OLYMPIA, Wash. – Public records show JP Morgan Chase is collecting more than $100,000 a month in ATM fees from welfare recipients in Washington. But the bank doesn't disclose the fee at the cash machine. This is happening at the same time the state has cut the monthly benefit for families on welfare and individuals in the Disability Lifeline program.
A Chase ATM - Photo by Austin Jenkins
A few months ago Therese McLeod went to her local Chase ATM to take out some of the cash assistance she gets each month from the state. She swiped her Electronic Benefits Card and punched in her PIN. Out came the money and a receipt.
Therese McLeod: "And I looked at the receipt and there was no indication of any fee of any kind."
But McLeod had heard there was an 85-cent transaction fee charged by Chase for ATM withdrawals using an EBT card.
Therese McLeod: "So I went to the library and I looked up the account, which I had never done before and sure enough..."
Her online account showed an 85-cent charge. McLeod is outraged that Chase can levy the fee without warning the cardholder at the time of the transaction.
Therese McLeod: "Sounds like a racket to me. Don't we have laws against that?"
A Chase spokeswoman responds the bank is following a contract negotiated by the state of Washington. That contract has two parts. The state pays a monthly maintenance fee of about $700,000. While the client also pays the 85 cents per cash withdrawal.
The Chase spokeswoman adds it's not "technically feasible" to program the ATM network to warn welfare recipients of the charge.
At Washington's Department of Social and Health Services, Babs Roberts notes EBT clients are advised of the fee when they get their cards.
Babs Roberts: "They are given a brochure and they are told their cash withdrawals, they will be charged an 85-cent fee."
Roberts acknowledges the fee is a burden to poor people living on just a few hundred dollars a month in cash assistance.
DSHS officials recently met with Chase to discuss ways to get the cost of the contract down. In the meantime, the fee is adding up.
In the first four months of this year, Chase collected more than $465,000 in ATM charges from Washington welfare recipients.
As we reported in December, Electronic Benefit Card holders are also racking up hundreds of thousands of dollars in ATM surcharges each month at non-Chase cash machines. Those surcharges totaled more than $890,000 in the first four months of this year.
Advocates for the poor wanted lawmakers to address this issue in the 2011 session, but that hasn't happened.
On the Web:
EBT card information:
Copyright 2011 Northwest News Network