In their quest to turn the unbanked into customers, banks across the country are trying to encourage their states to provide matching funds to consumers who open savings accounts.

Twenty-one states have laws permitting the creation of so-called individual development account programs, in which states kick in as much as $1,000 a year to help low-income residents buy homes, start a business, or attend college. Those laws were passed in the last four years. Three other states are setting up such programs and as many as six others and the District of Columbia could do so this year, according to the Center for Social Development at Washington University in St. Louis.

Inger Guiffrida, program director for the Corporation for Enterprise Development, of Washington, said, “By providing individual development accounts, financial institutions are helping to create stability in the lives of poor Americans, who will become their customers of tomorrow.”

In these programs, community groups working closely with banks help individuals set up accounts, and the states match the funds in the opening balance and at least once a year afterward. The incentive for banks and community groups is to create more bankable consumers and, in turn, more stable communities.

Deborah Povich, public policy director at the Maryland Center for Community Development, said all the state has to do is provide matching funds; the banks and community groups handle the rest.

About 235 community organizations participate in state-funded programs, according to the Corporation for Enterprise Development, and they usually work with one or two financial institutions. The money going into the savings account must be from earned income, and the money going out can only be used to fund a mortgage, a new business, or post-secondary education.

Vermont, Connecticut, and Montana passed matching-funds laws in 2000 and are implementing programs, while New Jersey and the District of Columbia are close to approving similar measures. Five other states — Maryland, Georgia, Florida, Alabama, and Louisiana — are to consider bills this year.

Under the Maryland bill the state would match funds at a rate of 2-to-1 up to $500 a year; the Georgia bill would cap state contributions at $1,000 a year.

Kathleen Murphy, president of the Maryland Bankers Association, said her group and the community organizations are confident that state funding would increase people’s participation in the program and awareness of it.

“When the state gets involved in matching funds, it will really catch on,” she said.

Ms. Murphy said the Maryland Bankers Association supported a similar bill that ran out of time to be passed last year.

Like other states seeking government funding, Maryland has a community-based individual development program, in which nonprofits such as the United Way provide the matched funds. However, only a handful community groups and a few banks, including $5.5 billion-asset Provident Bank of Maryland, have become involved. In this grassroots program Provident provides its dozen or so participants with fee-waived savings accounts and financial counseling.

A Fifth Third Bank branch in Indianapolis benefited soon after it joined Indiana’s program in 1999. In just over a year the branch established 100 accounts with an average balance of $300, and the matching funds have been three times that, said Beverly Mukes-Gaithers, community reinvestment officer for Fifth Third Indiana, a subsidiary of Cincinnati’s Fifth Third Bancorp.

She said she hopes these people stay with the bank when the matching component expires and that they will go through Fifth Third if they decide to buy a house with their savings.

“We realize that historically, low-income people do not have the opportunity to save money, and we really want to encourage it and be a part of it,” Ms. Mukes-Gaithers said.

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