By Patricia Sabatini
April 8, 2010
PNC Bank has launched a multistate pilot program offering people who don't have bank accounts a way to avoid high-cost check cashing services by cashing their income tax refund checks for free.
With only a week until the tax filing deadline, there isn't much time left to participate.
The goal of the program is to bring the so-called unbanked into the banking system, PNC said. The bank will provide information on opening a savings or checking account, including PNC's Foundation Checking account designed for people with tarnished credit histories. The account has no minimum balance, no monthly service fee and allows unlimited check writing, but limits ATM withdrawals and debit card transactions to $100 each per day. The account requires attendance at a free two-hour money management class run by PNC.
People are not required to open an account at PNC to get their refund checks cashed under the program. PNC will cash federal refunds, plus local and state refunds, as long as people have them cashed at the same time.
"We hope to reach out to unbanked consumers and help them to get familiar with the banking system," said John Florio, community development program manager at PNC.
The free check cashing saves consumers the typical 2 percent fee charged by check cashing stores. On a $1,000 refund check, the savings would be $20.
So far, roughly 100 checks have been cashed under the program, which began Feb. 1 and ends April 30. Refund checks have averaged $1,500, which, if cashed at a check-cashing outlet, would typically cost $30.