Promoting financial education is an objective that I know many of you hold near and dear, especially as it relates to teaching our state’s youth about the importance of saving and maintaining good spending habits. This spring, over 60 banks gave virtual or in-person presentations to local schools through the Wisconsin Bankers Foundation’s Reading Raises Interest Kits. I know you are all dedicated to this spread of education year-round and I thank all of you for the work you do in the name of financial literacy. Still, we face a larger issue that continues to impact households across the country.
Wisconsin is ranked as one of the top states for households that have savings or checking accounts. In 2016, a survey found that 3.4% of its residents were considered unbanked compared to a 5% national average. While our leadership is something to be proud of, we can’t stop here. There are still many people who could benefit from the financial security of having a bank account. As part of WBA’s goals related to Diversity, Equity, and Inclusion (DEI) set by our Board and DEI Advisory Group, WBA continues to promote Bank On as an effective way for banks to offer these unbanked individuals and families with financial services.
Bank On was created by the Cities for Financial Empowerment (CFE) Fund to support the efforts of financial institutions and coalitions in connecting consumers to safe and affordable bank accounts. The reasons that someone may not have a bank account or is underbanked are widely varied, from issues with credit history to an overall distrust of financial institutions. Banks are in a unique position to turn these obstacles and misconceptions around.
Part of this solution has been the development of National Account Standards, which provide a benchmark for account partnerships with financial institutions. These standards include ways of eliminating socioeconomic barriers such as the omission of fees surrounding overdraft, account activation, closure, dormancy, inactivity, or low balances. For those banks that already meet the standards listed, I invite you to apply for the free national certification to raise awareness of your offerings. For those just shy of marking off the core features, I encourage you to review the potential steps toward meeting these requirements. It will undoubtedly offer a life-changing solution for unbanked and underbanked members of your community.
Nationally, nearly half of all Black households are unbanked or underbanked, and Hispanic households currently fall at 42%. Aiming to bring more people into the banking system might not feel groundbreaking at first, but it is a crucial part of bridging a gap and striving toward equity in our financial institutions. In doing so, we can assure that everyone has access to the support, security, and peace of mind that a bank can offer. It is important for banks to be on lists such as the one associated with the Bank On certification as the media, elected officials, and members of the public pay attention to them. Participating in Bank On helps close the economic gap and demonstrates the leadership role your bank and the industry are taking in this important effort. Thank you for considering this certification and contributing to the positive impacts it will have on individuals and the economy throughout our state.
By, Alex Paniagua