Three of the largest banks in the U.S. are now waiving ATM fees for many public-benefits recipients, according to a coalition of consumer advocates in California.
Bank of America, JPMorgan Chase and Wells Fargo will eliminate ATM fees for Californians who receive benefits via state-issued electronic benefits transfer cards, the California Reinvestment Coalition said this week.
“Ultimately, it is the right thing to do to make sure families get the full use of every dime they need rather than allowing taxpayer funds to be siphoned off to pay ATM fees,” Paulina Gonzalez-Brito, the executive director of the California Reinvestment Coalition, said in a press release. “We hope other banks step up to follow the lead of Bank of America, Chase, and Citibank and that California’s leaders continue to advance policies that ensure access to affordable, non-predatory financial services for all Californians regardless of income.”
The changes are mostly thanks to lobbying efforts by the California Reinvestment Coalition and other consumer advocacy groups. The organization said it had previously persuaded dozens of smaller banks and credit unions, including First Republic and Bank of the West, to waive ATM fees for people using EBT cards in California.
Chase, Wells and Bank of America got on board more recently because those groups also pressured the state’s department of social services to update its contract with its EBT administrator.
When the California Department of Social Services bid out a new contract for an EBT administrator in 2016, it required the new administrator provide free access to two major banks’ ATM networks. FIS won that bid and initially negotiated with Bank of America and Chase for free ATM access. More recently, the company negotiated with Wells Fargo to do the same.
Those three banks together collected nearly half of the ATM fees that EBT recipients pay annually. The group said that EBT card users in the state have collectively paid around $20 million in ATM fees on a yearly basis, and Chase, Bank of America and Wells Fargo accounted for just over $9 million of those fees. According to the organization, public benefits average around $500 per month per family.
Bank of America, Chase and Wells have also decided to waive ATM fees for EBT recipients nationwide.
“We arrived at the decision thanks in part to conversations with consumer advocates and policymakers about the importance of providing free and open access to EBT funds,” a Bank of America spokeswoman said in an email to American Banker. “We have a clear purpose to make the financial lives of those we serve better, and we are committed to ensuring our policies, practices, products and programs all align to this purpose.”
The California Reinvestment Coalition said that Citigroup also waives ATM fees nationwide for people who receive benefits on an EBT card and had already done so prior to this new effort.
The new contract means that California is the first state not to pass on the cost of EBT administration to recipients, the group said.
