Monday April 13, 2009
Louisville is one of eight cities chosen for a national program to encourage low-income families to begin banking with mainstream financial institutions, rather than with pay-day lenders and check cashers who often charge high fees.
The Bank on Cities campaign, by the National League of Cities, will work to help families achieve financial stability by making connections between banks and people at a time when many families are struggling to make ends meet.
“Pay-day lenders and check cashing companies certainly serve a purpose,” Mayor Jerry Abramson said. “But often they take advantage of people in vulnerable situations. This new program will help people learn how to work with our great local banks to start a relationship and build a financial future.”
Abramson said he has appointed John Fischer, assistant director of economic development, to oversee the Louisville campaign. Fischer said his goal is to have all banks and credit unions with branches in Louisville to become part of the campaign. CLOUT, a Louisville advocacy group, estimates that 29,000 households in Louisville do not have bank accounts and instead use payday lenders and other means of cashing their checks.
Modeled after Bank On San Francisco, the initiative was developed by San Francisco Mayor Gavin Newsom and Treasurer José Cisneros. It helps create relationships among local governments, citizens, local banks and credit unions, and community partners to ensure that all residents have access to bank accounts, financial education, and other asset-building opportunities.
Many families, particularly those with low incomes, rely on payday lenders, check cashers and other high-cost fringe financial services for their banking needs. The project aims to expand families’ access to free and low-cost bank accounts to help them keep more of their paychecks, build savings, and establish a credit history.
“This program provides a tremendous opportunity for cities to engage their citizens in an effort to build assets and create financially stable households,” said Kathleen M. Novak, president, National League of Cities, and Mayor of Northglenn, Colo. “The opportunities this program provides are critical to enhancing the broader economic vitality of cities.”
Throughout the one-year project, Louisville will receive intensive technical assistance from NLC through conference calls, web seminars and other events. City officials will develop action plans to outline the city’s goals in the Bank On Cities Campaign, using advice and resources from NLC staff and national experts.
Other cities selected for the project include: Bryan, Texas; Denver, Colo.; Gaithersburg, Md.; Indianapolis, Ind.; Newark, NJ; Rapid City, SD; and St. Petersburg, Fla.
The Bank On Cities Campaign is supported by the Annie E. Casey Foundation and the Ford Foundation.