State bill would ban ATM fees for unemployed New Yorkers collecting benefits

ALBANY — A Manhattan state lawmakers plans on introducing a new bill Monday that would ban all banks selected by the state to dole out unemployment benefits from charging ATM fees when cash-strapped New Yorkers use their debit card to draw out the funds, The Post has learned.

The state Department of Labor issued thousands of debit cards to people hit hard by the COVID-19 pandemic across the Empire State for unemployment benefits through KeyBank — which won a 2015 state contract to do the job.

But only one branch in all the five boroughs has been open since the pandemic hit, and even there, there’s just one ATM in service.

A May Post report exposed long lines outside the singular Manhattan location on East 22nd Street, a cumbersome routine for those trying to cash in on much-needed assistance funds.

State Sen. Brad Hoylman (D-Manhattan) has now drafted legislation in direct response to the exposé, prohibiting other banks and ATM owners and operators from adding extra fees on top of transfers for those withdrawing benefits with the cards.

“In the middle of a massive economic crisis, every dollar counts. Charging a fee to someone who is already facing financial hardship is adding insult to injury,” Hoylman said in a statement Sunday.

“My new legislation will allow New Yorkers to access unemployment insurance and other public benefits without being charged this nuisance fee. We can’t allow big banks to nickel and dime unemployed New Yorkers.”

If signed into law, it would cover New Yorkers signed up for federal, state or local benefits transferred through state-sanctioned benefit cards, including regular unemployment insurance benefits, occupational training act program benefits, adoption subsidy electronic payments, medical assistance benefits and SNAP food stamps.

KeyBank has already said residents can withdraw the funds at ATMs without extra fees at over 100 AllPoint ATM locations in the City, or they can drive to Westchester branches open in New Rochelle or Eastchester.

But some users told The Post these options were poorly advertised or not communicated when they set up their “Key2Benefits” account with the state.

The bill would take effect immediately if signed into law.

“We’ll review it when it’s introduced,” Rich Azzopardi, senior advisor to Gov. Andrew Cuomo, told The Post of the bill.

New York City’s unemployment rate alone jumped from 15 percent in April to a staggering 18.3 percent in May, according to the most recent state records released Thursday, June 18.

The rest of the state recorded a 11.9 percent rate in May, a decrease from 15.6 the previous month.

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