Thank you for the opportunity to address this committee on behalf of the Alternative Financial Services Coalition in the north end of Winnipeg.
The north end is an inner-city community and one of the poorest in Canada. Although community members face many barriers and challenges, the people of the north end are strong, resourceful, and carry within them a strong sense of social justice.
Over the past decade, the Alternative Financial Services Coalition has been working with community members to develop financial services that increase opportunities and improve economic well-being. This work has an emphasis on cooperation, education, self-reliance, and social dignity. I'd like to talk to you about how fees incurred by low-income individuals when accessing their own money from ATMs have a negative effect on families and communities.
Before leaving Winnipeg, I stopped by my credit union to withdraw cash. I only withdrew enough to pay for the cab ride to and from the airport. For the rest of my expenses, I was fairly confident that I could use my debit card. I knew, though, that any withdrawals made from an ATM in Ottawa would carry extra fees, because my credit union does not have any branches in Ontario. But this is not the experience of most people in Winnipeg's north end.
In order to speak with you today, I have chosen to travel some distance from my credit union. The ATM fees I would need to pay in Ottawa would be because I left my community. Today in the north end, in other low-income communities in Winnipeg, Manitoba, and in Canada, many individuals and families are paying those same ATM fees not because they've left their financial institutions but because their financial institutions have left them.
In the past, there were mainstream banks at most major intersections, but those branches closed. Sometimes the banks left an ATM. In many cases the branches sat vacant, but they're not vacant any longer. Payday lenders, cheque cashers, and other fringe financial institutions now occupy those buildings. White label ATMs are sometimes the only access that individuals have to their money.
They're left with some unattractive choices. They can travel by bus for miles, often with children and strollers, to the nearest bank branch. They can use the nearest ATM, which may not belong to their financial institution and will involve extra fees, or they can give up on having a bank account and settle for the unfair charges and fees of the many neighbourhood cheque cashers. Low-income families should not be forced to make a choice of the lesser of three evils.
Communities like Winnipeg's north end are for the most part still operating in cash. When individuals are withdrawing cash from an ATM, it's generally in smaller amounts, such as $20 here and $20 there. For smaller separate withdrawals, ATM fees account for a much larger percentage of the withdrawal amount. Some could argue there's an easy solution: one could make withdrawals of larger amounts and make fewer of them. But encouraging this would discourage the act of saving and would increase the risk of robbery and assault.
For many Canadians, easy access to our money through bank branches and ATMs anywhere at any time is a basic convenience. However, for low-income communities, white label ATMs are often all that's left. Having to pay a high fee to access their own savings is simply a harsh reminder of what was lost when banks abandoned their neighbourhoods.
But there are opportunities to turn things around. In the north end, community members, the Alternative Financial Services Coalition, and community-based financial institutions such as Assiniboine Credit Union are testing a model of providing financial services that are affordable, accessible, and appropriate to the unique financial needs of the community, including financial literacy, special accounts, and microloans.
But for now, it will only help some of the people in one of Winnipeg's low-income neighbourhoods. We need to address this issue for all low-income Canadians. ATMs fees should not be a barrier between families and their savings.
Thank you for your consideration.