Aurora targeted for Illinois’ “Bank On” program
Giannoulias, Weisner promote checking, savings accounts

October 8, 2009

Aurora will become the second Illinois city to take part in a national campaign aimed at bringing low-income families into the financial mainstream.

As part of the statewide “Bank On Illinois” program, Bank On Aurora will connect qualified “unbanked” households with free and low-cost bank accounts that will help residents save hundreds of dollars a year and put them on the path to financial security. Giannoulias’ office is sponsoring the Bank On program throughout the state and Mayor Tom Weisner’s office is spearheading the initiative in Aurora.

Partner financial institutions will market their products to local families when Bank On Aurora kicks off early next year with a goal of starting a checking account for 1,200 households, or approximately 22 percent of the city’s unbanked households in its first year.

“Not only are families paying high fees, when they can least afford them,” Giannoulias said prior to a kick-off meeting Thursday with the program’s public and private partners. “They are missing out on opportunities to save for emergencies and build wealth. We want to help Rockford families build assets and create financially stable households. That translates to long-term stability and economic viability of local neighborhoods and communities.”

About 5,300 Aurora “unbanked” households currently rely on check-cashers, payday lenders and pawn shops to cash checks, pay bills and borrow money often at a steep cost, according to the Pew Charitable Trusts’ Safe Banking Project. The average unbanked household in Illinois pays about $575 a year simply to cash payroll checks, leaving $22,376 in remaining income, according to Pew.

“I am happy to assist Treasurer Giannoulias in kicking off the Bank On program in Aurora,” said Mayor Tom Weisner. “Aurora is a great proponent of public-private partnerships, and a program that helps people realize that they don’t have to pay for their own money through check-cashing and payday loan services is a good one. As a city, our goal is to continue to strengthen the Bank On program by working with our banks and credit unions to reach out to citizens who will benefit.”

The Treasurer’s Office launched Bank On Rockford last week, aiming to sign up 1,000 unbanked Rockford-area residents from underserved and minority communities for free and low-cost accounts in a year. More than 50 bank and credit union branches and a dozen social services agencies have already begun enrolling residents. The Treasurer’s Office expects to launch more Bank On program in other cities throughout the state during the next year.

Mayor Weisner’s office will manage the local program and social service agencies will provide client referrals and free financial literacy resources. A marketing campaign to promote the program will also target the city’s underserved residents.

To participate in Bank On Illinois, financial institutions must offer free or low-cost checking and savings accounts, “second chance” accounts for people with negative histories, and accept tax identification numbers, Matricula Consular and other foreign IDs in place of Social Security numbers. To qualify for an account, residents must have a history free of identity theft and fraud, and will be encouraged to enroll in financial literacy training courses.

Nationally, 65 percent of unbanked residents are employed full-time and another 24 percent work part-time, Pew reports. However, more than half of unbanked households say they’ve never had a checking account because of misperception and distrust of banks. In response, more than 50 cities have launched Bank On Campaigns to bridge this financial services gap through public-private partnerships.

Started by the San Francisco City Treasurer’s office in 2006, Bank On campaigns enlist community organizations to provide expertise on and outreach to unbanked residents, while financial institutions market and advertise appropriate, low-cost bank account products to these consumers. Elected officials act as an intermediary between the nonprofits and financial institutions, providing materials and tracking data.