Bank on California Initiative Comes to Fresno

By Denise M. Patterson, CPA (FL)

Financial literacy is one of CalCPA’s key initiatives, and given the current economic environment, this issue is receiving wide attention. In January, the United Way presented a community-based organization meeting to discuss financial education and the Bank on Fresno program. You may be asking: “What is the Bank on Fresno program?” Well, Laura Cullen, chair of our chapter’s Financial Literacy Committee, attended the event and graciously provided the following information from that January meeting. Thank you, Laura!

Fresno is one of five cities selected for Gov. Schwarzenegger’s Bank on California Initiative, which attempts to ensure that residents have access to mainstream financial institutions. Bank on Fresno is a joint effort of the Office of the Governor, Office of the Mayor, Federal Deposit Insurance Corporation, local financial institutions and nonprofit organizations. The United Way of Fresno County is serving as the local organizing agent. A goal has been established to start 10,000 unbanked Fresno residents on the path to financial mobility by helping them to open a low-cost, starter bank account and to access the education necessary to manage it successfully. An unbanked person is someone without an account at a traditional financial institution. Many of these individuals carry their money on their person or store it at home, which can make them susceptible to crime; these individuals are especially vulnerable in the event of a disaster.

Recent market research shows that Fresno has the highest percentage of unbanked residents in the country at 11 percent—twice the national average. The consequences of being an unbanked individual can severely impact a person’s lifetime income, which in turn can impact the local economy and community. According to a research brief from the Brookings Institution, “a full-time worker who utilizes a lower-cost checking account instead of check-cashing services could potentially save $40,000 over their career. Depending on the types of checking accounts, residence, money-management skills and account stability, this same unbanked worker … could generate as much as $360,000 in wealth over a 40-year career. This would be enough to pay about 25 years of retirement, not accounting for the value of Social Security benefits.” (Fellows & Mabanta, “Banking on Wealth: Americas’s New Retail Banking Infrastructure and Its Wealth-Building Potential,” Brookings Institution Research Brief, 1/08).

• Additionally, studies show that most unbanked households have adults with steady jobs and moderate incomes.
• In similar initiatives that target unbanked individuals, the community’s banks have begun to consider these individuals as valuable customers.
• According to the Federal Reserve Bank of Chicago and Brookings Institution, cities where a greater share of residents has a bank account have a higher rate of homeownership and lower crime rate. These are important indicators of the overall economic and social well-being of a community.

During the January meeting, the local coalition identified potential opportunities to help unbanked individuals within the Fresno community. These include:

• Providing assistance with real-life budgeting issues
• Helping the unbanked gain an understanding the financial world, including terminology
• Initiating small, community-based classes that are linguistically and culturally appropriate

You can find more information on the Bank on Fresno program online.
— Denise M. Patterson, CPA (FL)

This entry was posted on Friday, March 13th, 2009 at 1:35 pm and is filed under President's Message. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.