Rockford targeted for Illinois’ first “Bank On” program
Giannoulias, Jefferson promote checking, savings accounts

June 3, 2009

Rockford will become the first Illinois city to take part in a national campaign aimed at encouraging low-income families to begin banking with mainstream financial institutions.

Called “Bank On Illinois,” the program – backed by State Treasurer Alexi Giannoulias, State Rep. Chuck Jefferson and the United Way of Rock River Valley – will connect qualified “unbanked” households with free and low-cost bank accounts that will help residents save hundreds of dollars a year and put them on the path to financial security.

Several Rockford-area financial institutions have already signed up as partners to market their products to local families when Bank On Illinois kicks off in September with a goal of starting a checking account for 20 percent of the city’s unbanked households in its first year.

Rockford is home to approximately 4,600 unbanked households, which means members of those households rely on check-cashers, payday lenders and pawn shops to cash checks, pay bills and borrow or wire money instead of a bank or credit union.

These alternative bank services are costly. The average unbanked household in Illinois pays $574 a year to cash payroll checks, leaving $22,376 in remaining income, according to the Pew Charitable Trusts.

“Not only are families paying high fees, when they can least afford them,” Giannoulias said prior to a kick-off meeting Wednesday with the program’s public and private partners. “They are missing out on opportunities to save for emergencies and build wealth. “We want to help Rockford families build assets and create financially stable households. That translates to long-term stability and economic viability of local neighborhoods and communities.”

Nationally, 65 percent of unbanked residents are employed full-time and another 24 percent work part-time, Pew reports. However, more than half of unbanked households say they’ve never had a checking account because of misperception and distrust of banks. In response, more than 50 cities have launched Bank On Campaigns to breach this financial services gap through public-private partnerships.

Started by the San Francisco City Treasurer’s office in 2006, Bank On campaigns enlist community organizations to provide expertise on and outreach to unbanked residents, while financial institutions market and advertise appropriate, low-cost bank account products to these consumers. Elected officials act as an intermediary between the nonprofits and financial institutions, providing materials and tracking data.

Amcore, Bank of America, Chase and Fifth Third Bank are among the 11 financial industry partners enrolled in Bank On Rockford. United Way organizations will provide community outreach. Rep. Jefferson’s office will manage the program, while Treasurer Giannoulias’ office provides materials and maintains a website.

“Rockford residents are feeling the effects of the dwindling economy, and are wasting hard earned dollars on unnecessary alternative banking fees that could be used for more important expenses, like groceries and medicine,” Rep. Jefferson said. “These new partnerships will serve to benefit the entire community by educating local residents about banking, and explaining that utilizing bank services is a sound financial decision.”

To participate in Bank On Illinois, financial institutions must offer free or low-cost checking and savings accounts, “second chance” accounts for people with negative histories and accept tax identification numbers, Matricula Consular and other foreign IDs in place of Social Security numbers. To qualify for an account, residents must have a history free of identity theft and fraud, and will be encouraged to enroll in financial literacy training courses.

"Fifth Third Bank is honored to be a part of Illinois' first ‘Bank On’ program to reach out to the unbanked households and enable these individuals to build for a brighter future,” said Pat Huisinga, vice president and regional manager of the far west region. “Fifth Third Bank is committed to lifting up communities by investing in the people and organizations in the neighborhoods that we serve. As a ‘Bank On’ partner and through our Community Matters program we will continue with that mission."

Bank On’s nonprofit partners, including Rockford Rescue Mission, will provide clients information on the products tailored to the unbanked and financial education resources to make sure the banking experience is positive.

 “Bank On Rockford will bring an invaluable resource to an often overlooked and underserved segment of our Rockford community,” said Sherry Pitney, executive director of Rockford Rescue Mission.  “Homeless, near-homeless and working poor families and individuals who receive assistance from the Mission and other organizations often have little or no access to affordable financial services, and this program will bring them a giant step forward in their journey to independence and self-sufficiency.”

Rockford will become the first city to kick off the state’s Bank On Illinois program. The Treasurer’s Office expects to launch its second Bank On program in other cities throughout the state during the next year.

For more information, email bankonillinois@treasurer.state.il.us.