By: Diane I. Daniels
February 26, 2014
Statistics provided by officials of the Bank On Greater Pittsburgh program indicate that Allegheny County currently has 5.9 percent, or 30,950 unbanked households and 17.4 percent or 91,277 under-banked. According to Mayor Bill Peduto, "More than 10 percent or 14,012 of Pittsburgh residents have no bank account and another 19 percent or 27,209 residents rely heavily on risky alternative financial tools such as payday loans, check-cashing shops, and rent-to-own arrangements. This represents more than 130,000 households living without financial security."
With hopes to assist and to encourage unbanked and under-banked individuals and families to strongly consider opening bank accounts with traditional financial institutions opposed to continuing to rely on check-cashing or other alternative methods of banking, Esther L. Bush; president and CEO of the Urban League of Greater Pittsburgh, Rich Fitzgerald; Allegheny County Executive and Bill Peduto; Mayor, City of Pittsburgh last week kicked off a new initiative called Bank On Greater Pittsburgh.
Endorsed by the National League of Cities and identified by Mayor Peduto as one of the top 100 items on his agenda, BOGP is a collaborative effort of the Urban League, City of Pittsburgh, Allegheny County, the United Way of Allegheny County, the Federal Reserve Bank of Cleveland and nine financial institutions along with numerous community agencies. The partnership is designed to develop pathways to access basic, free or low-cost financial institution transaction accounts and financial education. "The positive impact of connecting unbanked and under-banked consumers with traditional banking services is tantamount to increased income for consumers, who will save immeasurably in fees, since these consumers will no longer be reliant on check cashing services, pre-paid debit cards and payday lenders," indicated Howard B. Slaughter Jr. PhD, chairman of the BOGP and a seven year Urban League Board member. "Our goal is to help unbanked and under-banked individuals gain access to free, low-cost starter or "second chance" financial deposit accounts, as well as access other financial services and financial education."
Slaughter pointed out that one in five Black families does not have a bank account which is seven times higher than White households. He also acknowledged that a close view of a representative sample of the millennium generation earning up to $74,999 yearly is just as likely to use a prepaid debit card as someone earning less than $25,000 yearly. All reasons, he said why it is important for consumers to build wealth and long term financial stability which is greatly enhanced when relying on the use of traditional banking services and products. He said increasing the knowledge of people using the products will have a cognizant impact on the finances of the family and ultimately for the region which is what BOGP hopes to accomplish.
Based on the insight of the Urban League of Greater Pittsburgh and the funding capabilities of the United Way of Allegheny County, the BOGP is collaboration between the two entities. Financial partners covering the Allegheny County region are Century Heritage Federal Credit Union, Citizens Bank, Dollar Bank, 5/3rd Bank, First Commonwealth Bank, First Niagara, Hill District Federal Credit Union, Huntington Bank and PNC Bank. Their responsibilities consist of assisting consumers plan and prepare to build financial relationships and expand their own client base.
Community partners include Action Housing, Advantage Credit Counseling, Allegheny County Housing Authority, Holy Family Institute/Duquesne Light CAP, Housing Authority City of Pittsburgh, Just Harvest, NeighborWorks and South Hills Interfaith Ministries. Offerings of the partners contribute additional resources which enhance services received by clients through educational services and relationship building which can contribute to lifelong benefits.
"Bank On helps people become more self-reliant through better use of their hard-earned dollars," said Bush.
"The values emphasized by the program align with our focus on economic self-reliance, which is the benchmark measurement for the mission of the Urban League Movement.
We cannot achieve parity, power and civil rights without having the means to care for ourselves. Prudent management of our personal assets is fundamental to economic self-reliance."
Because of the strong involvement with the Urban League, county residents outside of the city of Pittsburgh are fully included in the BOGP. Urban League representatives say their Duquesne Family Support Center serves Duquesne, West Mifflin and other neighboring communities and works with residents in the area. The financial partner, Century Heritage Federal Credit Union also has office locations and serves McKeesport, Duquesne and West Mifflin. Citizens, 5/3 and PNC Banks have participating branches in Homestead, and Dollar Bank has one in McKeesport. Partnerships with community agencies, including the Steel Valley Family Center which serves Homestead and Munhall also exist.
People with existing bank accounts are encouraged to participate in the BOGP. Slaughter points out that in many cases they could be construed as an under-banked consumer. "These consumers are equally important to educate on the benefits of establishing a holistic approach to traditional banking services, which will enhance their financial acumen and mitigate their need to revert back to using non-traditional financial services."
Excited about and a cheerleader of the BOGP, Felicia Davis a graduate of the former Peabody High School with a Bachelor's Degree from Chatham University and Masters in Business Administration also a parent speaks from experience about being a victim of a cash advance lender. She outlined that as a result of using a non-traditional funding source to barrow $1000 due to a family emergency and later because of loss of employment it took her 12 months to repay the loan. Payments were $265 at an interest rate of 300 percent at the end of the 12 month term she had paid $3180.00. Her advice is for consumers to take advantage of the BOGP and to learn as much as possible to gain self-sufficiency.