Think about this for a minute. If you don’t have a checking account, you can spend up to $40,000 cashing your paycheck over your lifetime. Now, what if you are only making $30,000 a year in gross income? The numbers don’t add up, and in Willis, TX 27% of households are unbanked, meaning they have neither a checking account nor a savings account and 30.8% are underbanked, meaning that they have a checking account and/or a savings account, but have used alternative services other than their banks. In Montgomery County, 5.8% of households are unbanked and 20% are underbanked. These statistics come from the Assets and Opportunity Local Data Center and these are why Bank On Montgomery County has been in the works for the last year and is planning to launch their initiative through Easter Seals of Greater Houston in Early 2016.
Bank On isn’t a new idea, and has been around since 2002, when it was started on the Federal level in the United States Department of Treasury, when they noticed that a large percentage of the population didn’t have checking accounts. So they created what they called, First Accounts. In 2006, the FDIC created the same system for low income earners so there would be economic inclusion. Eventually the states got involved.
San Francisco was the first city to really adopt Bank On, which targets low income families that have no bank and use alternative services to cash checks, get cash and obtain loans. Their model was successful and is still being used today and is now in over 100 cities across the nation, including Bank On Houston, which is through Harris County. Bank On is a platform that brings together all resources to the people and brings them to the banks and provides them financial education, as well as a way to save and realize that they can own assets.
Bank On Montgomery County
Bank On Montgomery County is going to be offering the 47.5% of the households in Willis and the 18% of the households in Montgomery County that are considered to not have sufficient net worth to live at the poverty level for three months with the absence of income the opportunity to change that. As of now, they are partnered with four major banks that will be offering minimum balance low fee or no fee loans and financial education, as well as checking accounts to these households. These banks include:
- Woodforest National Bank
- BB & T
- Compass Bank
- Chase Bank
Bank On Montgomery County is also partnered with several other non-profits and will have a navigator who will be located in Willis and can point anyone in the right direction. But, the focus is to get the people who live and work in the these communities and are unbanked banked, so they can build assets and still live and work in these same communities. Bank On Montgomery County will also have a website, where people will be able to sign up and visit the various vendors that are offering services, which will be launched soon.
Why Bank On Montgomery County
In the Willis area alone, almost 3/4 of the households are in ‘liquid poverty’. They are working and surviving, but they aren’t stable. Almost 60% are unbanked or underbanked. The community is being priced out of the market but they are also the workers of the community. They are the policemen, the firemen, the construction workers and they are paying taxes, they just aren’t putting their money in a bank. There isn’t a correlation to race or ethnicity when it comes to who is unbanked, and Bank On Montgomery County shows them where to go to get a loan and put their money and where to cash a check.
Bank On Montgomery County will bring low-cost mainstream financial products to the unbanked and under-served residents of Willis and Montgomery County.
For the long term, this needs to be embedded into the community and needs to be a sustainable resource. It needs to not be exclusive to just low income households, but this is also good for the elderly, students and others. It is about raising awareness and testing the waters to see what the needs are in the community and to get a clear picture as to what resources are working and not working and what needs to be amped up. The strength of the collaborations will bring everyone together, and really help the under-served residents in our counties.