Fresno CDFI

What is Bank on Fresno?

Fresno is one of five cities selected for Governor Schwarzenegger's Bank on California Initiative, a non-traditional approach to ensure every resident has access to mainstream financial institutions. Bank on Fresno is a joint effort of the Office of the Governor, Office of the Mayor, Federal Deposit Insurance Corporation, local Financial Institutions, and Nonprofit Organizations. With United Way of Fresno County serving as the organizing agent, the coalition set a goal to start 10,000 unbanked Fresno residents on the path to financial mobility by helping them open a low-cost, starter bank account and access the education necessary to manage it successfully.

The convenience and safety of having a bank or credit union account is often taken for granted by a large majority of Fresno residents. Imagine if you didn’t have a bank or credit union account: How much would it cost to cash your checks? How would you pay your bills? Would you be prepared to carry cash at all times? These questions raise issues of personal safety, economic mobility as well as simple convenience.

What does it mean to be un-banked?

A relationship with a mainstream financial institution is an on ramp to economic mobility and affordable financial services. However, thousands of Fresno’s working families are currently “un-banked” with recent market research indicating Fresno has the highest percentage of un-banked residents in the country at 11%, twice the national average. Being un-banked is a difficult place to be in:

It is not safe to be un-banked: Families without accounts often don’t have a safe place to keep their money. Many carry it on their person or store it in the home. This can make them magnets for crime and especially vulnerable in the event of a disaster.

It hurts financially: Without a bank account, people often pay more to conduct their every day financial lives. It is harder to get well-priced car loans, credit cards, or mortgages—all financial tools needed to climb the economic ladder.

According to a research brief from the Brookings Institution, “a full-time worker who utilizes a lower-cost checking account instead of check-cashing services could potentially save $40,000 over their career. Depending on the types of checking accounts, residence, money management skills, and account stability, this same unbanked worker…could generate as much as $360,000 in wealth over his 40 year career. This would be enough to pay about 25 years of retirement, not accounting for the value of social security benefits.” (Fellows & Mabanta, “Banking on Wealth: Americas’s New Retail Banking Infrastructure and its Wealth-Bulding Potential,” Brookings Institutuion Research Brief, 1/08)

This problem is an opportunity:

Mayor Autry, Fresno City Staff, Financial Institutions, Fresno Businesses, Nonprofit Organizations and Federal Partners all see these problems as potential opportunities, and are working collaboratively to help the unbanked and their community.

• Studies show that most un-banked households have adults with steady jobs and moderate incomes.
• In similar initiatives targeting the un-banked, banks have started to see these individuals as valuable customers.
• Research shows that in cities where a greater share of residents have a bank account, homeownership rates are higher, while crime rates are lower, an important indicator of the overall economic and social well-being of a community. (Source: Federal Reserve Bank of Chicago and Brookings Institution)

Asset building strategies that focus on increasing income, building savings and gaining and sustaining assets are successful strategies to fight poverty and create financial stability in a community. Such strategies include a wide range of components from claiming Earned Income Tax Credits and Workforce Development to Individual Development Accounts (accounts for low-income individuals that are “matched” 1:2 for each deposit from the account holder). In all of these cases the on-ramp in the process is to build a relationship with a mainstream financial institution and learn how to utilize its services. Without an account at a bank or credit union the asset building strategies for low-income working families are limited at best.

A true collaborative effort:

Over the past six months, financial institutions have met with a diverse coalition of partners to develop policies and product features that will facilitate banking for unbanked residents. The accounts will focus on starter accounts for first time banking clients and second chance accounts for previously banked individuals with ChexSystems histories.

Starter Bank Accounts

Financial institutions working with partners have designed special starter bank accounts which will provide un-banked clients immediate access to a new account with any one of the participating banks, as well as, access to free financial education. Some of the account features are:

• No or low-cost accounts
• No monthly minimum balance requirements
• Waiver/Refund one set of NSF/overdraft fees per year
• Allow acceptable forms of ID, including the Matricula Consular Card and individual Taxpayer Identification numbers (ITIN)

Second Chance Accounts

For persons placed on ChexSystem for reasons other than fraud, Bank on Fresno will provide an opportunity to gain immediate access to a new account with any one of our participating banks with the following stipulations:

1. If the person has been in the ChexSystem for more than one year, he/she can go to any of the participating financial institutions to access the new account right away.
2. For those persons recently placed in the ChexSystem (less than 1 year), he/she must first attend financial education classes AND pass the Bank on Fresno Financial Education Quiz.

Community-Based Organizations (CBO) and Nonprofits have also invested countless hours designing ways to act as trusted liaisons to neighbors and clients in order to educate on the benefits of using mainstream financial institutions. The coalition consists of CBOs who provide a variety of health and human services, working to offer financial education, free tax preparation, and other asset building opportunities.

Community Partners

Download list of Community Partners (pdf format)