California welfare recipients are choosing to access their benefits through ATMs owned by Bank of America, Wells Fargo, JPMorgan Chase and other banks that charge fees to non-customers, transferring tens of millions of dollars from taxpayers to the corporate sector every year.
A new report issued by the California Reinvestment Coalition
says the fees, totaling $19.4 million in 2012 and $18.9 million in 2013, are troubling for multiple reasons.
"This is the public's money that we have collectively decided to invest in low-income families," said Andrea Luquetta of the San Francisco-based Coalition, according to the Los Angeles Times
. "Public investments are being redirected away from what we want it to do."
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Electronic cards issued to nearly all 547,000 families on the CalWORKs program can be used to make four free withdrawals per month at MoneyPass ATMs, part of U.S. Bank, and Department of Social Services spokesman Michael Weston said the state has launched a program to teach them about avoiding fees. Thus far, the program has called thousands of those families with messages warning against the surcharges. Officials point out that direct deposit is also available to families on the program.
"We would like to maximize the limited resources for low-income families," he said. "We're trying to do that by educating them about how to find surcharge-free access."
In total, there are approximately 2,500 MoneyPass, 3,800 Bank of America, and 4,800 JPMorgan Chase ATMs in the state.
Some groups like the California Department of Social Services have tried to persuade banks to lower or abolish the fees, however banks declined, saying the fees are transparent when making a withdrawal.
Weston commented on next year's contract re-negotiation with Xerox State and Local Solutions who manage the CalWORKs program, saying access to ATMs will be "an important factor."
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