If imitation is the sincerest form of flattery, then the Bank on San Francisco program should be blushing after the state announced Thursday it would begin a similar initiative to help Californians obtain bank accounts.
Since its launch in 2006, the Bank on San Francisco program, which provides financial education and opportunities to open a bank account at a mainstream bank, has enrolled more than 11,000 residents previously without an account, according to the City Treasurer’s Office.
Roughly 50,000 households had neither a checking nor a savings account, according to city officials’ estimates. City Treasurer Jose Cisneros said for some it’s a cultural issue, others do not trust banks while others simply may have never known anyone with an account. Other familiar obstacles to creating an account are the lack of a driver’s license or Social Security card or no money for a minimum balance.
If residents don’t have their money in a bank they’re either carrying large sums of cash or using check-cashing companies or payday lenders, which have high fees and interest rates that banks do not have, Cisneros said.
The Bank on California program, announced by Gov. Arnold Schwarzenegger on Thursday, would similarly educate families on money management skills, the benefits of bank accounts, and create baseline criteria that participating banks will use to offer accounts, according to the Governor’s Office.
In San Francisco, a moratorium on check cashing and payday lending companies went into effect in December, prohibiting new storefronts from opening within a quarter-mile of any of the roughly 56 current companies and banning outright new stores in certain areas, according to the Treasurer’s Office.