California Reinvestment Coalition

CalWORKs Benefits Diverted To Paying ATM Fees

Editor's note: In 2015, CRC launched a new, consumer facing website, that has resources for people to identify where they can withdrawal their benefits without paying fees. Please visit the site and share your feedback with us! 

Background: CRC's 2014 report "The $19 million ATM Fee" explained how millions of dollars in Public Assistance funds are being diverted to pay ATM fees in order to access the benefits. The report called on banks, the State of California, local counties, and nonprofit partners to work together to reduce the amount of money being lost to ATM fees through the CalWORKs program, which serves families with children and accounts for about 85% of the ATM fees.

How much in public assistance benefits went to bank ATM fees in 2011?

  • Bank of America: $3.6 million earned in ATM fees charged to CalWORKs recipients during fiscal year 2012/2013, processing 12.43% of CalWORKs transactions
  • JPMorgan Chase: $2.8 million earned in ATM fees charged to CalWORKs recipients during fiscal year 2012/2013, processing 9.02% of CalWORKs transactions
  • Wells Fargo: $2.3 million earned in ATM fees charged to CalWORKs recipients during fiscal year 2012/2013, processing 7.18% of CalWORKs transactions

Solutions: CRC, working with our members and allies, is attacking this problem on several fronts:

1) EBT Vendor: The state of California recently put out a Request for Proposal (RFP) for a new Electronic Benfits Transfer (EBT) vendor. CRC and our allies provided policy recommendations on how the next EBT vendor could reduce the amount of benefits that are lost to ATM fees. We were happy to see that the final RFP included some of our suggestions, including: 

  • increasing access to ATMs by requiring that the vendor offer access to at least two different ATM networks (with the possibility of requiring a third); 
  • requiring bidders to include a plan for how they would reduce out of network surcharges (and the plan was graded as part of the vendor’s overall proposal); 
  • including financial incentives for vendors to reduce the surcharges; and 
  • requiring vendors to use website and mobile app technology to enable EBT users to more easily locate surcharge-free ATMs and information about transactions and fees.

2) Working with Banks to Waive ATM Fees: Some banks have voluntarily agreed to waive ATM fees for CalWORKs and other public assistance recipients. Those banks include Banc of California, Mechanics Bank, City National Bank, Rabobank, and others. Read an Op-Ed by Banc of California CEO about why his bank, along with 13 other banks in California, waive these fees: ATM Fees Drag Down People on Public Assistance

3) Increasing awareness of other options: In May 2015, CRC released a report outlining the results of a survey we conducted with the California Community Colleges CalWORKs Association (CCCCA) and the Alameda County Social Services Agency (SSA).  We surveyed 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. In this survey, 72% of respondents reported not knowing that direct deposit of their benefits into a checking account was an option. CRC supports direct deposit into safe, inexpensive, bank accounts that meet our Safe Money standards, including not allowing overdraft.

4) Local Counties Are Also Taking on this Problem: Alameda County decided to reduce the hundreds of thousands lost in ATM fees by installing fee-free ATMs in their social service offices. Read this Oakland Tribune article for more information: Alameda County to install no-fee ATMs for families in need (Jan 16, 2015).

5) Providing Information on Fee-Free ATMs: CRC launched a mini-website,, which lists resources for recipients to identify fee-free ATMs. Since its launch, we've seen an increase in traffic every month, demonstrating the impact these fees have on people and a strong interest in options to obtain benefits without paying fees.

Want to learn more or get involved?  Contact Andrea Luquetta at CRC (aluquetta AT