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Bank on Illinois program kicks off in second city
NAPERVILLE, Ill. (2/12/10)--The Illinois Credit Union League is helping spread the word about Bank on Illinois, a relatively new program for the unbanked initiated by Illinois State Treasurer Alexi Giannoulias. The program recently kicked off in Aurora, the second city to offer the program in the state.
Click to view larger image Bank on Illinois, a relatively new program initiated by Illinois State Treasurer Alexi Giannoulias, recently kicked off in Aurora, the second city in which it is currently operating in the state. After listening to a presentation stating the need for the program, attendees of the meeting hosted by the state treasurer’s office then broke into committees to begin taking the next steps for the program. (Photo provided by the Illinois Credit Union League)
The two participating credit unions in the program include Earthmover CU and Fox Valley CU. Bank on Illinois aims to offer unbanked residents from underserved and minority communities free and/or low-cost accounts with mainstream financial institutions. The first host city for this program was Rockford, which recently wrapped up its first quarter of implementation. Bank on Illinois is modeled after a similar program launched in 2006 by the San Francisco Treasurer’s Office. Illinois is home to roughly 368,600 unbanked households, including 5,300 in Aurora, which means these households rely on alternative financial services, according to the Pew Charitable Trusts. These alternative bank services are costly, Giannoulias said. The average unbanked household in Illinois pays $574 a year just to cash payroll checks, leaving just $22,376 in remaining annual household income. “Too many Aurora residents are ripped off by check cashers and payday lenders, and become trapped in an endless spiral of debt,” Giannoulias said. “Having access to traditional checking and savings accounts will translate into financial independence and empowerment.” Nationally, 65% of unbanked residents are employed full-time and another 24% work part-time, Pew reports. However, more than half of unbanked households say they’ve never had a checking account because of their misperception and distrust of banks. “By participating, credit unions and financial institutions can promote mainstream banking and financial literacy training,” said Laura Page, policy adviser for the Illinois State Treasurer. “Studies show that distrust of financial institutions keeps many qualified individuals from opening accounts and ‘Bank on’ programs are successful because of the engagement of nonprofit organizations that equip clients with the tools to succeed.” Bank on Aurora has a target launch date of April 1 for the public to begin signing up for the program. Partner organizations, which include local not-for-profit agencies and financial institutions including credit unions, aim to sign up 1,200 individuals in the area in the next year. To participate in Bank On Illinois, financial institutions must offer free or low-cost checking and savings accounts, “second chance” accounts for people with negative histories and accept tax identification numbers, matricula consular and other foreign IDs in place of Social Security numbers. To qualify for an account, residents must have a history free of identity theft and fraud, and enroll in financial literacy training courses.
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