Bank on San Francisco is the first comprehensive program in the United States dedicated to helping people without access to mainstream financial institutions — the “unbanked” — get accounts at partner bank and credit unions. Founded in 2006, Bank on San Francisco has become a model for similar programs across the nation.
THE IMPORTANCE OF A SAVINGS OR CHECKING ACCOUNT
When people don’t have an account at a bank or credit union, they’re vulnerable to a number of financial threats. Check-cashing services hit them with sky-high service fees. Predatory lenders trap them in cycles of debt. Because they keep money in cash, a loss or theft or disaster can wipe them out.
A checking or savings account is a critical part of financial empowerment. With an account, people keep more of their money. They build a relationship with a financial institution — essential for saving, borrowing, and long-term financial planning. When people are banked, they’re in a position to contribute to the overall health of the City.
THE STORY OF BANK ON SAN FRANCISCO
In 2005, officials of the City and County of San Francisco looked into the number of households in the city living without a checking or savings account. The results found about 50,000 unbanked households. Disturbingly, that figure included approximately half of San Francisco’s adult African-Americans and Latinos.
City officials looked at the data, and determined that San Francisco had a compelling interest in helping the unbanked open accounts, as a first step toward financial empowerment and a stronger community.
In December 2005, a committee comprising the Treasurer’s Office, the New America Foundation, the Federal Reserve Bank of San Francisco, and the nonprofit organization EARN worked with local community organizations, banks, and credit unions to develop a new program to bank the unbanked. This coalition eventually became Bank on San Francisco. Its initial goals were:
- CHANGE POLICIES. Create more opportunities for lower-income clients to enter the financial mainstream.
- MODIFY ACCOUNTS. Create products without high fees or minimum balances.
- RAISE AWARENESS. Help unbanked people learn about the benefits of keeping their money in checking and savings accounts.
- PROVIDE FINANCIAL EDUCATION. Help San Franciscans learn more about how to use, manage, and save money.
Bank on San Francisco ultimately partnered with fourteen banks and credit unions. The group set an initial goal of banking 10,000 unbanked San Franciscans in two years. Results have been strong: the program has helped bank an average of 10,000 people per year since launch.
A NATIONAL MODEL
Bank On San Francisco’s success attracted national attention. To help other cities start their own programs, the National League of Cities created “Bank on Cities” and the US Department of the Treasury has begun work on a national “Bank on USA” program. More than 100 cities have launched, or started planning, a Bank On program.
To provide technical assistance to support these efforts, the San Francisco Office of Financial Empowerment partnered with the National League of Cities and the James Irvine Foundation to create joinbankon.org, a web portal offering tools and resources for other cities planning Bank On programs.
BANKING THE UNBANKED. Unbanked San Franciscans have opened more than 10,000 checking accounts per year since 2006.
NATIONAL MODEL. Over 100 Bank On programs launched or in development across the United States. The National League of Cities created “Bank on Cities” and the US Department of the Treasury is developing “Bank on USA.”
KEY PARTNERS AND SUPPORTERS
- Federal Reserve Bank of San Francisco
- New America Foundation
- Bank of America
- Bank of the West
- East West Bank
- Community Trust, a division of Self-Help FCU
- Northeast Community Federal Credit Union
- Patelco Credit Union
- Redwood Credit Union
- San Francisco Federal Credit Union
- Spectrum Federal Credit Union
- Union Bank
- US Bank
- Wells Fargo
Manager, Policy and Programs