The Electronic Benefits Transfer (EBT) program was intended to automate the delivery, redemption and reconciliation of public assistance benefits.  In California, the EBT program has been designed to effectively distribute CalFresh benefits, Temporary Assistance for Needy Families (TANF), and other cash aid benefits.  The EBT program is tremendously popular, in the case of TANF 96 percent of recipients choose to receive their assistance via an EBT card.  The preference of EBT cards could be attributed to the act that they function the same way a debit/credit card operates.  The card is meant to be a convenient and secure way that may reduce the stigma often associated with public assistance.  The recipients of aid can access their benefits through automated teller machines (ATMs) and at Point-Of-Sale (POS) locations, which are ubiquitous parts of life for many of us.  The State of California touts that there are more than 800,000 locations that clients can use their benefits.

On the surface this has been a well designed program that has established benefits for both the state and the clients.  However, the California Reinvestment Coalition, an organization that advocates for the rights of low-income communities, to have fair and equal access to banking and other financial services, has researched this program and has determined that in 2012 an estimated $19 million was spent on withdrawal fees in California by people using EBT cards [Full Report].

As the California Reinvestment Coalition report states, the ATM fee structure is bad on two levels: it nickels and dimes economically disadvantaged people out of a few dollars every month that are significant in their monthly budget.  And it constitutes a not so-subtle form of corporate welfare.  Additionally, the $19 million paid in fees could have been spent at local merchants directly supporting the local economy and making the communities that use these benefits more attractive to new businesses as they seek out new markets to penetrate.  Many communities that have a concentration of EBT clients are underserved by many types of businesses and they are not often seen as an attractive market.  This additional money being spent one given community could be the tipping point for some new business development in these areas.

To attempt to confront this issue we set out to create a resource for people in Alameda County to avoid these fees until the state develops a banking solution to the EBT program that doesn’t subsidize banks and improves the financial outcomes for its users, like improved credit history.  We set out to reverse the trend that families in Alameda County lost $60,000 in CalWorks funds a month ($720,000 in the year) to ATM fees.

Using the database of store information collected by the Social Services Agency (SSA) and obtained through the Alameda County government data portal, we were able to create this map that allows anyone, EBT clients in specific, to see the locations around them that charge fees and which locations have the resources for them to access their funds without a change.

In addition to the map were able to conduct a small bit of analysis on the data provided by the SSA and found that in Alameda County there are 2,084 locations for EBT clients to withdraw their money, however, 70.2 percent of those outlets charge a transaction fee (see Table 1).  The vast majority of ATMs have a surcharge, 90.8 percent, while the majority of POS, 96.9 percent, locations provide withdrawals free of charge.

Table 1 -- Alameda County: Locations that have a Surcharge

The data provided by the SSA also contained the actual transaction fees that are charged by each location.  Of those locations with transaction fees, the average fee is $2.61 at an ATM with a maximum charge of $4 and a minimum charge of $1. (see Table 2).  In contrast, the average charge at a POS location is $2 with a maximum charge of $2 and a minimum charge of $2.  It may also be important to note that only 12 POS locations in Alameda County have a surcharge fee.

Table 2 -- Alameda County: Surcharge Fees

In the context of the City of Oakland, home to 40 percent of the County’s withdrawal locations, locations, there are 824 locations for EBT clients to withdraw their money, however, 69.0 percent of those outlets charge a transaction fee (see Table 3).  The vast majority of ATMs have a surcharge, 94.6 percent, while the majority of POS, 91.4 percent, locations provide withdrawals free of charge.

Table 3 – City of Oakland: Locations that have a Surcharge

In the City of Oakland, of those locations with a transaction fee, the average fee is $2.58 at an ATM with a maximum charge of $4 and a minimum charge of $1.25 (see Table 4).  In contrast, the average charge at a POS location is $2 with a maximum charge of $2 and a minimum charge of $2.  It may also be important to note that only 3 POS locations in Alameda County have a surcharge fee.

Table 4 – City of Oakland: Surcharge Fees

We don’t know if these fees are completely avoidable without a structural change to the EBT program, but we believe that every county and city should have a resource like this interactive map as they attempt to improve the lives of those who for some period of time lack the financial resources to sustain a basic lifestyle.