FORT WAYNE, Ind. (WANE) - The City of Fort Wayne has partnered with several area financial institutions, in hopes of reducing the number of people who are unbanked or underbanked. The partnership led to the creation of Bank on Fort Wayne .
According to Brent Wake, the city's legislative and business liaison, close to 28,000 households are either unbanked or underbanked in the Fort Wayne area.
"Underbanked are those individuals who have accounts, such as a basic checking or savings account, but still utilize alternative financial services," Wake said.
Alternative financial services include payday loans, check-cashing services, and other quick access to cash services.
"We've seen a statistic that over the course of a working adult's life, they may spend up to $40,000 in fees and high-interest rates utilizing check-cashing loans and payday advances," said Melissa Shaw, the communications manager at 3Rivers Federal Credit Union .
A wide variety of people can potentially be classified as underbanked.
"We're talking about folks who have had at least some college," Wake said. "We're talking about the vast majority of individuals are working. We're not talking about just lower income, or stereotypical individuals."
Bank on Fort Wayne began in October of 2011. According to Wake, the city started developing the program in 2009.
"They wanted to devise a program or initiative that would help folks get back to the financial mainstream, if they wanted to do so, " Wake said.
Shaw gave a list of reasons why people don't have a bank account or choose to not use the one they have.
- Convenience is often cited. These alternative financial services are often located in close proximity to low-income areas.
- Alternative service providers are attractive because they provide individuals, who are often living paycheck to paycheck, instant access to their money.
- A lack of financial knowledge to navigate through the mainstream checking, saving and loan product options in their communities.
- Some have no choice, They are unable to open a bank account due to prohibitively high minimum balances and monthly service charges.
- Some do not have access to proper identification
- Banks are just intimidating. It's guys in blue suits dealing playing with money on Wall Street.
Bank on Fort Wayne tries to address all these issues, and educate people on their banking options.
"We want folks to understand what services are out there," Wake said.
Along with the 10 educational partners, 14 area financial institutions have signed up to help the city reduce the number of underbanked households.
"3Rivers, and other financial institutions like us, we're all aimed to educate consumers, and to let them know there are alternatives," Shaw said. "And to let them know it will not cost them as much to start building and saving for a better future."
The Bank on program began in San Francisco. Wake said city leaders first heard of the program when Bank on Evansville began in the southern part of the state.
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