Atm Agreement To Help Low Income Families

State Attorney General Spitzer today announced that Citicorp Electronic Financial Services, Inc. (CSI), a subsidiary of Citigroup, Inc., has agreed to provide 149 additional non-surcharging ATMs in low-income neighborhoods in Manhattan, Queens, Brooklyn, and the Bronx. The agreement will greatly expand access to benefits for recipients of cash-assistance welfare benefits.

In New York City, approximately 167,000 families receive welfare cash assistance through the federal Temporary Assistance to Needy Families (TANF) program, which was previously known as Aid to Families with Dependent Children. Recipients are generally poor families with dependent children. The average monthly cash benefit for such a family is $291.00.

"This agreement is a major step toward ensuring an equitable system of distributing cash benefits to the poor," Spitzer said. "New Yorkers whose lives depend on these funds should never have to pay surcharges to receive their benefits, and they should have access to those benefits in their own communities."

Under terms of the Agreement, recipients of the TANF program will have greater and free access to their benefits. The Attorney General's office uncovered that the current electronic benefits transfer program did not provide recipients with adequate free access to cash welfare benefits in New York City, and that recipients were routinely paying surcharges ranging from $1.00 to $5.00 to banks and other operators of ATMs and benefit distribution devices in order to get their benefits.

The TANF system is administered by CSI, under a contract with the New York State Office of Temporary and Disability Assistance (OTDA). Recipients are issued the equivalent of an Automatic Teller Machine card (ATM), which they then use to withdraw benefits. Funds are accessed either through an ATM location that is part of the Quest network, or in stores equipped with devices for point of sale (POS) transactions, such as grocery stores and delicatessens.

The settlement calls for CSI either to place new ATM machines in the affected areas or to contract with the owners of existing machines - such as New York Cash Excahnge (NYCE) banks - to allow recipients to use their machines free of charge. The 149 new locations consist of 30 in Manhattan, 54 in Brooklyn, 52 in the Bronx and 13 in Queens. All 149 new locations will be operational within six months.

The Attorney General commended CSI and OTDA for working closely with his office to address the inadequacies of the current system.

"We are pleased to join the Attorney General and our client New York State to announce that we are voluntarily adding 149 ATMs that will provide free access to benefits for those receiving public assistance," said Pamela P. Flaherty, Senior Vice President of Global Relations for CSI. "This is a huge step in our combined efforts to improve the delivery system using today's technology."

The Attorney General's agreement also requires that:

  • CSI will enter into contracts with numerous non-ATM point of sale (POS) locations - grocery stores and delis equipped to dispense cash benefits - that will require each POS location to dispense up to $100 per transaction without surcharge. CSI also will create and distribute a list of the POS locations.
  • CSI will ensure that at least 25 of the new ATM locations will distribute cash in $5.00 increments, a significant improvement over the current system, and that the rest of the new ATMs will distribute cash in $10.00 increments. Previously, the lowest denomination available was $20.00.
  • CSI will enhance its toll-free helpline to assist recipients, including ensuring that recipients speak to a live person who can help them locate non-surcharging ATMs and provide customer service on access to their benefits.
  • CSI will fund a broad-based educational outreach effort, conducted in several languages, to inform TANF recipients of the new ATM locations.
  • CSI will monitor surcharge fees and ATM usage, and report them to State officials.

The current high rate of surcharging TANF benefit transactions is a direct result of insufficient access to free ATMs in poor and predominantly minority neighborhoods. At present, recipients must either use ATMs that have a surcharge or pay to travel to locations that have non-surcharging ATMs. Also, as the AG's investigation revealed, very few POS locations have been providing TANF recipients with full benefits, without requiring a surcharge or, in the very least, a purchase.

The case is being handled in the AG's office by Assistant Attorneys General Sabrina G. Comizzoli, Hilary Klein, Tynia Richard, Elizabeth C. Yap and Deputy Bureau Chief Mark Peters of the Civil Rights Bureau, which is under the direction of Bureau Chief Andrew G. Celli, Jr.

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