Maine legislators want to take money from poor families and give it to big banks

Last week, the Washington Post’s Wonkblog ran a disturbing story about a new law in Kansas that limits the amounts that struggling families can withdraw from their Temporary Assistance for Needy Families (TANF) accounts to only $25 per day. TANF is a federal program that provides regular cash payments to very poor families, which they can use to pay rent, for transportation, or for essentials like diapers. The law’s sponsors claim it will cut down on fraud, but what it will actually do is place a huge time and financial burden on a group that often does not have access to basic banking services, as the Post points out:

“It’s hard to overstate the significance of this action. Many households without enough money to maintain a minimum balance in a conventional checking account will pay their rent and their utility bills in cash. A single mother with two children seeking to withdraw just $200 in cash could incur $30 or more in fees, which is a big chunk of the roughly $400 such a family would receive under the program in Kansas.”

The particularly insidious part is that most of these fees would go directly to the banks that own the ATMs. In other words, these Kansas legislators are worried that poor families would misuse their benefits so instead they want to give the money to some of the same banks that rig foreign currency exchange rates and launder money for international drug cartels.

The bill is part of a national effort to make it more difficult for poor families to receive public assistance and to stigmatize those who do. It’s largely being pushed by the American Legislative Exchange Council (ALEC), a big-business lobby group and “bill mill” that drafts legislation for conservative legislators. Kansas House Speaker Ray Merrick, who helped usher the ATM bill into law, sits on ALEC’s board of directors.

Now, some legislators want to bring this indefensible law to Maine. Senators Nate Libby (D-Lewiston) and Mike Thibodeau (R-Winterport) have each introduced bills to limit how much struggling Maine families can withdraw from their TANF accounts. Those proposals are being considered in the legislature right now.

Photo credit: Curtis Perry

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