Bank On Central Texas

Bank On Central Texas is a community initiative led by United Way and PeopleFund to bring together banks, credit unions, financial services providers, government, private sector, community organizations, and nonprofits to bring more people into the financial mainstream. Establishing a relationship with a mainstream financial institution, such as a bank or credit union, can be a crucial first step to provide families with opportunities to save, access affordable credit, and purchase assets. Families with access to basic financial products are more likely to have savings and assets, and are less likely to utilize financial services that charge high fees and interest rates. Bank On Central Texas will initially consist of three primary components: development of an accessible set of financial products and services targeted towards the unbanked and under-banked; a Public Awareness Campaign; and an Employer Campaign.

The Issue

In the Austin-Round Rock Metropolitan Statistical Area, approximately 47,000 households lack a checking or savings account.¹ In 2008, checks cashed by non-bank check cashers were valued at over $160 million with more than $4 million in check cashing fees collected.² The typical working, unbanked household in Austin pays between $230 and $918 to cash paychecks over the course of one year.3 Additionally, we know that in Central Texas we borrow $90,853,499 in payday loans annually and pay $14,763,694 in fees.⁴ According to the Brookings Institute, a full time worker with a checking account could potentially save as much as $40,000 during his or her career by not relying on check cashing services.⁵ Many people do not realize the high price they are paying for these services and the impact that has on their overall ability to make ends meet.

Leadership

Bank On Central Texas is led by United Way Capital Area and PeopleFund with key support from the City of Austin and the FDIC. Diverse partners including banks, credit unions, financial services providers, government, private sector, community organizations, and nonprofits are engaged and committed to the success of this important initiative.

National Movement

The Bank On Central Texas initiative was modeled on the successful Bank on San Francisco initiative, which started in October 2006. Currently, more than 60 other communities have already launched or plan to launch Bank On campaigns, including six in the state of Texas.

Initial Target Audience

Initial communications will target low and moderate-income families who do not conduct their regular financial transactions with mainstream financial institutions and have little savings or assets. In the first year the geographic focus will be the Austin MSA, with focused marketing in zip codes that have a high percentage of low and moderate-income families.

Key Features

Financial Products and Services
Basic transaction accounts that are designed to meet the needs of the unbanked population will be a key feature of Bank On Central Texas. The proposed features of these accounts include the following criteria:

Basic Criteria

• Offer a no or low cost checking account with no minimum balance
• Accept the Mexican Matricula Card as one primary form of identification
• Offer an ATM or debit card
• Low-cost Money Orders
• Serious consideration of a 2nd Chance Account

• Overdraft Protection Option
• Small dollar loan product
• Structured, active 2nd Chance Accounts
• Savings component
• Immediate access to deposits
• Remittances

Participating financial institutions will report a set of agreed upon performance measures that will be tracked and analyzed to ensure the initiative is meeting its objectives. Additionally, branch staff at participating locations will be trained on the goals and products associated with Bank On Central Texas to ensure that new customers have a positive experience.