This article originally appeared in the September-October 2002 issue of the Children's Advocate, published by Action Alliance for Children.

Grassroots Snapshot

Families on welfare win checking accounts

By Erica Williams

In 1997, Los Angeles County stopped mailing welfare recipients their checks. More than 250,000 families had to get checks through 44 "check cashers," which charge between $6 and $12 to cash them. Families wait for hours to cash their checks, then walk away holding all their money and food stamps for the month.

"Every time I would cash a check and see money taken out, I kept thinking about the shoes I needed for my sons," says Greta Smith, mother of three boys.

Then in 1999, Smith and more than 50 other parents on welfare participated in a successful campaign to get welfare checks deposited directly into special bank accounts. First, they persuaded L.A. County to create a direct-deposit pilot program and Washington Mutual Bank to offer special accounts. Then in 2000, advocates won a state law requiring most counties to make direct deposit available to welfare recipients. The campaign was organized by Strategic Actions for a Just Economy (SAJE), an economic justice organization where Smith now works as a peer trainer.

First step: evidence

First, welfare recipients and other volunteers recorded observations from the check-casher lines. "People were standing in long lines for hours with their children," says Haleemah Henderson, SAJE's Banking Rights Program coordinator. Because not all checks are available on the first of the month, many people receive late charges on bills. "I was evicted from my apartment because of the late fees," says Smith, "and the eviction notice on my record caused me to be homeless for two years."

"We held the county responsible," says Henderson. The check cashers "separate people from the financial mainstream and force poor folks to pay more" than people with bank accounts.

Pilot project

SAJE took these observations to L.A. County welfare officials, who agreed to create a pilot direct-deposit program for 1,500 welfare recipients. Then SAJE staffers and welfare recipients sat
down with the president of Washington Mutual Bank and negotiated the nation's first welfare-to-work bank account, providing a debit card, five free money orders each month, and other benefits. These accounts "allow people access to savings, credit, and eventually loans," says Henderson.

Direct deposit for all

But "we didn't want to stop at the pilot program," says Henderson. Parents on welfare participated in SAJE workshops on how to approach legislators. They also encouraged their children to write letters and create art projects describing their experiences in check-casher lines. The kids created a banner that the parents and children took to Sacramento and presented in a press conference to Senator Martha Escutia(D, LA), who authored the bill. "Our children were involved and had a true voice about what was happening to them," says Brenda Muhammad, SAJE training coordinator, whose children went with her to Sacramento. The families also visited legislators and testified at a committee hearing.

"The welfare recipients played a vital role in getting Senate Bill 962 passed," Escutia says.

Peer education

Nine women who were active in the fight for direct deposit now staff SAJE's peer education program. They help others sign up for direct-deposit accounts and teach them the basics of banking, like balancing a checkbook and reading a bank statement. "I have the opportunity to help people avoid the situation I found myself in, and it's easy because I lived it," says Muhammad.

"I can pay my bills on time now," says Smith. "I have a checking account and can start building a life again."  

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