Memphis Mayor AC Wharton has a plan to bring banking to areas that don’t have banks:
According to the Pew Research Center, there are between 30,000 and 50,000 people in Shelby County right now who do not use any kind of mainstream financial institution. Bill payments, utility payments, and loans are transacted at title loan establishments and check cash businesses which often charge interest rates of over 300%. The annual cumulative household wealth that is lost by this “unbanked” population to high interest fees is in the millions.
Bank On will combat this by asking banks and credit unions to develop checking accounts and savings accounts that are appropriate and targeted towards low-income households. After these products are developed, the banks work closely with non-profits and community groups to promote them.
This is especially important since the State Legislature effectively killed legislation to better regulate payday lenders. Too bad the subcommittee which is split evenly 5 to 5, couldn’t get these bills through.
Brining in competition to these lenders from reputable financial institutions could have a positive impact on the communities and help educate the residents of these areas about managing their finances.
For More information on Bank On Memphis, contact Corky Neale at the RISE Foundation.