By: Andy Meek
March 19, 2010
Joe DiNicolantonio, West Tennessee area president for Regions Bank, was one of more than two dozen bankers who got a letter from Memphis Mayor A C Wharton Jr. in the past few weeks.
"Right now, over 33,000 Memphis households do not have a checking account or savings account of any kind," reads Wharton's letter, which decried the payday lenders and other outlets to which those people turn.
That's why the mayor is roping in bankers like DiNicolantonio and others to help him bring those "unbanked" people into the financial fold.
Wharton is involving the city in a campaign to reach out to people who don't patronize or even visit retail bank branches. The effort will start with a gathering at City Hall with bankers and credit union officials at the end of the month.
And it will include prodding area banks to tailor or create new low-cost consumer products.
The group they would be for includes people who may not have a checking account or credit card, something that relegates them to the high-cost and non-traditional lending sector.
Officials from BankTennessee, Magna Bank, Paragon, Wachovia, Hope Community Credit Union and others will join Wharton March 31 to talk about the "Bank On Memphis" campaign and how they can chip in.
The effort is modeled after successful "Bank On" programs in San Francisco, Boston, New York City and elsewhere. It's sponsored by the city, the Memphis branch of the Federal Reserve Bank of St. Louis and the RISE (Responsibility, Initiative, Solutions, Empowerment) Foundation.
"There is no question that Memphis has a dire need for more and better wealth-building and financial literacy strategies," Wharton told The Daily News. "Combating poverty will require a sustained effort over many years, but that fight begins with programs like Bank On."
Wharton sent invites to almost every bank and major credit union in Memphis.
The confab at City Hall will give everyone involved a chance to see how they can participate, whether it's by creating new consumer offerings or by helping craft an educational message.
The campaign will then get its formal kick-off and unveiling to the public later this year.
"Many of these people may have had a bad experience in the past," said Bill Stemmler, vice president and community development officer at Cadence Bank. "And part of this involves making products available to get them back into the financial arena instead of them doing it in a more costly way."
Stemmler said Cadence already offers second-chance products for consumers who may have had problems in their financial past but want to get a fresh start.
Corky Neale, RISE's director of research and innovation, estimated as many as 70 cities are pursuing a Bank On program to some degree.
That number includes San Francisco, which previewed its effort in December 2005, when Mayor Gavin Newsom and treasurer Jose Cisneros invited area bank presidents to a breakfast at the Federal Reserve Bank of San Francisco.
San Francisco launched its Bank On effort, one of the first in the country, in September 2006.
Twenty-two banks and credit unions, including large lenders like Wells Fargo and Bank of America, are listed as partners of Seattle's Bank On campaign.
Evansville, Ind., - about one-sixth the size of Memphis - is following suit. That city's Bank On effort includes 15 bank and credit union partners.
For the people behind the Memphis effort, it seemed like a no-brainer.
Foreclosure and bankruptcy rates in Memphis are traditionally high, and driving much of that trend is the paycheck-to-paycheck existence of debtors more familiar with high-interest check cashing than no-fee checking accounts.
"We've been talking about doing this since at least last fall," Neale said.