Eight Cities Selected to Participate in NLC’s Bank On Cities Campaign

13 04 2009

by Sarah Bainton Kahn and Laura McComas

NLC’s Institute for Youth, Education, and Families (YEF Institute) has selected eight new cities to participate in a second phase of the Bank On Cities Campaign, a technical assistance project aimed at helping municipal leaders connect low- and moderate-income families to mainstream financial services and products.

The cities selected for the project include Bryan, Texas; Denver; Gaithersburg, Md.; Indianapolis; Louisville, Ky.; Newark, N.J.; Rapid City, S.D.; and St. Petersburg, Fla.

Reaching the Unbanked

Millions of American families lack a bank account, paying hundreds and sometimes thousands of dollars each year to cash checks and pay bills at check cashers, payday lenders and other bank alternatives. These families are missing out on opportunities to build wealth which could, in turn, lead to more financially stable neighborhoods.

“A bank account can be an important step on the path to financial security,” said Clifford M. Johnson, executive director of the YEF Institute. “Because a city’s economic health depends on the financial security of its residents, cities have a lot to gain by partnering with banks and credit unions to expand financial opportunities for families, especially in these uncertain economic times.”

The Bank On Cities Campaign Rolls On

As part of the 2009-2010 Bank On Cities Campaign, the YEF Institute will work closely with the eight selected cities to replicate or adapt an innovative approach pioneered by San Francisco Mayor Gavin Newsom and Treasurer José Cisneros. This initiative, called Bank On San Francisco, forges connections among the city, financial institutions, and community organizations to develop and promote opportunities for accessible mainstream banking and financial education. The program has garnered the attention and interest of municipal leaders from cities across the nation, who are excited about launching similar efforts in their communities.

“As the mayor of Indianapolis, I hold financial fitness and asset building among our city’s top priorities,” commented Indianapolis Mayor Greg Ballard. “Launching a Bank On Indianapolis program is going to be key in building on our existing financial stability platform to reach this priority. Bank On Indianapolis will provide needed access to banking products, including savings and loans. In the current economic downturn, these services can’t be provided soon enough.”

In 2008, the first phase of the Bank On Cities Campaign assisted 10 cities in developing initiatives to expand access to free and low-cost bank accounts and financial education. Several of those cities have already started to successfully implement their “Bank On” or similar programs, including Seattle and Houston.

During the next phase of this project, the eight new selected cities will receive technical assistance from the YEF Institute to develop and implement their own version of a citywide Bank On Campaign.

Teams from each city will receive one-on-one assistance from institute staff and will participate in monthly conference calls, Web seminars and cross-city convenings designed to facilitate peer learning and provide access to national experts and other resources. Several cities that have already launched or will soon launch “Bank On” strategies have agreed to act as “faculty” and provide guidance and advice to the new cohort of project cities. These faculty cities include: Evansville, Ind.; Savannah, Ga.; San Antonio; and San Francisco.

“We are excited at the opportunity this creates for us to help Denver families toward long-term financial stability,” said Denver Mayor John Hickenlooper. “We look forward to taking full advantage of the expertise of NLC’s YEF Institute as we develop a Bank On Denver initiative that will give responsible, hard-working citizens a chance to achieve prosperity and financial security.”

Details: For more information about how to help your community’s residents build assets, visit http://www.nlc.org/iyef or contact Sarah Bainton Kahn at (202) 626-3044 or bainton@nlc.org.

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City to urge low-income families to use banks

13 04 2009

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April 13, 2009
City to urge low-income families to use banksBy Dan Klepal
dklepal@courier-journal.com

Louisville is one of eight cities chosen for a national program to encourage low-income families to begin banking with mainstream financial institutions, rather than using pay-day lenders and check cashers who often charge high fees.

The Bank on Cities campaign is led by the National League of Cities. It is modeled after Bank on San Francisco, an initiative developed by San Francisco Mayor Gavin Newsom and Treasurer Jose Cisneros that helps create relationships between local governments, citizens, local banks and credit unions. It tries to ensure all residents have access to bank accounts.

The project aims to expand low-income families’ access to free and low-cost bank accounts to help them build savings and establish a credit history.

CLOUT, a Louisville advocacy group, estimates there are 29,000 households in the city that do not have bank accounts. Nation-wide, there are 28 million unbanked and 44 million “underbanked” Americans who lose $11 billion each year to check cashers and payday lenders, according to the National League of Cities.

Louisville Mayor Jerry Abramson has appointed John Fischer, assistant director of economic development, to oversee the Louisville campaign. Fischer said his goal is to have all banks and credit unions with branches in Louisville to be part of the campaign.

“Payday lenders and check cashing companies certainly serve a purpose,” Louisville Mayor Jerry Abramson said. “But often they take advantage of people in vulnerable situations. This new program will help people learn how to work with our … banks to start a relationship and build a financial future.”

Throughout the one-year project, the cities will receive technical assistance from National League of Cities through various seminars. City officials will develop action plans to achieve their goals with the help of National League of Cities staff and other national experts.

“The opportunities this program provides are critical to enhancing the broader economic vitality of cities,” said Kathleen Novak, president of the National League of Cities and mayor of Northglenn, Colo.

Other cities participating in the program are Indianapolis; St. Petersburg, Fla.; Newark, N.J.; Denver, Colo.; Gaithersburg, Md.; Bryan, Texas; and Rapid City, S.D.

During the first two years of Bank on San Francisco, more than 31,000 accounts were opened through 17 participating financial institutions, saving San Franciscans nearly $20 million, according to the league of cities.

The Bank on Cities campaign is supported by the Annie E. Casey Foundation and the Ford Foundation.

Reporter Dan Klepal can be reached at (502) 582-4475.
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http://www.courier-journal.com/article/20090413/NEWS01/90413011/-1/nletter02?source=nletter-business





Usury Country: Payday Loans Pushing Millions of Middle Class Americans Deeper into Debt

6 04 2009

Lawmakers and public officials in California, Ohio, South Carolina, Missouri, Washington and other states are attempting to crack down on the controversial practice known as payday lending.

Interview featuring journalist Daniel Brook about his Harper’s Magazine article, “Usury Country,” and Ginna Green of the Center for Responsible Lending.