Daphne Tanellus is still in eighth grade in Lauderhill 6-12 magnet school — but she signed up this week for a free checking account.

She thinks it will help her save as she looks for a summer job before she enters high school.

"Anytime I get money I lose it or I spend it," she said as her older sister, Courtney Wheatt, signed paperwork to be on Daphne's new account. "I want to save it."

It's part of Lauderhill Mayor Richard J. Kaplan's initiative to encourage many of his constituents — no matter how young — to open a bank account to try to save money as part of a new program called Bank On Lauderhill. He has helped recruit eight banks and a credit union to offer free or low-cost savings and checking accounts to those who don't have any accounts and resort to using check-cashing outlets, pawn shops and other expensive alternatives.

It's modeled after a successful San Francisco program that persuaded many to open bank accounts to help them establish credit and cut back on costly financial transactions.

More than half of Lauderhill residents have no checking or savings accounts or frequently use alternative expensive financial services, like check-cashing stores, Kaplan said, citing data from the nonprofit Corporation for Enterprise Development. Many are suspicious of banks; some have been burned by big bank fees or think they don't have enough to open a bank account, he said.

But over their lifetime, the "unbanked" can spend thousands of dollars in fees just to cash a check if they don't have an account, he said. "That's a big chunk out of their paycheck."

Participating institutions in the Bank Of Lauderhill program say they show people how to save money and will give tips on financial management so people can avoid bouncing checks and incurring costly fees.

"We'll show how to budget, how to make sure you have money at the end of the month," said Lucy A. Carr, a PNC Bank vice president and community consultant based in Palm Beach County.

She is helping to lead the new program. So far it's the only one in South Florida, although there has been interest in starting a similar initiative in Palm Beach County, Carr said.

"I'm hoping other cities will adopt the program" in South Florida, Kaplan said.

But people don't have to live in Lauderhill to sign up for Bank On Lauderhill's free or low-cost bank accounts, he said.

In addition to PNC, other institutions signing on for the Lauderhill program are TD Bank, Suntrust Bank, Bank of America, We Florida Financial Credit Union, Florida Community Bank, Wells Fargo, Bank United and BB&T Bank.

For more information, go to bankonlauderhill.com.

Bank on Evansville will launch of a series of informational workshops in 2015 designed to help residents save money.

The first workshop “Solutions to Savings: Flushing out your water and sewer utility bill” will take place March 11 from 5:30-7 p.m. at United Way of Southwestern Indiana, 501 NW 4th St.

The workshop will provide representatives of the Evansville Water & Sewer Utility with an opportunity to review new water and sewer billing statements and discuss new payment options for utility customers. Utility officials will also provide tips for conserving water and will share information on how to reduce water usage by checking pipes and toilets for leaks.

For more information on Bank on Evansville, the Solutions to Savings workshops or upcoming Bank on Evansville classes, visit bankonevansvilleswi.org or call 2-1-1.

According to Virginia Beach, over 6,000 City households are “unbanked” – they do not have a bank account. They spend up to 5% of their yearly net income to cash their paychecks and pay their bills. Over 30,000 of Virginia Beach households are “underbanked” – they have a bank account, but continue to use check-cashing services, payday loans, rent-to-own stores and pawn shops for financial needs.

In 2012 a change began. Bank On Virginia Beach began to partner with banks, credit unions and volunteer community organizations to offer free one-on-one coaching and money management classes including budgeting, managing a bank account, credit score improvement, debt payment and savings.

Part of a national initiative, Bank On programs are locally-led coalitions that seek to help improve the financial futures of unbanked and underbanked people. Visit www.joinbankon.org for more information.

The average unbanked worker spends an estimated $40,000 throughout their life just to cash their paychecks.

Lori Irwin, Financial Empowerment Program Coordinator for the City of Virginia Beach says, “Our main goal is to change behavior by breaking old financial habits.” Participants in the 10-month program attend a class plus a counselling meeting every month.

Program results show positive changes for the 125 to 150 participants in each of the three annual sessions. Irwin noted that plans are being made to expand the program to other Hampton Roads cities in the future.

Boleman Law congratulates the Virginia Beach Bank On team including the volunteers and participants for the ongoing success of the program. Keep up the good work.

Since 1991 we have supported programs like Bank On and helped more than 106,000 Virginians regain their financial health. We will help you.

Known primarily as number crunchers and tax collectors, treasurers for state and local governments traditionally were limited to activities like processing payrolls, managing budgets, safeguarding pensions and being the target of accountant jokes.

But in recent years, some of these workaday officials have taken on a role as public visionaries, pushing through experimental policies aimed at lifting the fortunes of low- and moderate-income families.

In San Francisco, an effort by the treasurer, Jose Cisneros, to give poor people free or low-cost bank accounts has been replicated in more than 100 cities. Emulating another San Francisco initiative, Nevada’s treasurer, Kate Marshall, developed the first statewide college savings account s in the nation for every child entering kindergarten in the public schools. And in Chicago, Stephanie Neely, the treasurer, has introduced a financial literacy curriculum in public schools.

“This is a new phenomenon with treasurers being involved in improving financial lives,” said Heidi Goldberg, a program director with the National League of Cities.

Long before Mayor Bill de Blasio of New York gained national attention for making the “inequality crisis” the centerpiece of his administration, treasurers in other locales began quietly pounding away at stabilizing and building the assets of lower-income households.

“A movement has been percolating, and state and city treasurers are driving it,” said Andrea Levere, president of the Corporation for Enterprise Development, a nonprofit organization in Washington financed by banks and foundations. And while most of those pushing the boundaries of the office are Democrats, she said the initiatives they are pursuing have proved popular in both red and blue states.

Chief among the pioneers is Mr. Cisneros, whose “aha!” moment came in 2005 when, as a newly elected officeholder, he offered a financial sweetener to entice poor working families to apply for the federal earned-income tax credit. After proudly sending nearly 10,000 checks to taxpayers, he was brought up short when he learned that about half of the recipients did not have bank accounts, forcing them to lose a chunk of their bonus to exorbitantly priced check cashers.

“That really gave me an instant education,” he said.

With advice from the New America Foundation, a center-left policy research organization, Mr. Cisneros started the Bank On program to help people on the financial fringes open bank accounts and develop credit histories. The model spread across the country, leading the Treasury Department to conclude that Bank On has “great potential” to “create a nationwide initiative that attends to the needs of underserved families and works to eradicate financial instability throughout the country.”

In 2010 Mr. Cisneros started Kindergarten to College, a program that automatically opened a bank account with $50 ($100 for low-income families) for every kindergartner in public schools. The city pays for the administration and initial deposits, while corporate, foundation and private donations provide matching money to encourage families to save more.

Continue reading the main storyContinue reading the main storyContinue reading the main story“This was something where the treasurer’s knowledge and capability really made the difference,” Mr. Cisneros said.

His office had to figure out how to open bank accounts for thousands of children without Social Security numbers or parents’ signatures. He approached the state’s tax-free college savings program known as 529 accounts, but was told regulations forbade that arrangement.

So Mr. Cisneros invented his own model that involved setting up a master custodial account similar to those used by trusts — something he was aware of only because of his banking background.

“What do treasurers do all day?” he asked rhetorically. “We handle money.”

Reid Cramer, director of the asset-building program at the New America Foundation, said these programs “wouldn’t have gotten done without somebody getting committed to making a difference within bureaucracy and innovating a bit on that terrain.”

Richard Cordray, who was a county and state treasurer in Ohio before becoming director of the Consumer Financial Protection Bureau in Washington, also used the office as a policy laboratory.

As Franklin County treasurer, Mr. Cordray established one of the state’s first land banks in 2004 to redevelop foreclosed properties that could not be sold at auction. And instead of seizing homes owned by older residents who had fallen behind in their property taxes, Mr. Cordray put them in touch with social services like Meals on Wheels and providers of prescription drug discounts to help them regain their financial footing

“Our new initiatives arose entirely out of our experience with community needs and a strong desire to find ways to meet those needs,” Mr. Cordray wrote by email. “But I have come to think that the biggest and most important challenge of all is financial education and financial capability, which affects people all across the economic spectrum.”

In Nevada, Ms. Marshall has built her financial education initiatives around women. For the last three years, she has organized Women’s Money Conferences, where participants can get a year of monthly follow-up sessions with a financial coach.

“How your mother deals with money is how you understand money,” she said. Now a candidate for secretary of state in Nevada, Ms. Marshall said treasurers’ activism was in part “precipitated by the financial crisis.”

David H. Lillard Jr., Tennessee’s treasurer, said the driving force behind his office’s work has been a desire to increase the state’s college graduation rate. Last month, his office started offering 4-to-1 matches (with a limit of $500) to low-income families who deposit money in the state’s college savings program.

A Republican elected to the post by the state’s General Assembly, Mr. Lillard said that in the coming months, car owners will be able to renew their tags free or at reduced cost in exchange for opening a college savings account. The savings and financial literacy programs have widespread support among Democrats and Republicans in the state legislature, he said.

St. Louis’s treasurer, Tishaura O. Jones, credits the wave of innovation in part to federal regulations that require banks to reinvest in communities. “Banks are some of our best partners,” she said. Ms. Jones, who took office last year, won approval from local lawmakers this spring to create a financial empowerment office. “I noticed that no other citywide office even had this on their radar at the time,” she said.

A college saving account program for children, based on San Francisco’s model, is to begin next fall. Ms. Jones said she hoped to help pay for it with parking fines and fees. Her idea is to use something people hate to pay for something they could love.

Ready to learn something new, or just want to brush up on your personal finance knowledge?

Bank On Roanoke Valley is back from its summer vacation with new -- and free! -- workshops.

Here's the fall schedule so far (check the organization's website for workshop cancellations or additions):

For full class descriptions or to RSVP in advance (which is optional), click here.

Note: Classes marked ** in the list are not open to the public and are reserved for employees of nonprofit organizations. If you qualify and are interested in attending one of these workshops visit the website linked above for more information.

An initiative designed to help households in Louisville improve their financial stability is celebrating its fourth year.

Louisville Mayor Greg Fischer will join local banks, credit unions and other community partners to celebrate Bank On Louisville on Wednesday, Aug. 13, at 10 a.m. at Metro United Way, 334 E. Broadway.

The program, launched in 2010, allows low-to-moderate income families connect to free or low-cost checking accounts, according to the release. Bank On also provides financial education programs for budgeting, debt reduction and credit building workshops.

The initiative was launched, in part, to bring low to moderate income individuals back into a traditional bank to avoid the cycle of high-cost check-cashers and predatory lender, according to a news release.

"For a majority of Louisvillians, a task like cashing a paycheck or making a rent or utility payment is quick and easy, by check, by card, or by ATM," Fischer said in the release. “But for someone without a checking account, turning a paycheck into cash or sending that cash in a money order to pay a bill is an entirely different picture. A bank or credit union account can also be the first step in money management, building credit and planning for the future."

For fiscal 2014, 3,257 new checking accounts were opened, according to the release. Seventy percent of accounts have remained open, with an average quarterly balance of $1,363, and 6,532 people have participated in financial education programs.

Nineteen banks and credit unions and more than 100 community organizations have partnered in the initiative, according to the release. Eight of those financial institutions will receive special recognition Wednesday, including Fifth Third Bank Kentucky, PNC Bank, BB&T, Autotruck Financial Credit Union, Central Bank of Jefferson County, Jefferson County Federal Credit Union, Old National Bank and Your Community Bank.

As part of the event, Fifth Third will have its E-Bus, a mobile banking center with free credit counseling, help viewing a credit report or opening an account and job search counseling, on site from 10 a.m. to 2 p.m.

MOBILE, Alabama – A collaboration of financial institutions and community organizations in an eight county area in South Alabama aims at reducing the number of people who do not have checking or savings accounts.

The "Bank On South Alabama" initiative, which is mirrored after similar programs in cities around the U.S., brings together institutions willing to provide checking and saving account options to an underserved population.

Sandra Dunaway, co-chairwoman of the Bank On South Alabama steering committee, said the goal is to reduce the number of people without a bank or those underserved with banking options – those who rely on alternative financial services such as payday loans – by 10 percent by the end of 2015.

$40,000 -- The amount of money a person can lose during a lifetime of paying fees and interests to use an alternative financial service."The under-banked and unbanked are 30,000 in the Mobile area that are relying on alternative checking services," Dunaway said during a Thursday news conference at Mobile's Government Plaza. "As a result, they are giving up much needed and well-earned cash."

The collaboration consists of 18 banks and credit unions and 18 community organizations such as the Center for Fair Housing Inc., Goodwill Easter Seals of the Gulf Coast, FDIC, and United Way 2-1-1.

"The community partners' main function will be to refer their clients they are working with to the initiative and explain it to them," Dunaway said. "We want the trusted people to share with (the consumer) that it's OK (to open an account at an established financial institution)."

The initiative will be rolled out in Baldwin County next month. Similar programs will be introduced this year in Washington, Escambia and Clarke counties.

Birmingham's Bank On initiative was unveiled last year.

The effort is modeled after one started in San Francisco in 2006 that includes financial education combined with counseling, low-cost checking and savings accounts, and electronic pay solutions. The San Francisco program became a national model, and now more than 80 cities have a similar initiative.

Individuals who have had a bank account closed or bounced checks more than six months ago can be eligible for the program. Here's how you get started:

The participating banks offer free checking and/or second chance accounts. Initial deposits are fairly low in many cases.

For instance:

"All of them have these (second chance or free checking) accounts," Dunaway said. "It's the promotion of them and the willingness (of the financial institution) to make a public stance to say they are welcomed and that we want you to come back."

Dunaway said the participating institutions are training front-line branch staffers on what should be done to develop relationships with the unbanked and under banked.

"We've been told the reason they go to payday loans is because they know them by name," she said. "So it's about developing those relationships."

Mobile Mayor Sandy Stimpson said the initiative is something he believes can help increase the quality of life in the city.

"If you are depending on check cashing services and payday loans, you don't end up with much disposable income," he said. "It should end up giving those who are taken advantage of to have more disposable income. This is a great step forward."

Mobile County Commissioner Merceria Ludgood said the Bank On approach is more "positive" compared to having the government take action against payday loan and quick cash operations.

"We've tried the route of putting those businesses that charge high (interest rates) but with little success," Ludgood said. "This is a more positive approach."

A new program is helping men and women get on a healthy financial path and stop paying fees for simple transactions like cashing checks.

The program, Bank On Treasure Valley, enables participants who have never had checking or savings accounts to set them up at local banks after taking five free classes on financial literacy.

The program launched last summer. Four people have already graduated. More than 50 people are currently enrolled.

Bank On is a communitywide collaboration among Washington Trust Bank, United Way of Treasure Valley, the Idaho Department of Finance and many other financial institutions.

The program, say organizers, seeks to solve a critical problem in the community. Without a checking and savings account and a relationship with a reputable bank, “unbanked” families have a hard time building savings and assets, not to mention establishing credit.

People without bank accounts often rely on costly “alternative services” (payday loans, check-cashing businesses, rent-to-own agreements, pawnshops, car title loans, etc.) Such services generally charge fees or operate with high interest rates.

The issue is pressing for low-income families. Forty-three percent of American households with a yearly income below $30,000 are either unbanked or underbanked. And here’s a sobering statistic: the average man or woman without a bank account spends 10 percent of his or her net income on alternative financial services.

Visit the Bank On website to register for the program, or contact program organizers at bankon@unitedwaytv.org or call 336-1070, ext. 100.

The city of Shreveport has signed on to a nationwide initiative to encourage residents to open checking accounts and use them to their full advantage, even if they’ve had banking problems in the past. Bank On Shreveport aims to help local residents move toward financial stability and reduce the reliance on high-cost check cashers and payday lenders, according to Ebony Mapp, the city’s economic development special projects manager.

“It’s a real loss for our community. It’s those types of services -- some of them are predatory -- that can dilute the wealth of a city," Mapp said.

Bank On Shreveport has partnered with 13 local banks and credit unions to offer affordable checking accounts that meet Bank On standards. Some criteria: Banks can’t charge more than $12 a month for the account, and a minimum opening balance can’t top $100. Mapp said more than 25 percent of Shreveport’s population is what’s called "under-banked." They hold a checking account but still rely on payday lenders and pawn shops for basic financial needs.

“We don’t want people to just go get bank accounts. We want people to get bank accounts, know how to properly use them, and change their financial future," Mapp said.

The city aims to have 2,700 Bank On accounts open over the next three years. The city is hosting a family fun day at Bill Cockrell Park on Saturday, Nov. 2, from 10 a.m. - 3 p.m. to celebrate the launch of Bank On Shreveport. The 13 banks will be there, and Mapp said people will be able to open checking accounts on the spot.

Click here to listen to the story.

Bank On Bluegrass, an initiative of the United Way of the Bluegrass, is officially launching.

Bank On Bluegrass is a community-wide partnership designed to help individuals open bank accounts and develop money management and savings plans by promoting financial literacy and improving access to mainstream banking services for low to middle-income individuals and families.

In partnership with local financial institutions, governments, schools, universities and social service agencies, the initiative will help individuals learn more about their money and move away from using high-cost fringe financial services.

“This program is a critical addition to United Way’s continuum of work to help promote financial stability among families and individuals in Central Kentucky through innovative ventures and approaches. Whether an individual lives in the city, on a farm, or anywhere in between, a bank account is the first step toward saving money, gaining assets and building financially stable families,” said Bill Farmer, president of United Way of the Bluegrass.

The program will help reach the nearly 25,000 “unbanked” and 50,000 “under-banked” households in Fayette and surrounding counties in Central Kentucky. “Unbanked” means a household has no checking or savings account and does not access mainstream banking services; “under-banked” means the household has an account, but continues to rely on alternative financial services like check cashing services, payday loans, rent-to-own agreements or pawn shops.

Joey Mills, senior vice president at United Bank, said, “Bank on Bluegrass will have a positive impact on all aspects of our community, allowing the unbanked and under-banked to become a part of our community as well as help them stabilize their financial future. Many Central Kentuckians are managing their finances largely outside the financial mainstream, having to rely upon costly, fringe products and services to cash their paychecks and often times pay their bills. Bank on Bluegrass will make it possible for families to stabilize their family finances and build productive, financially independent futures.”

Participating banks and financial education partners for Bank On Bluegrass, include:

Bank On Bluegrass will offer participants:

To learn more about Bank On Bluegrass, visit here.

People living in one in 10 households in Amarillo rely on cash or high-interest charging alternatives — rather than banks or credit unions — for access to money, according to research used Monday to launch Bank On Amarillo.

The new program, modeled after one begun in 2006 in San Francisco, aims to help the “unbanked” or “underbanked” open accounts and learn how to manage money, control debt and increase wealth, said Smith Ellis, chairman of the Bank On Planning Committee and president of FirstBank Southwest.

Research from the Bank On website shows about 7,160 unbanked households and 16,476 underbanked households in the Amarillo Metropolitan Statistical Area — Potter, Randall, Armstrong and Carson counties — out of a total of nearly 70,000 households.

“Households without an account may spend a significant amount of money on financial services for which most Americans pay little to nothing,” the Bank On website said. “The average full-time worker without a bank account can spend $40,000 over the course of his or her lifetime just to cash paychecks.

“In addition, those without an account don’t have a safe place to store their money, which makes them more likely to be victims of theft and unable to safely access money during emergencies.”

The Amarillo Area Foundation launched Bank On Amarillo in partnership with Amarillo banks, credit unions and community nonprofits. State and national partners include the Financial Deposit Insurance Corp., Federal Reserve Bank of Dallas, Opportunity Texas and “Raise” Texas.

Bank On Amarillo grew from an Amarillo Area Foundation community asset coalition formed in 2012 to address the development of programs to increase pathways to individual and family economic security, a news release said.

Under the program, even those with a troubled banking history will have the ability to open an account with one of the participating financial institutions: Amarillo National Bank, Citizens Bank, FirstBank Southwest, FirstCapital Bank of Texas, First United Bank, Happy State Bank and The People’s Federal Credit Union.

To do so, they must undergo Benefit Bank screening to see if they qualify for state or federal aid, attend three 90-minute financial education classes and present a certification of completion to the participating institution, according to a Bank On Amarillo brochure.

Those who join in the program will be able to open a checking or savings account with a deposit of $25 or more.

The accounts begin as debit-card-only accounts, with no overdraft protection, until a six-month trial period expires, Ellis said. Account-holders will be able to use direct deposit.

Lilia Escajeda, a current Amarillo city commissioner and former banker, serves as Bank On Amarillo project coordinator. Escajeda focused on programs aimed at the unbanked population when working as federal Community Reinvestment Act officer for Amarillo National Bank, she said.

More than 30 people have volunteered to be trained as financial educators for the program, Escajeda said. Presentations will be made at businesses, churches, community centers and wherever they are invited, she said.

“We have to go where the people are,” Escajeda said. “We can’t make them come to us.”

The plan includes efforts to ensure services can be explained in Spanish and other languages, she said.

The program could be expanded, in the future, to other Texas Panhandle communities, Ellis said.

Initial funding came via a $15,000 challenge grant from Opportunity Texas and combined gifts of $52,000 from Amarillo National Bank, FirstBank Southwest, Xcel Energy, First United Bank, Happy State Bank, Amarillo Area Chapter of Credit Unions and the area foundation.

Definitions

Unbanked: An individual or household with no checking or savings account

Underbanked: The individual or househould has an account but continues to rely on alternative financial services, such as check-cashing services, payday loans or pawn shops.

Source: Corporation for Enterprise Development

Why don’t people have bank accounts?

There are many reasons why individuals do not have a transaction account in a financial institution or opt to use alternative financial services even if they do have an account. A Federal Deposit Insurance Corp. survey identified some common reasons:High costs or the perception of high cost: Many individuals believe they do not have enough money to maintain an account and are often deterred by “hidden” fees such as high minimum balance requirements, monthly service charges and overdraft fees.

Convenience: Banks are often not accessible to low-income individuals due to limited hours of operation and the lack of branches in some low-income neighborhoods.

Need for immediate access to funds: For those residents not using direct deposit, a check deposited into a checking account can take several days to clear.

Lack of knowledge: Many individuals lack sufficient financial knowledge to navigate through the often complicated mainstream financial system.

Identification requirements: Residents may believe they cannot open an account because they do not have a U.S.-issued driver’s license – a common misconception among recent immigrants.

Previous banking problems: Individuals may be barred from opening an account due to mistakes they made in previous banking relationships.

Overall perceptions of banking: Many low-income residents are distrustful of banks, have a cultural history of not using banks or simply hold a general belief that banks are not for them.

The Amarillo Area Foundation will launch its Bank on Amarillo program Monday at the East Branch Library.

Bank On Amarillo is a finanacial assest building program focused on the unbanked and underbanked. Research shows 10-20 percent of the Amarillo population is unbanked and an additional 25-30 percent is under-banked.

The Bank On program started in San Fransisco, and has expanded across the country. It is now active in most major Texas cities. The program seeks to provide access to banking products to individuals and families who need it. Initial funding for the project will come from a $15,000 challenge grant from Opportunity Texas, plus a combined gift of $52,000 from area donations.

There may seem to be ATMs on every corner nowadays, but check-cashing stores still rule the urban landscape. Banking access remains a problem for low- and middle-income families in cities, as more than 35 million Americans rely on pricy alternatives to the local credit union. But two grassroots programs in Seattle and San Francisco have spawned a nationwide effort to give under-banked households affordable banking.

The JPMorgan Chase Foundation has teamed up with the Cities for Financial Empowerment Fund (CFE) for Bank On 2.0, a program to bank the unbanked. In 2005, one in five of San Francisco adults and half of the city’s black and Latino residents didn’t have a bank account, according to the New America Foundation. Unbanked residents said they paid between 2 and 5 percent of their incomes cashing paychecks.

Then-mayor Gavin Newsom and City Treasurer José Cisneros launched Bank On San Francisco with non-profit partners and 15 local banks and credit unions. In its first two years, the program got 10,000 people to join banks. More than 70,000 accounts were open and active within the first five years.

Seattle followed suit in 2007, and in 2010 the White House created a national initiative for unbanked Americans, called Bank On USA, and allocated $50 million to the program. Now, Bank On 2.0 is using a $1.15 million seed grant from JPMorgan Chase and raising matching funds to help CFE tailor a national approach to secure affordable banking in cities.

“Thirty-five million people are managing their finances largely outside the financial mainstream, having to rely upon costly, fringe products and services to cash their paychecks and pay their bills,” Jonathan Mintz, president of the CFE Fund and commissioner of the New York City Department of Consumer Affairs, said in a press release. “This makes it practically impossible to stabilize their family finances, let alone build their futures.”

Bank On 2.0 hopes to remedy that by giving low- and middle-income families access to banking. It’s not a pie-in-the-sky idea, either. Building on the success of Bank On in San Francisco and Seattle, the idea is to create best practices, infrastructure and technical support based off what was learned in the pilot programs. As the New America Foundation wrote in 2011, “The Bank On approach demonstrates wide-ranging, bipartisan appeal. It’s simple to understand, inexpensive to run, and is built on partnerships that can be replicated.”

Of course, JPMorgan Chase has a vested interest in getting people to join banks. (It’s worth mentioning, though, that those who join the Bank On program don’t necessarily have to open an account with that particular bank.) Still, it’s a step forward in creating some financial stability for low-income people, especially in cities. Rather than relying on the check-cashing spot on the corner, more people will have an opportunity for safe, stable banking.

In 2005, the city of San Francisco, wanting to raise awareness about the Earned Income Tax Credit, offered a 10 percent match to anyone applying for it.

"We had nearly 10,000 families apply for the match and ended up mailing out 10,000 checks that year," says San Francisco Treasurer José Cisneros. "It was a real learning moment for me."

What he discovered was the city was mailing out checks to people who didn't have checking accounts, forcing them to take yet another check to a cashing service charging a hefty transaction fee.

A task force convened by the city to study the financial health of local residents discovered approximately 50,000 unbanked households. Many spent more than $1,000 a year to cash paychecks, Cisneros says.

"These people, because of citizen status, previous problems with finances, or just lack of education, were left with few options," Cisneros says. "We started talking to national experts thinking if we could give unbanked people access to accounts, we could help them save money."

Working with the Federal Reserve Bank of San Francisco, community leaders, and several nonprofits and financial institutions, the Treasurer's office laid the groundwork for a program called Bank On San Francisco, which launched in 2006 with the goal of helping 10,000 households.

Similar programs have since been replicated across the country. The National League of Cities, hoping to share the San Francisco model with other urban centers, created a Bank On Cities program, and offers resources for bringing Bank On efforts to other markets. The U.S. Treasury Department even tried to create a national version of the program, called Bank On USA. It failed to win the budgetary authority to fund the initiative, but Treasury is among the supporters listed on the joinbankon.org website, as is the Federal Reserve and the Federal Deposit Insurance Corp.

The Bank On model "addresses a key obstacle to financial stability for low-income residents in cities across the nation: lack of access to affordable, mainstream financial services," says Clifford Johnson, executive director of the National League of Cities' Institute for Youth, Education & Families. "Too many low-income individuals and families are forced to rely on alternative and often predatory financial service providers that target residents in poor neighborhoods, including high-cost check cashers and payday lenders."

Financial institutions involved in Bank On initiatives have agreed to come up with alternatives. Partners in the San Francisco program include the four largest national banks, regional players like East West Bank and Bank of the West, and several area credit unions. Some of the partner institutions simply offer accounts allowing for check-cashing services, while others go farther. Santa Rosa, Calif.-based Redwood Credit Union, for example, also makes small personal loans to people who come in for financial education and affordable accounts.

San Francisco-based Union Bank, which has been involved in the city's Bank On program since the outset, offers a checking account with an ATM card, but there are restrictions, including no overdrafts.

Such products are being pitched now to college students and other customers who might need a little assistance in becoming financially responsible.

"We have seen this as a really good opportunity," says Julius Robinson, head of corporate social responsibility at Union Bank. "The Bank On initiative was a wake-up for learning how we could use our resources to help people. The dream José had caught fire within the bank."

And it caught on in places like Kansas City, Mo., which has a program offering both transaction and savings accounts to low-income residents. In designing its program, Bank On Save Up Kansas City drew on inspiration from other cities and advice from partners at home.

"There are so many things to think about: marketing, the way accounts look, the reporting," says Jana Castanon, the community outreach coordinator for the program, which recently got approval as a nonprofit and now employs two people full time.

In the fiscal year that ended June 30, the third one of its existence, Bank On Louisville helped create 3,493 new bank accounts for local residents, bringing its three-year total to 12,886.

That’s according to a report released today by Bank On Louisville, which is a community initiative led by Louisville-Jefferson County Metro Government's Community Services and Revitalization Department that strives to increase access to financial education and to financial institutions.

The nearly 13,000 new accounts opened in the past three years have an average quarterly balance of $1,229, according to the report. Also, 74 percent of the accounts opened have remained open.

Nearly 2,000 people participated in Bank On Louisville financial education programs during the last fiscal year, which was a 16 percent increase over the goal for that year. Since July 2011, 3,656 people have participated in the financial education programs.

For this fiscal year, Bank On’s objectives are to increase account openings by 20 percent and reach a cumulative number of 15,463 new accounts and to increase financial education participation by 100 percent for a cumulative target of 7,750 participants.

This article was supervised by MinnPost journalist Sharon Schmickle, produced in partnership with students at the University of Minnesota School of Journalism and Mass Communication, and is one in a series of occasional articles funded by a grant from the Northwest Area Foundation.

Many of us remember the day we opened that first bank account. It was a basic step toward economic self-sufficiency – hopefully opening access to the reasonably priced financial services we eventually would need to pay for education, buy cars and homes, and face family emergencies.

But more than 360,000 Minnesota households lack that basic access because they are“unbanked” or “underbanked,” according to a 2011 survey by the Federal Deposit Insurance Corporation -- an increase of 70,000 from the FDIC’s 2009 survey. In other words, nearly 17 percent of Minnesota households lacked adequate banking connections in 2011.

Connecting those families with safe, affordable and accessible financial services has become an urgent priority for several community support organizations across Minnesota.

Largely poor and members of minority groups, these families rely on often-times costly alternative financial services, paying hefty fees for simply cashing paychecks or sending money to pay bills or to help far-away relatives. They have little choice when a car breaks down or a child falls ill but to turn to high interest loans offered by payday lenders and pawn shops.

These fees and other charges add up, draining money from folks who can ill-afford it. Many of them fall into cycles of debt that become increasingly hard to break.

“These predatory products end up costing individuals and their families significantly, in terms of their whole financial picture,” said Eva Song Margolis, director of the Eastside Financial Center, a division of Lutheran Social Services. Too often, such high-cost products wind up “stripping away the income and savings that people do have,” she said.

Exiting a Payday America in Roseville, Sammy Armon expressed his frustration with the debt cycle he is stuck in. Armon uses payday loans to cover other debts.

"You take one to pay somebody else.... You take from Peter to give to Paul," Armon said.

In response to the growing numbers of unbanked Minnesotans, some non-profits are working to break such cycles through financial counseling and also by offering innovative financial products.

Some are testing products and programs designed to meet the needs of certain racial, ethnic, or cultural groups. Though open to any who walk through their doors, no matter the demographic, such organizations are ideally positioned to address culturally specific barriers to banking.

Building credit with Lending Circles

Immigrant Hispanics and Latinos rely heavily on non-bank check cashing and money transfer services. The pitch to them is easy to see in the signs advertising in both English and Spanish in the Ace Cash Express on Lake Street and the Payday America in Roseville, both in areas with significant Hispanic populations.

Twenty percent of Hispanics nationwide are completely unbanked, according to the FDIC survey.

Many Hispanic immigrants are afraid to open bank accounts, said David Soto, a financial coach at Comunidades Latinas Unidas En Servicio (CLUES), a non-profit organization that provides services to Latinos in the Twin Cities. Some fear unexpected fees, while others fear legal consequences. Some non-citizens do not realize that they could open accounts using their Individual Taxpayer Identification Number rather than a Social Security number, Soto said.

Poor credit scores prevent many from accessing reasonably priced loans -- big and small. Credit scores are the biggest determinant in what interest rate a homebuyer qualifies for, according to Tess Rice, general counsel for the Minnesota Bankers Association.

Lending Trap: Cash at a Cost seriesEven worse than poor credit though is no credit, Soto said. Immigrants who conduct financial transactions solely through alternative financial services have no credit score, and thus little chance of qualifying for a housing or car loan.

CLUES, in conjunction with San Francisco-based Mission Asset Fund, is testing a social lending program designed to improve participants’ credit scores.

The Lending Circles program is an organized version of a traditional lending model known in Spanish as a tanda. As such, the format is already familiar to most participants, Soto said.

Here’s how it works: Participants contribute monthly to a “pot” which is then awarded to each participant in turn. For the first person who receives the “pot,” it serves as the equivalent of an interest-free loan; for the last person, it is like money in a savings account that is available for withdrawal.

What sets Lending Circles apart from the traditional tanda is that, each month, the Mission Asset Fund notifies credit agencies of the payments made as part of the program, thus boosting participants’ credit scores.

“A big, big, big benefit that our Lending Circle offers, is the opportunity for people to repair credit, to slowly fix credit, or to establish credit if they don’t have any,” Soto said.

CLUES currently facilitates six circles, each with four to 12 participants. Several other circles have successfully run their course.

Culturally responsive loans

Among Minnesota’s African immigrants, distrust of mainstream banking runs especially high. Often it is based on immigrants’ experiences with corrupt or dysfunctional financial systems in their former homelands.

“The way we use banking in Minnesota is a new concept to them,” said Hussein Samatar, director of the African Development Center (ADC). “Especially if they are from war torn countries, they may not even see for a lifetime a functioning financial institution such as the banking system.”

Located in Minneapolis’ Cedar-Riverside neighborhood, home to much of Minnesota’s largely Muslim Somali community, the ADC promotes financial well-being through education and counseling. In addition, it has developed a micro-lending system that does not violate the Islamic prohibition on charging interest.

These micro-loans, offered as part of the ADC’s business development program, are structured to technically avoid charging interest. Instead of providing an individual with a monetary loan, the ADC purchases whatever the client needs -- high-tech kitchen equipment for a restaurant, for example -- and then raises the price marginally and sells the purchased item to the client over an agreed upon period.

This strategy allows many in Minnesota’s growing Muslim community to obtain the capital they need to finance small-business ventures without compromising religious values.

The micro-lending program has been thriving, Samatar said. He characterized the program as “the alternative for people who do not want to or cannot go to the bank.”

The ADC also provides regular loans with interest.

Remote: unbanked on a reservation

Of the American Indians employed by the Leech Lake Band of Ojibwe, about 5 percent receive paychecks by direct deposit, said Robert Aitken, who directs financial services. While that does not mean that all other tribal employees necessarily lack bank accounts, it does suggest a lack of banking connections.

Approximately 15 percent of American Indians are unbanked nationally, according to the FDIC survey. That makes American Indians about three-and-a-half times more likely to be unbanked than whites.

The primary reasons for this disparity are geographical and cultural, said Shawn Spruce, programs consultant at the First Nations Development Institute, a national advocacy organization.

Some reservations are remotely located, with no banks or credit unions nearby. In addition, many Native people, especially elders, are uncomfortable with the formalized setting and procedures of banks, Spruce said. Pawn shops, on the other hand, are more familiar.

Underbanked: Has an account, but continues to rely on alternative financial services, like check-cashing services, payday loans, rent-to-own agreements or pawn shops.

“That goes back to years and years ago when Native American families would come to border towns and they would barter for goods and services,” Spruce said. “People just got into the habit of using pawn shops to get loans and credit…and what we’ve found is that that’s just continued into the 20th and 21st centuries.”

Don Josefson owns Better Days Pawn in Bemidji. Positioned near three large reservations -- Leech Lake, Red Lake and White Earth -- Josefson’s estimates his customer base as about 70 percent Native American.

Like other pawn shops, Josefson’s rates are steep -- usually around 25 percent -- but he said that he is not getting rich.

“In one sense I feel I run the most honest banking business in America,” he said. “You come in, you’ve got a TV set, we decide it’s worth 150 bucks, I give you 80 bucks…. I’m giving you what I can honestly give you, and [still] try to make a dollar selling your item if you don’t come back.”

Aitken, at Leech Lake, doesn’t consider pawn shops a problem for band members. He worries more that the lack of bank accounts makes it difficult or impossible for tribal members to buy homes -- a key step in asset-building -- and to obtain decent loans for business enterprises.

Aitken is working to change that last bit. The Leech Lake Band has received a federal grant to start a Community Development Financial Institution, a program designed to provide financial services in low-income communities. Aitken hopes to see that program up and running later this year.

Bank On Twin Cities?

While many organizations try to assist specific groups, others are taking a broad approach. One is Bank On, which works with mainstream financial institutions, city governments and local community organizations to remove barriers to banking.

The first Bank On was launched in San Francisco in 2006. A year later, the organization had achieved its initial goal of connecting more than 10,000 residents to participating banks and credit unions. That success quickly led other cities nationwide to follow suit.

Minneapolis-based financial consultant Cassaundra Adler is working to start a Bank On Twin Cities or a similar organization. A former public policy fellow at the University of Minnesota’s Humphrey Institute, Adler has been a passionate advocate for underserved populations for years.

Growing up in a poor neighborhood in Chicago’s west end, Adler learned what it is like to lack financial security. It was normal for women to keep money in their bras rather than in a bank, she said.

Security is one of many reasons people need banks. The unbanked are more likely to be crime victims because they often carry cash or keep money hidden at home. They also are more likely to lose money during a disaster.

Adler came away from her upbringing with a desire to understand money. And now she does. But she also remembers that rules and fees associated with bank accounts can be confusing.

“There’s all sorts of little disclosures and things that people get caught up on, that they don’t know about, so it’s easier for them to live on a cash basis,” Adler said. “When you walk into a check cashing place it’s very clear…or they go to Walmart, and it’s four dollars to cash a check, no matter how much it is. And it’s like, it’s so simple. And that appeals to people.”

Indeed, it appealed to Shannon Phillips, 31, North St. Paul, who formerly cashed checks at The Unbank just down the street from her home.

“It was convenient…. I could just walk right over there and cash my check,” Phillips said.

But now, Phillips has an account at a Wells Fargo bank, and she is relieved to be saving the check-cashing fees. That’s money she could use to realize her dream of opening a hair salon.

“I’m not exactly where I need to be financially yet, but I’m getting there,” Phillips said.

If Adler has her way, more people will save such fees, and others will come to understand the scope of the problems created when so many Twin Cities residents lack adequate banking connections.

Her crusade is gathering public and private support in Minnesota. Among other collaborators, the Northwest Area Foundation conducted a preliminary review to assess the interest in a program serving the Twin Cities.

It found “widespread interests in many sectors to address issues of ensuring better access to financial products and services that meet the needs of low-income people,” Gary Cunningham, NWAF’s vice president of Programs-Chief Program Officer, said in an email response to MinnPost’s query.

(While MinnPost’s Lending Trap series is supported by a grant from the NWAF, the foundation played no role in the conception or execution of this report other than to respond to a reporter’s questions; its connection with this issue came up during routine and independent reporting.)

The NWAF review also revealed interest in moving beyond Bank On’s traditional starter bank accounts toward a more comprehensive system “to ensure access and financial capability for low-income working people,” Cunningham said. Call it “Bank On 3.0.”

Now, Adler is part of the leadership group that is considering the most effective approach. Cunningham said that bankers, state and local officials, and community advocates have expressed interest in “working together to create a better system so that low income people can fully participate in our financial systems.”

During the recent housing crisis, much attention was focused on struggling homeowners -- and understandably so. Not as much attention was paid to those without homes, struggling just to get by. Now, though, the housing “triage” has ended, Adler said, and she sees an opportunity to address the needs of the unbanked.

“It seems like the time is now. People are focusing on this now, people are having an understanding of the predatory stuff now -- now that the housing market isn’t eclipsing everything,” Adler said.

Adler isn’t seeking to supplant the work that organizations like Eastside are doing. Just the opposite. She wants to build on the strong community connections they already have.

“That’s exactly what I want to tap into,” she said. “Let’s take all of this expertise and pool it together.… Together we are much more powerful.”

Samantha LaBrasca contributed to this article.

United Way of Metropolitan Dallas on Friday introduced marketing and a new website for its Bank on Dallas program, which uses expertise from more than 20 financial institutions to provide assistance for people who need financial guidance.

United Way launched Bank on Dallas’ website, bankondallas.org, to serve as a resource or for gaining access to open bank accounts, building credit and learning how to manage money. The website also provides a list of financial classes and connections to banks.

Financial institutions supporting the program include Federal Deposit Insurance Corp., Capital One Bank, Frost Bank, Citi Bank, Federal Reserve Bank of Dallas, Business & Community Lenders of Texas, City Credit Union, Chase, Comerica Bank, Neighborhood Credit Union, Bank of Texas, Park Cities Bank, Regions Bank, Bank of Texas Financial Corp., BB&T, Wells Fargo, BBVA Compass, Texas Capital Bank, ViewPoint Bank, American Bank NA, First Convenience Bank and Woodforest National Bank.

The program will eventually fall under United Way’s Community Financial Stability Initiative, which is still developing after launching last year. The initiative works to help battle poverty in Dallas.

Change 4a Dollar, a nonprofit organization designed to help children navigate through life’s financial pitfalls, hosted the event and coordinated the panel discussions and financial lessons, which were led by Bank on Philadelphia partners. Both parents and children had an opportunity to realize the advantages of becoming smarter with their finances and to avoid losing their hard-earned money to check-cashing establishments.

To view highlights from the year’s event, please visit the City Controller’s YouTube channel at http://youtu.be/YtG9XgjC3vA.

Courtesy: Brian Dries

If you subscribe to our mailing list, you got word late last week that Friday’s episode of WNET’s Need to Know would feature the Mississippi College Savings Account Program, one of the 1:1 Fund’s two pilot programs and one of two innovative children's savings programs designed by CFED with support from the W.K. Kellogg Foundation.

Now, the reviews are in. Consensus: the 13-minute segment was a powerful testament to the power of Children’s Savings Accounts (CSAs) and the importance of starting children early on the path towards higher education and long-term financial well-being.

Watch Financial literacy on PBS. See more from Need To Know.

Need to Know traveled to Mississippi to showcase the Mississippi College Savings Program and its partners, W. K. Kellogg Foundation, Delta State University and Hope Credit Union, but momentum for wide-scale adoption of CSA programs is building across the country with many other organizations, cities, state houses and in federal agencies working to make aspirations to go to college a reality for all students, regardless of the ZIP code into which they were born.

Just how deep is the impact of CSAs? As the Need to Know segment indicates, children with savings accounts in their names are six times more likely to go to college than those without accounts. And, this finding controls for factors like race and household income, meaning that children are more likely to go to college if they have an account in their name even if other demographic measures would predict a low propensity for college enrollment. In other words, the power of having a savings account isn’t about how much money is in it, but rather, about how it informs a child’s aspirations.

Without a doubt, we stand on the brink of an important mindset shift. People who understand just how powerful CSAs are will inevitably support them; the question is how we promote that understanding among the public at large. Friday’s episode of Need to Know does exactly that.

Of course, you can help. Start by watching the video and share Friday’s episode of Need to Know on Twitter by clicking here. Want to help the College Savings Accounts of the Mississippi kids grow? Provide matching donations through the 1:1 Fund. Finally, use the comments section below to share your thoughts on CSAs. Thanks for keeping the conversation going!

Birmingham area consumers have more options when it comes to establishing or re-establishing basic banking relationships.

The launch of "Bank on Birmingham" this week brings together a consortium of financial institutions willing to provide banking options to a large underserved population.

The initiative was proposed last year by Councilwoman Kim Rafferty who brought together area banking executives, financial counselors and advocates.

The program is funded for two-years. Financial support is provided by the participating institutions and agencies.The city facilitated the organizational and promotional effort.

"We as a council and the mayor, we're not here to always solve all the problems, but what we can do is empower the people," Rafferty said. "So what we've done is issue a challenge between the banking industry and the nonprofits to establish a model to help our people help themselves."

Participating institutions include Cadence Bank, BancorpSouth, BB&T, BBVA Compass, Cadence Bank, PNC, Regions and Wells Fargo and several nonprofit agencies. Bank on Birmingham Steering committee co-chairs are John Florio of PNC Bank and Judy Woods of the United Way of Central Alabama.

Florio said the partners provide enough resources with the capacity to meet the program's mission.

"It's not a response to answer every problem in our community when it comes to financial issues of low and moderate income individuals," he said. "What Bank on Birmingham is is a collaborative of city, county, nonprofit (and) financial institutions working together."

Florio distilled the mission to three words: encouraging, educating and empowering. That includes assisting people who are ready to reenter traditional banks and providing education to help others get on a path toward financial health.

"All the services that are available in the city and in the county are represented in our collaboration," Florio said. "What we're really doing is working together to make it all happen in our community at one time."

Birmingham's project is modeled after others including San Francisco's Bank On program that includes financial education and counseling, low-cost checking and savings accounts, electronic pay solutions and alternative small payday loan programs. San Francisco's program became a national model, spawning similar programs around the country.

"It is going to be a welcome addition to our city," Woods said. "This is a win, win for us because we're already involved with working with individuals who have situations that have caused them to move away from mainstream banking."

Birmingham's conversation about residents with poor credit and few options was piqued in late 2011 when the City Council passed a moratorium on payday lending and check cashing businesses.

Rafferty has said she wanted to create a clearinghouse of available institutions willing to provide services to those now turning to high-interest and high-fee payday lending and check cashing businesses.

"We couldn't' eliminate them from the city, so what we looked to do is find a solution to educate the people in best business practices, especially with their own finances," Rafferty said.

The city's temporary halt on new approvals for payday lending businesses was proposed and championed by Councilwoman Lashunda Scales. Scales, who was not involved in the new banking initiative, called the project a positive component of a larger reform effort.

"Everybody is now taking ownership into how we can best resolve it," Scales said. "We weren't all on one accord about it, but we're on one accord today, and that's what counts. I do believe in empowering our community, and once we become economically strong, we become strong as a city."