When San Francisco was establishing a program three years ago to move unbanked consumers into the financial mainstream, banks and credit unions signed on because "it was a good political opportunity to generate good will," said Matt Fellowes, an advocate for the unbanked who advised city officials.

Since then he has helped similar programs sprout up across the country, and now many financial institutions are finding more practical reasons to participate.

"There is an economic argument that they were missing out on deposits and cross-selling opportunities," said Mr. Fellowes, the director of the Pew Charitable Trust's safe banking opportunities program.

The Bank on San Francisco program has spawned similar efforts in roughly 40 cities and counties, and he said he fields calls regularly from other jurisdictions looking to follow suit.

About 22 million people in the United States do not have a basic checking or savings account, and Mr. Fellowes' research shows that they spend an average of nearly $800 a year on check-cashing services.

Jennifer Tescher, the director of the Center for Financial Services Innovation, a unit of ShoreBank Corp. in Chicago that promotes access to financial services for the unbanked, said steering low-income families away from higher-cost check cashers "is a simple but powerful way … [cities] can have a positive impact on the lives of their constituents."

The benefits for banks include improved community relations, Community Reinvestment Act credit, and a chance to attract customers. The accounts are not producing any meaningful increases in deposits yet — Bank on San Francisco has generated just $4 million of deposits, spread across 13 banks — but bankers are betting that some depositors will continue to move up the economic ladder, migrate to other products and services, and eventually become borrowers.

The $2.9 billion-asset HomeStreet Bank in Seattle is one of 22 banks and credit unions participating in Bank on Seattle-King County. "This is a great way to increase the number of our checking accounts," said Kathryn Williams, HomeStreet's director of community relations. "Down the road, we certainly hope that some of them can develop enough assets that they can become homeowners."

The programs vary in structure, but typically local agencies handle the coordinating, advertising, and marketing, while banks and credit unions provide the accounts, and community groups conduct outreach and financial literacy training.

Mr. Fellowes said banks appreciate the "stamp of approval from the mayor and good publicity," but he acknowledged that they need an economic incentive to continue participating.

He is working with the William Jefferson Clinton Foundation and Booz & Co. Inc. on ways to help bankers capture more revenue from newly banked households. "What will make this a long-term value proposition is if banks are successful at cross-selling their products to these new customers," he said.

Maria Gallo, senior vice president for corporate social responsibility at Union Bank of California, agrees that "this has to be done in a way that is sustainable" for the bank, a Mitsubishi UFJ Financial Group Inc. "If we can get more clients to know Union Bank, it does help us cross-sell and use more Union Bank products."

Union has been participating in Bank on San Francisco since its launch and had 49 active program accounts open in the third quarter, Ms. Gallo said.

To participate in Bank on San Francisco, banks must offer an account that accepts the Mexican and Guatemalan consular cards as primary identification; agree to open accounts for people with a ChexSystems history for nonsufficient funds or overdrafts more than a year old, or less than a year old if they have undergone money management training; waive one set of nonsufficient funds or overdraft fees a year; and set no monthly minimum balance.

Different cities have put their own twists on their programs. New York encourages public housing residents to pay their rent at financial institutions, instead of through check cashers. Bank on Seattle-King County requires institutions to offer direct deposit and a free automated teller machine or debit card. Participating banks also must offer a feature or service to help customers avoid overdraft, such as linking the checking account to a savings account or line of credit.

"It really is not difficult. The bank account we have set up for Bank on Seattle is very, very close to some of our other banking services," Ms. Williams said.

In many cases, municipalities have enlisted bankers and credit unions to help design the programs.

The bankers interviewed for this story said the programs are too new for them to know the costs of the accounts or whether they are profitable. Many bankers say they do not track the number of accounts opened for customers referred through a municipal program, because the accounts can be offered to anyone.

The $793 million-asset Carver Federal Savings Bank, participates in the New York program.

Susan M. Ifill, ts chief retail officer, said an important part of turning previously unbanked customers into profitable ones is "not trying to put them in our box, but creating programs around them."

One way to do that, she said, is to offer the products and services that many are getting from check cashers, such as phone cards or money transfers. "It costs $30 or $35 to wire money at a bank, but only $11 at check cashers," she said.

HomeStreet's Ms. Williams said the Seattle campaign has helped give her bank access to people it might not have reached on its own.

"Plus, she added, "the city of Seattle gives it credibility that if we had tried to do it on our own, it may have been viewed by some as a bank just trying to make more money."

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