In 2005, the city of San Francisco, wanting to raise awareness about the Earned Income Tax Credit, offered a 10 percent match to anyone applying for it.

"We had nearly 10,000 families apply for the match and ended up mailing out 10,000 checks that year," says San Francisco Treasurer José Cisneros. "It was a real learning moment for me."

What he discovered was the city was mailing out checks to people who didn't have checking accounts, forcing them to take yet another check to a cashing service charging a hefty transaction fee.

A task force convened by the city to study the financial health of local residents discovered approximately 50,000 unbanked households. Many spent more than $1,000 a year to cash paychecks, Cisneros says.

"These people, because of citizen status, previous problems with finances, or just lack of education, were left with few options," Cisneros says. "We started talking to national experts thinking if we could give unbanked people access to accounts, we could help them save money."

Working with the Federal Reserve Bank of San Francisco, community leaders, and several nonprofits and financial institutions, the Treasurer's office laid the groundwork for a program called Bank On San Francisco, which launched in 2006 with the goal of helping 10,000 households.

Similar programs have since been replicated across the country. The National League of Cities, hoping to share the San Francisco model with other urban centers, created a Bank On Cities program, and offers resources for bringing Bank On efforts to other markets. The U.S. Treasury Department even tried to create a national version of the program, called Bank On USA. It failed to win the budgetary authority to fund the initiative, but Treasury is among the supporters listed on the website, as is the Federal Reserve and the Federal Deposit Insurance Corp.

The Bank On model "addresses a key obstacle to financial stability for low-income residents in cities across the nation: lack of access to affordable, mainstream financial services," says Clifford Johnson, executive director of the National League of Cities' Institute for Youth, Education & Families. "Too many low-income individuals and families are forced to rely on alternative and often predatory financial service providers that target residents in poor neighborhoods, including high-cost check cashers and payday lenders."

Financial institutions involved in Bank On initiatives have agreed to come up with alternatives. Partners in the San Francisco program include the four largest national banks, regional players like East West Bank and Bank of the West, and several area credit unions. Some of the partner institutions simply offer accounts allowing for check-cashing services, while others go farther. Santa Rosa, Calif.-based Redwood Credit Union, for example, also makes small personal loans to people who come in for financial education and affordable accounts.

San Francisco-based Union Bank, which has been involved in the city's Bank On program since the outset, offers a checking account with an ATM card, but there are restrictions, including no overdrafts.

Such products are being pitched now to college students and other customers who might need a little assistance in becoming financially responsible.

"We have seen this as a really good opportunity," says Julius Robinson, head of corporate social responsibility at Union Bank. "The Bank On initiative was a wake-up for learning how we could use our resources to help people. The dream José had caught fire within the bank."

And it caught on in places like Kansas City, Mo., which has a program offering both transaction and savings accounts to low-income residents. In designing its program, Bank On Save Up Kansas City drew on inspiration from other cities and advice from partners at home.

"There are so many things to think about: marketing, the way accounts look, the reporting," says Jana Castanon, the community outreach coordinator for the program, which recently got approval as a nonprofit and now employs two people full time.

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