Banking The Unbanked

The Flyer’s Bianca Phillips reports on a City of Memphis plan to make it easier for low-income Memphians to find a use a bank that won’t suck out their money due to fees:

Memphian Autumn Jones hasn’t had a bank account in years, and she doesn’t want one.

“One bounced check totally ruined all my finances, and now I think it’s cheaper not to have an account,” the 31-year-old Berclair resident said. “If you don’t put your money into the bank, you can’t spend money you don’t have.”

Though Jones is perfectly happy without a bank account, a new city-backed program is aimed at bringing people like her back into the mainstream banking system. Bank On Memphis, modeled after programs in San Francisco and Boston, encourages banks and credit unions to develop low- or no-fee checking and savings accounts for citizens without bank accounts.

Consider the following:

Approximately 96,000 people in the Memphis metro area do not have a banking account. Those people spend an estimated $800 to $1,200 a year on check-cashing and money-order fees.

“Check-cashing places charge about 4 to 5 percent of a payroll check, so that may be $25 for a $500 check,” said Keith Turbett, community development manager for Suntrust, one of Bank On Memphis’ participating banks. “For somebody earning at the low end of the pay scale, that’s eating into some grocery money.”


“The number-one reason people are unbanked seems to be that they don’t believe they have enough money,” Neale said. “Along with that, a lot of people don’t trust banks or some people have had bad experiences with banks. They may have had an overdraft and gotten thrown out of the system, and there’s some bad vibes there.”

This is all well and good, but as Polar Donkey told us four years ago, sometimes it’s because all the banks have left the areas where these folks live. ¬†Why has no one addressed that issue?

See Also:
Bringing Banks Where There Are None

1 comment for “Banking The Unbanked

  1. April 8, 2010 at 10:57 pm

    It’s a wild thought, I know, but has anyone considered that the banks are signing onto this because it’s a way to scrape the last few dollars from the community at a time when they desperately need to raise capital?

    Also, I hope someone will be monitoring the situation when banks roll back the “free” programs, raise their fees, and when the poor start getting slapped with the current, exorbitant overdraft charges. It’s SOP for business to get you in the door with freebies and then start charging you (or upping the charges) after they’ve got you.

    Lastly, a lot of the “unbanked” are that way because of past experience with banks. That is, they don’t have the education to know how banking works, or the life skills to discipline themselves with financial tools. They’ve failed in the past and are possible being set up to fail all over again. Is there meaningful education happening to head this off? Are there programs in place to rescue the inevitable failures?

    Just some thoughts.

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