How Banks Are Helping Low-Income Americans Save for Their Futures
Bank On certified accounts are providing affordable and safe banking to millions of unbanked and underbanked consumers.
With the recent rollout of Child Tax Credit checks, there's a continued need among unbanked populations in America for access to safe banking products and services. Recently, the Cities for Financial Empowerment Fund (CFE Fund) announced in a press release that more than 100 bank and credit union accounts now offer Bank On certified accounts.
These accounts provide appropriate banking transactional accounts to millions of unbanked and low-income Americans across the country. Here's a look at how the CFE Fund and Bank On coalitions are providing affordable and secure accessibility to emergency relief funds like stimulus payments and tax credit checks.
What is Bank On certification?
Bank On certification is a national standards program designed by the CFE Fund to identify crucial banking features that meet the needs of all consumers in the U.S. Banking features included in the standards set include low costs, no overdraft fees, and access to transactional tools like online bill pay and debit cards or prepaid cards.
As of today, there are now 108 accounts certified as meeting Bank On national account standards. Data from the Federal Reserve Bank of St. Louis shows that 75% of consumers opening a Bank On account at a reporting institution were new banking customers. Also, nearly 60% of Bank On certified accounts were opened in areas of the U.S. where people of color account for 50% or more of the population.
Banks and credit unions can apply online with accounts they believe meet the national Bank On account standards. The list of certified accounts includes large financial institutions and smaller banks and credit unions who've joined to provide convenient and affordable banking access.
How the Cities for Financial Empowerment Fund is helping communities
As the federal government continues to address Americans' needs through emergency payments, individuals need adequate access to receive and use those funds to pay bills and other expenses and save money.
By setting national standards and empowering local coalitions across the U.S., the CFE Fund is helping to connect consumers with banking access to meet their financial needs. Nearly 5% of U.S. households (or 12 million adults) are unbanked, meaning they don't have a checking or savings account. Almost 24 million more Americans are considered underbanked, only relying on fringe banking services. Across the country, 48% of Black households and 42% of Hispanic households are considered unbanked or underbanked.
The CFE Fund supports almost 90 local Bank On coalitions across the country to bring proper banking services to vulnerable populations. Local coalitions partner with local governments, financial institutions, and community organizations to open opportunities in unbanked and underbanked communities. The CFE Fund provides grants and other assistance to support these efforts.
Access to a safe transactional account helps individuals save money on unnecessary fees, build up savings and credit, and provide a safe place to keep their money. Through Bank On certified accounts, low-income Americans can work towards financial stability.
Discover becomes the first digital bank to meet Bank On standards
Recently, Discover made headlines for meeting Bank On national account standards. Not only are they among the dozens of banks and credit unions to achieve this standard, but they also became the first digital bank to meet Bank On national standards.
Discover offers a no-fee Cashback Debit account. The account gives consumers access to over 60,000 fee-free ATMs across the U.S. in addition to helpful features like online bill pay and check depositing. The account also earns 1% cash back on up to $3,000 in eligible debit card purchases each month.
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