Mayor Kaplan announces launch of Bank On Lauderhill
Program aimed at improving financial futures for half of Lauderhill’s residents
LAUDERHILL, FL —
This announcement will happen at a special Bank On Lauderhill Financial Fair being held at Lauderhill 6-12, 1901 NW 49 Ave., Lauderhill, on Thursday, May 14, 2015 at 7 p.m.
Over half of Lauderhill residents are either unbanked (no checking or savings account) or underbanked (have an account, but frequently use alternative financial services, like check-cashing stores). It’s estimated that a full-time worker without a bank account spends $40,000 over the course of a lifetime just to cash pay-checks. In Lauderhill, 18.4 percent of households don’t have bank accounts – surpassing the national average of 7.7 percent. Likewise, 31.9 percent are underbanked – topping the national average of 20.0 percent. This equates to over 12,000 households in the city.
A few reasons that people cite for not having a bank account include minimum balance requirements, difficulties with an account in the past, lack of appropriate identification, and feeling they don’t have enough money or don’t write enough checks. Bank On Florida has worked to reduce or eliminate those barriers. Participating financial institutions will offer accounts with no or low minimum balance, no or low monthly maintenance fee, and free basic online services. Most partners will make a reasonable effort to open an account even if an individual has had difficulties with an account in the past, such as unpaid overdraft fees. Several partners will also accept alternative forms of identification.
Mayor Kaplan stated, “It is extremely important that our residents are able to develop and maintain a banking relationship to help them handle their financial affairs. With-out it, our residents will have a difficult time trying to grow their savings and properly pro-vide for the financial future.”
Bank On Lauderhill was modeled after the Bank On Florida blueprint created by Florida Prosperity Partnership. The Bank On program, originally started in San Francisco, has spread throughout the country and is based on a collaborative effort with local communities and their financial institutions, local governments, and community-based and non-profit organizations, like the United Way of Broward County.
“A successful relationship starts when a financially educated client is able to choose from a variety of checking and savings account options,” said Bill Mills, Bank On Florida Director and Florida Prosperity Partnership Vice President. “This initiative provides families with reliable choices being offered by banks and credit unions that care about the communities in which they operate.”
Bank On Florida: An asset building and asset preservation initiative
Nationwide as many as 22 million people lack basic checking and savings accounts and are generally referred to as the “unbanked”. It is estimated that one half million Florida citizens are unbanked. Among households lacking a checking account, 52 percent include at least one full time worker. Utilizing the services of a non-bank check casher costs a family an average of $40 per payroll check. These workers could potentially save as much as $40,000 over their career by relying on a low cost checking account versus alternative services to perform their basic financial service needs. Families without accounts do not have a safe place to keep their money. They walk around with cash in their pockets or hidden at home. Robberies are more prevalent around check cashers, especially on payday. Un-banked individuals are especially vulnerable in the event of a disaster. Seven of the ten Hurricane Katrina evacuees didn’t have bank accounts.
There are many reasons why people remain unbanked including; fear of minimum balance requirements since they live paycheck-to-paycheck, mismanagement of past accounts, fear of stringent identification requirements, cultural distrust of financial institutions, or basic lack of knowledge of the products that are available at mainstream financial institutions. Additionally, research shows that the majority of these unbanked households are clustered in lower socio-economic neighborhoods and poor rural communities.
A bank account is the first step to financial security. Without one, it’s harder to get well-priced car loans, credit cards, or mortgages—the exact financial tools needed to climb the economic ladder. Families are then stuck going to costly pawn shops, payday lenders, and rent to own stores.
The purpose of creating a Bank On Florida initiative was to bring Florida’s unbanked population into the financial mainstream by tailoring bank products to meet the financial needs of the population, raising awareness in the unbanked community about the benefits of opening and running a transactional bank account, and providing quality accessible financial education to this population to ensure that the opening of the account is only the first step in their move toward financial security for their families.
The Florida Prosperity Partnership, a statewide coalition dedicated to building financial assets for low and moderate income residents, is providing leadership and coordination for this Bank on Florida. The success of this initiative depends on the strength of the impressive collaboration between state and local government, financial institutions, community non-profits, and financial regulators. This wonderful partnership is tasked with fostering the creation of Regional Bank On programs throughout the state, as well as giving them all the tools that they need to get started with, using Bank On Florida in an eBox.