SACRAMENTO, Calif. - California’s credit unions are working with the governor’s office here to help unbanked consumers get a new or second chance to enter the financial mainstream.
Keri Bailey, the California league’s legislative and regulatory lobbyist, told the Credit Union Journal the league is helping the governor’s office reach out to credit unions by facilitating meetings, with the governor’s office targeting San Jose, Fresno, Los Angeles and Oakland for its “Bank On California” program.
“We are pulling together credit unions in those regions to meet with the governor’s representative,” she explained. “The office is trying to figure out best practices for drawing unbanked people into a financial institution.”
According the Bailey, the Bank On California program attempts to bring the unbanked into the financial mainstream.
It targets people who do not have a formal relationship with a financial institution and tries to develop that relationship.
She said one of the program’s key elements is asking financial institutions to create “starter accounts.” These accounts have four criteria: no minimum balance, a no- or low-cost monthly service charge, the ability to accept alternative forms of identification (but only those authorized by the federal government), and a second-chance checking account.
The latter element is necessary because many of those who are unbanked are so because people are on Check Systems, she said. The plan asks financial institutions to be creative in coming up with ways to get these people a checking account.
“We are inviting credit unions to come to meetings on a region-by-region basis,” said Bailey, who noted meetings were held earlier this month in Oakland and San Jose. “We ask credit unions to come in and listen to the governor’s representative, and for them to share their stories about serving the underserved population. Then, they take that information back to their credit unions where they decide if they are going to participate. A lot of our credit unions are really well situated to reach out to this population and bring them in.”
Later this year, the Bank On California program will expand to include larger meetings with banks, credit unions and community non-profit groups. Bailey said the governor’s office anticipates much of the outreach effort will be done by non-profits.
“They want to loop those non-profits in to get them excited about it, and we are excited to be part of the effort,” she said.
