California Launches Statewide Campaign to Bank the Unbanked

Legislators, community organizations, banks, and regulators are uniting to bring stability and financial opportunity to California’s working families. In a hostile and uncertain economy, the Bank on California initiative aims to bring Californians into mainstream banking, thus helping them achieve financial mobility.

The statewide campaign was recently announced as a collaborative effort led by Gov. Arnold Schwarzenegger and the Federal Deposit Insurance Corporation to develop and market starter accounts that work best for unbanked consumers. According to Governor Schwarzenegger, this initiative will educate Californians on the benefits of account ownership as well as provide tools and resources to build their money management skills.

Supporters of Bank on California cite staggering figures such as the 28 million unbanked people living in America, and 1.2 million in California, as an impetus for an aggressive campaign. A recent study exploring the financial implications of such a large number of unbanked Americans found that more than 20 million Americans cashed more than $60 billion in checks each year at nonbank establishments, and a full-time worker could save nearly $40,000 by using a low-cost checking account instead of high-cost check-cashing services. To learn more about this study, visit the Brookings Institution.

Proponents cite the success of a similar, smaller-scale program, Bank on San Francisco, as a model for bringing the unbanked into the financial mainstream. This initiative, a joint effort of California Treasurer Jose Cisneros, the Federal Reserve Bank of San Francisco, and the nonprofit group EARN, resulted in the opening of nearly 10,000 low-cost, starter bank accounts in one year.

The success of the Bank on San Francisco campaign as well as the great level of support behind Bank on California shows that various partners can come together in order to deal with the problem of unbanked people in America. Organizations such as the Shriver Center and others concerned with moving people from poverty to prosperity can begin to lay the foundation for a similar effort in Illinois. 

To learn more about the Bank on California and Bank on San Francisco initiatives, visit http://gov.ca.gov/index.php?/press-release/8597/, or contact Dory Rand at doryrand@povertylaw.org or Kelly E. Slay at kellyslay@povertylaw.org.