Committee hears bill to cap transaction 'junk fees' for school meal payments at 2%

Representative Caldwell told the committee her bill aims to remove burdensome transaction fees that parents pay when adding money to school meal accounts through third‑party vendors. She said some platforms charge as much as $3.95 per deposit and that families with multiple students pay that fee multiple times.

"These are junk fees that make it more expensive for families to pay for school meals," Representative Caldwell said, describing the objective of capping fees and ensuring RIDE provides or recommends a no‑fee option for districts. A witness described the fee as a hidden tax on kids' lunches and urged a cap tied directly to transaction cost rather than profit; another witness said New Jersey has considered similar legislation.

Committee members asked whether vendors also charge school districts and how vendors realize revenue. Testimony indicated vendors often position the platform as cost‑free to districts but recoup costs from parents; the witness said federal rules require districts to offer a no‑fee way to add money and be transparent about fee options.

Indi Andre reminded the committee of federal regulations requiring a no‑fee option for meal accounts and transparency about fees. Representative Caldwell and members said they will follow up to identify contracts and examples of no‑fee options and to consider whether a 2 percent cap and a clear definition of allowable transaction costs are appropriate policy solutions.

The committee took testimony and did not vote on the bill during this session.