Preserving free access to money in your account

A key priority for the CFPB is preserving relationship banking in an era of increasing digitization. Over the last year, we have been carefully studying trends in how people access cash and coins. While our banking system was designed for people to access their own cash for free through their own bank or credit union, the CFPB has found that people are paying more for their cash, not only at out-of-network ATMs, but also at places like grocery stores and retailers that previously provided access for free.

Our financial system is critical infrastructure for our economy and society. It’s what facilitates the movement of money in all its forms, enabling us to save and transact with one another. Most of the money we use today consists of deposits in our insured bank or credit union accounts, and we typically access it through swiping a debit card, using online bill pay, or linking our bank account to a payment app.

But physical cash is still a critical component of a resilient financial system and dynamic economy. For many people, particularly older Americans and lower-income consumers, cash is the preferred way of paying for things. Many people enjoy the privacy afforded by cash at a time when we are increasingly surveilled online. In addition, a software failure at a single technology company recently reminded us of the reliability of cash in the face of a digital systems disruption or other catastrophe. In the event of a major cyberattack on our nation’s energy, telecommunications, or banking infrastructure, we must be prepared for people and businesses to buy and sell goods and services in cash.

However, in many parts of the country, people can struggle to find easy and free access to their own cash. In our discussions with elected officials from small towns and rural areas, they’ve described the impact of the last bank branch closing or how services degraded after a bank merger. We heard how people in these communities encounter high fees to withdraw cash, small businesses struggle to make change in cash transactions, and there are fewer safe places to make cash deposits.

Against this backdrop, retailers are stepping in to fill a void left by the banking system. While retailers have typically offered cash-back when using a debit card as a free convenience for their customers, new research from the CFPB highlights how some large retailers, especially dollar stores, are now able to charge fees to their customers for this cash back.

While digital payments will continue to grow in volume, access to cash continues to be critical. The CFPB will be working to ensure that consumers and business across the country can have a free option to access their own money.