Community Dividend

Bank On gets its game on

Bank On, a customizable program for helping unbanked individuals join the financial mainstream, is catching on in communities across the country.

May Xiong | Director of Employment and Training Programs, Project for Pride in Living.

Published October 1, 2011  | October 2011 issue

Since its launch in San Francisco in September 2006, the Bank On program has captured the attention of financial access advocates nationwide. Bank On provides a customizable, localized model for helping unbanked individuals join the financial mainstream. Most local Bank On programs commit participating banks and credit unions to offer unbanked individuals low- or no-cost accounts with no minimum balance requirement. In addition, participating banks and credit unions may be asked to accept alternative forms of government-issued identification, such as the Mexican Matricula Consular card; expand their marketing and outreach efforts to targeted low-income neighborhoods; and partner with community organizations to offer financial education. While the Bank On model is designed to benefit unbanked individuals, banks can benefit, too, by expanding their customer base and building goodwill and trust in low-income communities.

What began as a local initiative of San Francisco's elected officials, key community leaders, and financial institutions has now grown to more than 35 local Bank On programs in 20 states. So what attracts cities to the program? For starters, Bank On is low in cost to implement and requires few personnel. Also, according to Laura McComas Fischer of the National League of Cities (NLC), a national nonprofit organization that has helped cities replicate the Bank On model, the program is "locally driven." Instead of following a one-size-fits-all concept, the Bank On model can be adapted to meet the needs of the community.

Implementing a Bank On program requires cross-sector expertise, making partnerships a key factor. Financial institutions play the role of providing access to products and services; local government generally plays a leadership role, which involves convening partners and calling them to action; and community-based organizations play the role of organizing, referring, and providing support services so that unbanked households are ready to access mainstream financial products.

The NLC has provided many hours of technical assistance to cities, states, and regions interested in launching their own Bank On programs. Based on its experience, the NLC has developed best practices, answers to frequently asked questions, and other information for prospective Bank On partners. These resources are collected in a 112-page tool kit, Bank On Cities: Connecting Residents to the Financial Mainstream, released by the NLC in April 2011. Additional Bank On resources can be found at, an interactive website created by San Francisco's Office of Financial Empowerment.

What are some program insights from the NLC? Fischer points out two of the biggest take-aways from the tool kit. First, each Bank On program needs a central champion, such as a city mayor, who is highly visible and can provide consistency for the program's messaging. Second, developing strategic partnerships early on is a key success factor. For example, involving federal regulators and other government agencies can help attract financial institution partners.

According to the NLC, as of July 2011, 35 cities, four states, and three regions have fully implemented Bank On programs. So far, informal estimates indicate that the programs have created nearly half a million new bank accounts and drawn participation from 261 community-based organizations and 422 banks. In the Ninth Federal Reserve District, one Bank On program is currently under discussion and one is in its infancy. The former is in the Minneapolis-St. Paul area, where a task force commissioned by the Minnesota legislature began meeting to explore the idea in the spring of 2011. The latter is located in Rapid City, S.D., and is co-chaired by Rapid City's Community Development Division and Consumer Credit Counseling Service of the Black Hills. The Bank On Rapid City project group consists of only a few staff members, but it is strongly supported by local community-based organizations, banks, and credit unions. Bank On Rapid City was launched in 2010 as part of a one-year NLC technical assistance project supported by the Annie E. Casey Foundation and the Ford Foundation. The NLC is also working with CFED (Corporation for Enterprise Development), the New America Foundation, and San Francisco's Office of Financial Empowerment to help the U.S. Department of the Treasury develop plans for Bank On USA, a proposed program that, if funded in the 2012 federal budget, may provide cities with federal grants and other supports so they can develop or improve local Bank On efforts.

Fischer and other Bank On proponents hope that as more guidance, support, and dollars become available, more communities will join the effort to help their unbanked members access affordable, mainstream financial services.

For more information on the Bank On Program, including the NLC's Bank On tool kit, visit or contact Laura McComas Fischer at 202-626-3056 or

May Xiong is the director of employment training programs for Project for Pride in Living, a Minneapolis-based nonprofit organization that works to help low-income families achieve greater self-sufficiency through housing, employment training, support services, and education.

"Unbanked" defined

The Federal Deposit Insurance Corporation's 2009 National Survey of Unbanked and Underbanked Households found that approximately 9 million households in the United States are unbanked, defined as not currently having or never having had a banking relationship. According to the Center for Financial Services Innovation, key reasons why individuals do not have banking relationships include being concerned about the costs associated with having an account, being worried about having an account denied because of past financial mistakes, having a mistrust of financial institutions, and not having a Social Security Number. With no access to mainstream financial services, unbanked households are much more likely than other households to turn to alternative services such as payday lenders and check cashers to meet their financial needs. These types of service providers often charge high interest rates and fees and do not provide a means to save and build assets.