State Treasurer Rob McCord and Labor & Industry Secretary Julia Hearthway have announced that more than 430,000 Pennsylvanians who have received unemployment compensation through a debit card will save $3.5 million in fees under new terms of service governing the program.

Pennsylvanians who file for unemployment benefits can have their funds deposited electronically to a bank account or loaded onto a debit card, which they can use for ATM withdrawals and at retail points of sale.

Since it began in 2007, Pennsylvania’s UC debit card program has allowed cardholders to withdraw their funds without incurring fees. Even so, some cardholders have felt penalized by fees associated with using their card - fees that are uncommon to traditional debit card users. Treasurer McCord said Treasury and L&I worked hard to reduce fees under the new arrangement with ACS, the program’s administrator. The result is a structure that will save cardholders millions, which ultimately goes back into the state’s economy.

“Unemployed Pennsylvanians want to return to work, but until they do, they depend on unemployment insurance benefits to help make ends meet,” said Treasurer McCord. “When citizens receive their benefits on a debit card, they should not have to sacrifice their limited funds on high fees or transactional charges. With proper planning, they don’t have to. Our new terms of service with ACS will save cardholders $3.5 million. That’s money that will go back into the economy and serve struggling Pennsylvanians and their families.”

”Making the switch from paper checks to electronic payments will save Pennsylvania taxpayers millions of dollars and it will provide unemployed Pennsylvanians with quick and convenient access to their benefits,” Secretary Hearthway said. “In addition, electronic payments are more secure and can significantly reduce opportunities for fraud associated with the paper check system.”

The debit card program’s new terms allow cardholders three free ATM withdrawals per deposit and unlimited free balance inquiries at nearly 2,500 Pennsylvania PNC Bank and MoneyPass ATM locations. The typical cardholder averages only two withdrawals per deposit, and there are now 200 more in-network ATM locations than under the previous agreement.

MoneyPass replaced Wells Fargo Bank as an in-network ATM system. Its ATM machines tend to be in more convenient locations, such as gas stations and grocery stores.

Treasurer McCord noted that there are many other options to access cash from a debit card, yet avoid additional fees after using the free withdrawals.

“There are many opportunities – and thousands of outlets – to receive benefits without incurring any fees,” Treasurer McCord said. “Aside from the in-network ATMs, cardholders can withdraw cash from the teller window at nearly 5,000 participating Pennsylvania banks or credit unions without a charge. They also could take advantage of the cash back feature when they make a retail purchase. Simply select the debit method of payment, enter their PIN, and select the cash back option.”

Cardholders should have recently received detailed information about the new terms and service options via U.S. Mail and an automated telephone call. Cardholders can also visit www.eppicard.com and click “Pennsylvania L&I” to find information on the fee structure, view transactions, locate an ATM, and download a wallet-sized fee schedule.

While other charges such as the “denial fee” - which users incurred if an attempted withdrawal exceeded available funds - were eliminated, ACS increased fees for out-of-network ATM transactions and for cardholders who make more than seven customer service calls per month. More than three-quarters of cardholders make fewer than seven calls each month. The out-of-network ATM transaction fee increased 25 cents from $1.50 to $1.75.

In addition to saving unemployed Pennsylvanians millions, the debit card program saves the state’s taxpayers millions of dollars. The Department of Labor & Industry began phasing out paper checks as a method of dispensing unemployment benefits in 2007 in order to save on check costs and to decrease fraud.

“Going paperless with unemployment benefits has saved the Commonwealth over $46 million in check costs since 2007,” Treasurer McCord said. “These savings will grow under this new agreement. In addition to the $3.5 million in fee savings to debit cardholders, Pennsylvania will save $10.3 million over the next 18 months by avoiding costs associated with printing and mailing checks.”

The changes announced are in accordance with a 2009 U.S. Department of Labor advisory that called on states to work toward eliminating excessive fees.