Denver Business Journal
By: Mark Harden
October 4, 2010
The city of Denver is joining with Colorado banks and credit unions in a new effort to promote bank services for "underbanked" workers.
The program, announced Monday, is called "Bank on Denver," and aims to promote financial education and greater use of checking and savings accounts by those who don't use them regularly.
"Mainstream financial services provide an important building block to economic stability, prosperity and asset building among our residents," Denver Mayor John Hickenlooper said in a statement. "The Bank on Denver initiative aligns our local banking industry, community organizations and local government to promote greater wealth for our residents and community."
Also involved in the new Denver program are the Colorado Bankers Association, the Independent Bankers of Colorado, Credit Union Association of Colorado, the Federal Reserve Bank of Kansas City's Denver Branch and Mile High United Way.
City officials cited Pew Charitable Trusts data indicating that an estimated 36,000 Denver households do not have bank or credit union accounts. They also noted a Brookings Institute report that a typical full-time worker without such an account will spend $40,000 over his or her lifetime to covert salary into cash.
A Federal Reserve Bank report in June said that 22.3 percent of Coloradans, and 25.6 percent of people nationwide, are "unbanked" or "underbanked," meaning they don't rely on banks for financial services they traditionally provide.
The Fed report said that many of those who don't use banking services are living paycheck to paycheck; have had past negative experience with banks and are uncertain about the benefits of banking; find retailers easier to use than banks for basic payment services; or are uninformed about the process of paying bills by check and waiting for the checks to clear.
Under the Bank on Denver program:
Participating banks and credit unions will offer low- or no-cost checking accounts without a minimum-balance requirement.
Community organizations will work to promote "Bank on Denver" starter accounts to underbanked populations, and participating banks and credit unions will help underwrite the marketing effort.
Financial education classes will be offered starting this fall, covering such topics as household budgets, checking account management, credit ratings, debt management and savings plans.
Officials said the initiative is patterned after "Bank on San Francisco," which led to more than 10,000 new banking accounts in its first year, 2006.
The National League of Cities last year picked Denver as one of eight cities to take part in its Bank on Cities Campaign, providing technical assistance in launching the local effort.
Bank sponsors of "Bank on Denver" are US Bank (gold); Bank of the West, Chase, Denver Community Credit Union, KeyBank, TCF Bank and Wells Fargo (sliver); and Guaranty Bank & Trust, United Western and Vectra Bank (bronze). The U.S. Conference of Mayors provided a $20,000 financial literacy grant to the effort.