly $70 million in benefits had been withdrawn outside the state since 2007.

Advocates for the poor say that while Schwarzenegger has rightly cracked down on such abuses, he has failed to curb another source of waste: escalating bank fees that take money from needy families and from the California businesses where that money would otherwise flow.

By the end of this year, they estimate, more than $38 million will have been transferred from poor families to banks in the form of ATM and debit fees over the past three years. For example, in 2008, according to state figures, banks collected $10.1 million in fees from welfare recipients; this year, they are on track to collect more than $15 million. In June 2008, recipients paid out $833,000; banks collected $1.44 million the same month this year.



Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/10/15/MN5S1FRNI4.DTL&tsp=1#ixzz12RgWslLB

[arbusto_baboso]

1. I have some first-hand knowledge of this issue, since I work in benefits issuance in Cali.

When we first went to the EBT card (like a debit card), there were 3 large banks state-wide that didn't charge welfare recipients any fees to get their cash of their cards at the bank's ATMs.

Now there are none. Zero. Zip. Zilch. Nada.

When teabaggers here try to tell me that the rich aren't draining the poor dry, I bring up this issue. Almost makes their heads explode...

[Recursion]

2. The article says Quest network ATMs are free for the first 4 withdrawals per month NT

[arbusto_baboso]

4. In my county there ARE NO Quest ATMs.

And they aren't all that common elsewhere, either. And when you do find them, they are a considerable distance from the people who need them, most of whome depend on public transportation.

[sammytko]

10. What about getting cash back when you purchase something

I always use debit and get money back at the commissary, mostly for the tip and other small expenditures. Cheaper than using the ATM. But then, USAA refunds all my ATM fees. And I hardly ever use the ATM - maybe twice a month.

[arbusto_baboso]

11. That's how some folks are getting around it. But.....

The cash aid is generally used by my clients for their rent payments. Hence a large, bulk sum withdrawal (or a couple of them) of cash from ATMs.

[Recursion]

3. Robbing the poor is big business

Where's Tyler Durden when you need him?

[Gin]

5. can you do one withdrawal and take all the money at once for one fee?

why would there be more than one withdrawal? I worked for a temp agency who issued these cards if there was no checking account..

[arbusto_baboso]

6. There would be more than one withdrawal because the amount allowed to be taken in 1 transaction....

is limited.

[Gin]

7. hmmm...never thought of that...

[Lisa0825]

8. Here in Texas, when I was on unemployment pay a couple years ago....

it was through a debit card too, and I hated it!

I couldn't get it to work in an ATM, even at the same bank, so I had to go inside to get a teller to withdraw, and if I wanted the whole amount, I had to call the 800 number to ask for the amount.

I complained to the bank manager, and he said it would be much easier if I had an account there. WTF??? This whole scam is just to get them fees and new customers!!! I even wrote letter to state officials to complain about it, but of course no one responded.

[Hannah Bell]

9. knr