Step Eleven: Developing a Broader Asset-Building Agenda

Post launch, Bank On program leaders should build upon and improve their programs by reaching more un- and underbanked residents, using the program infrastructure to develop a more robust asset-building agenda and to improve program components such as financial education or evaluation. For more information on local asset-building strategies, see Building Economic Security in America’s Cities: New Municipal Strategies for Asset Building and Financial Empowerment.

Expanding the Scope of a Bank On Program

Bank On leaders should continue to improve and expand the existing program by reaching out to new financial institutions and community organizations, or incorporating new products and services that are appropriate for the underserved market. Typically, there are opportunities to strengthen other specific components of the program, such as financial education or evaluation. Finally, program leaders can infuse a commitment to financial empowerment into the community’s broader service delivery efforts.

Offering New Products and Services

Programs that have expanded their Bank On initiatives offer some of the following products and opportunities: prepaid debit cards; short-term, small-dollar loans (typically under $1,000) with a low or capped interest rate (typically an APR under 36%); credit building and repair services; acceptance of alternative data for evaluating credit and awarding alternative loans; and innovative savings options, such as linked savings accounts, 529 college savings plans, Individual Development Accounts, Individual Retirement Accounts, savings bonds and prize-linked savings products.

Connecting Unbanked Tax Filers to Asset-Building Opportunities

Bank On programs can coordinate with local Earned Income Tax Credit (EITC) outreach and Volunteer Income Tax Assistance (VITA) site strategies to reach potential new customers, provide unbanked tax filers with quick access to their refunds (in some communities, up to 50% of VITA site filers lack a bank account), and offer alternatives to a costly refund anticipation loan.

Working with Employers

Bank On program developers often work with local employers, including the city itself, to promote direct deposit of paychecks into a Bank On account. Direct deposit provides a “win-win” for a Bank On program because it encourages unbanked employees to consider safer and cheaper financial transaction options and provides a cost savings for employers since direct deposit is cheaper than issuing paper checks.

Protecting Public Benefits

Millions of Americans receive monthly federal benefit payments by paper check, putting their money at risk of being delayed, lost or stolen. By encouraging the use of electronic payments, a Bank On program can help residents better protect their federal Social Security, SSI and VA Compensation and Pension benefits and receive those benefits more quickly.

Targeting Specific Populations

As a Bank On initiative becomes established in the community, programs should consider targeting tailored products toward specific segments of the un- and underbanked population. For example, a community with a college or university may have a disproportionately large number of young adults who are un- or underbanked. A prepaid debit card offered as part of a Bank On initiative’s product suite may be appealing to this population and can help introduce them to the financial mainstream.