Released: November 05, 2009

Programs help ‘unbanked’ avoid high fees

Source: Martha Moore, USA Today

Dozens of cities are launching programs to sign up low-income people as customers at commercial banks so they can avoid the high fees typical of check-cashing stores and payday lenders. More than 50 cities and at least three states now have programs modeled on the 3-year-old Bank On San Francisco.

The programs — including Indiana’s, launched last week, and Newark’s, which began Monday — are aimed at the estimated 8.7 million American households that do not have bank accounts. Bank On programs encourage residents to open low- or no-cost checking accounts. Participating banks and credit unions must offer “second chance” accounts for customers who have bounced checks in the past, and accept identification besides Social Security numbers, such as taxpayer identification numbers.

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