Low-income Americans won’t pay ATM fees at these big banks — and it’ll save families millions of dollars


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Bank fees can quickly add up and take a bite out of the earnings from your savings or interest-bearing checking account.

Fortunately, some of the country’s lowest earners will no longer be charged for withdrawing cash from an out-of-network ATM.

Nationwide, consumers with state-issued EBT cards won’t be charged a fee for using an ATM belonging to Wells Fargo, Chase or Bank of America — even if they’re not customers of those banks. ATM surcharges are already waived for EBT benefit recipients who use Citibank ATMs.

“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,” says a spokesperson from Bank of America. “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 policy adjustments follow years of work put in by groups in California and across the nation known collectively as “The EBT Avengers.”

“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,” said Paulina Gonzalez-Brito, executive director of the California Reinvestment Coalition in a press release. “We hope other banks step up to follow the lead of these banks and that California’s leaders continue to advance policies that ensure access to affordable, non-predatory financial services for all Californians regardless of income.”

Burdensome ATM Fees

ATM fees are surging. A recent Bankrate survey found that the average cost of pulling money from an out-of-network ATM ($4.68) is 36 percent higher than it was in 2008. The average ATM surcharge (the fee charged by ATM owners) hit the highest level for the 14th year in a row.

ATM fees are higher in certain areas than in others. For example, among 25 large U.S. markets, Detroit has the highest average ATM fee ($5.28).

Graph: The average total cost of an out-of-network ATM withdrawal is $4.68.

In California, ATM fees cost EBT recipients millions of dollars each year, according to data from the California Reinvestment Coalition.

“If we know that in California it’s $20 million a year that was going out of the pockets of the poor to line the pockets of the richest banks, what does that look like nationally?” asks Jessica Bartholow, a policy advocate with the Western Center on Law & Poverty.

Compared with their wealthier counterparts, lower-income Americans are more likely to spend money on bank fees. The most common minimum balance to avoid monthly maintenance fees, is $1,500 — a high ceiling for many poor families. In a Bankrate survey from late 2017, nearly 1 in 3 respondents earning less than $30,000 reported paying monthly fees associated with their primary checking account (including ATM fees, regular service charges and overdraft fees).  Just 18 percent of Americans earning more than $75,000 said they paid those kinds of fees.

Other obstacles

Slashing ATM fees is a good start, but there’s much more work to be done to make banking less costly for the poorest Americans.

Bartholow points out some of the problems low-income families could face just for having a bank account. All of the money they have in their checking accounts, for example, could be taken at any time and used to cover old debt.

“Making banking safe and affordable for everybody should be a goal. I think waiving the bank surcharge fees for public benefit payments is part of that,” Bartholow says. “Adding some level of protection from bank levies for debt is another piece of that. Also, making sure that people have the right to direct deposit. Not every state allows that for public benefits.”

While they won’t be charged for using ATMs at some of the biggest banks in America, EBT cardholders will have to be careful when using other ATMs. Plan ahead so you have plenty of cash. Look for surcharge-free ATMs or choose a bank that reimburses you every month for out-of-network ATM fees.

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