‘Bank on Rockford’ offers unbanked residents free and low-cost accounts
Targets unbanked residents for free and low-cost accounts
From press release
State Treasurer Alexi Giannoulias formally launched Bank On Rockford Oct. 1, aiming to sign up 1,000 unbanked Rockford-area residents from underserved and minority communities for free and low-cost accounts in the next year.
About 4,600 Rockford households currently rely on check cashers, payday lenders and pawn shops to cash checks, pay bills and borrow money, often at a steep cost, according to the Pew Charitable Trusts’ Safe Banking Project. The average unbanked household in Illinois pays $574 a year to simply cash payroll checks, leaving $22,376 in remaining income.
Too many Rockford residents are ripped off by check cashers and payday lenders and become trapped in an endless spiral of debt,
said Giannoulias, adding that his office plans to establish other Bank On Illinois programs throughout the state in the next year.
Having access to traditional checking and savings accounts will translate into financial independence and empowerment,
It will help our most vulnerable citizens, but it has a much broader effect on neighborhoods and communities hit hard during these difficult times.
Sharon E., 46, of Rockford was a postal worker for 15 years before health issues and a divorce put a strain on her finances. Before she knew it, Sharon had racked up several overdraft fees on her checking account, prompting her bank to close the account and knock her out of the financial mainstream.
That changed in June when a caseworker at Rockford Rescue Mission recommended Sharon open an account at Generations Credit Union, one of 12 banks and credit unions participating in the new Bank On Rockford program, each promoting accounts with different features.
Generations Credit Union provided Sharon a free,
account with direct deposit and a pre-loaded debit card that does not allow overdrafts and provides her with money orders to pay bills for just 50 cents each, according to Member Relations Manager Denise Leonard.
Most people bank close to where they work or live, but many low- to moderate-income neighborhoods have no access at all,
With our non-traditional account, you can load your pre-paid debit card online or by phone. You don’t have to visit a brick and mortar location to do your banking any more.
The key to Bank On Rockford’s success will be its integrated approach, Giannoulias said. The program will reach people who were previously unwilling or unable to maintain traditional accounts through local social service agencies, some of which will provide free financial education classes.
I will definitely use it. Our people are really being victimized by payday lenders. This empowers people to make wiser financial choices,
said Teresa Reeverts, Sharon’s caseworker at Rockford Rescue Mission.
Banks and credit unions, many of which already have starter or second chance account products, will benefit from the consolidated marketing and new customer base.
Businesses do best when the communities they operate in are thriving. It is simply in the best interest of any business to act in the best interest of the community,
said Salvador Villalobos, a Licensed Personal Banker at Chase Bank-Mulford Branch.
Bank On Rockford partners will target people who lack accounts, don’t have Social Security numbers or have negative (but not fraudulent) credit histories. Most Bank On Rockford partners accept an Illinois state identification card, ITIN, Mexican Matricula Consular or Guatemalan Consular identification card or foreign passport as primary identification.
By participating in Bank On Rockford, community groups and non-profit organizations will refer people to our credit union who truly need our help. Without partner referrals, we may never be able to reach many of these people,
said Ed Berg, president of First Northern Credit Union.
The San Francisco Treasurer’s Office launched the first Bank On program in 2006,and it has already opened appropriate accountswith an average balance of almost $1,000for almost 40 percent of its unbanked population. Rockford is one of more than 50 cities to duplicate the city program, while Illinois and California are the first two statewide campaigns to date.
The people in Rockford who have the least amount of money are spending the most on banking. Our goal is to help my consultants save money and build wealth for a better future,
said State Rep. Chuck Jefferson, whose office will act as a Bank On Rockford headquarters.
This change is happening for Sharon after just four months with her Bank On Rockford account. She has a plan to pay back the overdraft fees she owes her old bank and feels in control of her money instead of being controlled by it.
It is easier for me to keep track of my spending,
For more information on Bank On Rockford, visit www.bankonrockford.org or call Rep. Jefferson’s office at (815) 987-7433.
From the October 7-13, 2009 issue
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