Cards replacing cash, checks at state prisons

By Don Chaddock, InsideCDCR editor

Movies depicting inmates receiving a suit, some cash and a bus ticket as they exit a prison couldn’t be further from the truth in today’s world. With advances in technology, inmates re-entering society will now be issued a debit card.

The new process is being phased in throughout the state’s prison system during the 2015 fiscal year.

Walter Mazza, Accounting Administrator II with the California Department of Corrections and Rehabilitation’s Accounting Services, said debit cards are simply easier to handle and help acclimate the newly released inmate with today’s way of making purchases.

“CDCR was looking for a safe alternative to cash which reduces the potential for loss, increases efficiencies and allows the inmate to have ready access to both their release funds and personal funds upon parole or discharge from CDCR,” said Mazza.

The debit card program will also give CDCR greater oversight into the disbursement of funds.

“The use of the debit card will allow CDCR to have an electronic record of every disbursement transaction (from the prison to an inmate). This electronic record will reduce time spent verifying if a previous payment has been made,” he said. “We also eliminate the time-consuming process of multiple cash counts.”

He’s quick to point out federal banking laws prohibit CDCR from tracking transactions once the card has been issued.

“CDCR will not receive a record of the spending activity on the card,” Mazza said. “These funds belong to the parolee and under banking regulations we do not have the right to view this activity.”

Issuing checks often required the inmate to pay fees if he or she didn’t already have a bank account, which many of them do not.

“The inmate will no longer have to pay a fee to cash a check in most cases and will be able to purchase transportation and goods with the debit card, wherever MasterCard is accepted,” he said. “They can receive cash back during a purchase transaction at a point of sale (POS) such as making a purchase at a retailer. They can also utilize over 2,000 ATM locations within California to obtain cash or view their account balance.”

He said inmates, many of them unfamiliar with debit cards or ATMs, will be given some instructions on their use.

“The information should be distributed through posting of notices and the closed circuit TV within the institution,” he said. “They also receive a flyer along with the debit card providing the basic information of the use of the card, how to change the personal identification number (PIN), a toll-free phone number and internet address.”

The issuing of a debit card represents a major change in release procedures.

“Currently inmates receive cash for the amount of their release funds, and either cash or a check for the balance of their trust funds (personal funds),” Mazza said. “Often the inmate does not have an identification card to cash the check, and must utilize a check cashing store and pay a fee. The debit card doesn’t have a fee for most transactions.”

He said there is a small monthly charge to the card if there is still a balance beyond 30 days from the date the card is activated.

“Use of the debit card will allow a single method of payment for most inmates,” Mazza said. “Those with a large balance in their trust fund (over $2,300) will have those funds issued on a check as they exceed the limit of the card. Most parolees have less than $1,000 in their trust account upon release.”

He said the cards will remove cash from the institutions.

“As a result, the numerous and time-consuming cash counts are eliminated,” he said. “Eliminating these cash counts reduces the amount of time spent processing transactions in the institution accounting office, freeing staff to complete other essential work.”

He said the card also represents a stepping stone for inmates who wish to open a bank account.

“They also have the ability to covert this card to a bank account where additional funds can be added,” he said. “Parolees become familiar with the use of technology in financial transactions through using this card, and if they choose, the internet site, to obtain information on the balance of the card.”

CDCR has tested the cards in a pilot program.

“During the pilot, there were no issues with the acceptance or use of the card,” Mazza said.

He said the only problem so far is if the inmate finds himself back behind bars.

“Currently, the department does not have a means to accept the card if an inmate returns to custody, nor do the county jails if the inmate is transferred there, nor do the State Hospitals,” he said. “In these instances, the card is considered personal property and would be handled accordingly.”