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The Inclusive Economy
New Tools to Help Meet the Needs of the Un- and Underbanked
By Sean Luechtefeld on 09/29/2010 @ 02:03 PM
EDITOR'S NOTE: This blog post, which reflects on the 2010 Assets Learning Conference and highlights a new AARP publication, was provided to us by Donna Ortega of the AARP Foundation. innovation@cfed and the ALC Team send special thanks to Donna for her contribution. If you have questions or comments, please use the comments feature below to share.
At yesterday’s “Bank On Initiatives” session at the Assets Learning Conference, Bank On programs were in the spotlight. Modeled on the successful Bank On San Francisco effort launched in 2005, local Bank Ons bring together governments, financial institutions, and nonprofits to help consumers access low-cost, safe, financial accounts and high-quality financial education, and are part of a growing movement striving to better meet the needs of the unbanked (those who have neither a checking or savings account) and underbanked (those who have an account but who still rely to some extent on alternative financial service providers such as check cashers, payday lenders, and auto-title loans).
The panel, facilitated by Wynne Lum from Bank of America, included Anne Stuhldreher with New America Foundation, Heidi Goldberg with National League of Cities, and Matt Pippin with the U.S. Treasury Department, who shared the highlights from the last few years of Bank On growth and outlined the goals of the Bank On USA initiative. There are now close to 70 Bank Ons around the country, and 25 cities have fully launched programs. The importance of relationship-building and making the business case for financial institution involvement were big themes in the session and highlighted the particular promise of Bank Ons: beyond getting people into appropriate products, Bank Ons are also about “getting better products into the marketplace.” As the movement matures and new Bank Ons come on board, knowledge-sharing and evaluation to show the impact of the programs’ effectiveness will be key. JoinBankOn.org is the home for those looking to start or learn more about Bank On programs and National League of Cities will release a toolkit for starting a Bank On in the next few months.
Bank Ons and other programs hoping to better serve the unbanked and underbanked have a new resource to help them identify the needs and motivations of this population. Today, the AARP Public Policy Institute and AARP Foundation together released “A Portrait of Older Underbanked and Unbanked Consumers: Findings from a National Survey,” a new report examining the 45+ un- and underbanked population and their consumer financial behavior. Based on data from the 2008 Center for Financial Services Innovation (CFSI) Underbanked Consumer Study, this new report breaks out CFSI survey results across ethnicity, income, and employment status for the 45-64 and 65+ un- and underbanked population, and makes policy and practice recommendations for policymakers, nonprofits and funders.
We know that consumers at all ages need access to safe places to save, manage their money, and access credit on fair terms. Bank On programs are one strategy that holds promise in helping to move more Americans into the financial mainstream. But we also know that banking accounts are not the only solution. In the comments, let us know what you think is working to meet the needs of the un- and underbanked.
Donna V.S. Ortega manages the AARP Foundation's national Financial Innovation work—an effort to increase access to asset-building financial services for low-income older Americans. Formerly, Donna served as Associate Director of Capital Area Asset Builders (CAAB). She Tweets regularly about asset-building, financial services for the un- and underbanked, economic security, consumer protection, and financial literacy as @AARPInnovation.
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