Talking about Bank On Acadiana with Angela Morrison
We recently had a conversation with Angela Morrison about Bank On Acadiana. This is a program that First Pioneers is delighted to be a partner in. Angela is Chief Impact Officer with United Way of Acadiana.
Explaining what Bank On Acadiana is.
Following a national model, Bank On Acadiana is a collaborative voluntary initiative that's drives to bring together financial institutions like yours, community organizations, local governments, and federal and state regulatory agencies to help the unbanked of Acadiana open startup bank accounts. It also sometimes gives second chances so they can better enter the financial mainstream where they can really do a good job of saving, building credit, and investing for the future.
Bank and credit union partners offer no cost or low cost checking accounts to increase banking accessibility for all. People who are not able to access affordable, reasonable, trustworthy, financial services are now able to do this because as a coalition, we are making people aware of the opportunities.
Bank on Acadiana is modeled after the successful Bank On San Francisco program, which began in 2006 and resulted in over 10,000 new accounts open in the first year. And that's amazing, right? B ut San Francisco is a large metropolis, but when we talk about the Acadiana area, we're talking about over 350,000 people that make up our region. And in that region, there's probably about 10-12% of that population that are un-banked. And then when we talk about under banked, we want to add on another 20%. So having a coalition of financial institutions, that includes First Pioneers, we want to be able to do more for those that are not being able to access those services.
The programs offered are important for people that have not been taught basic financial education.
So many families don't trust financial institutions for many reasons. It could be various ways. They may have not understood fees. They may not have understood how to balance a checkbook. I know people who come from very moderate-income families that actually don't teach that practice in their home. And the more we have become technology friendly, we rely on our apps to tell us if we have enough money in our bank account to go out to dinner or to buy those new pair of jeans. And sometimes that's not always the best way to do it. So, yes, those practices are not necessarily something that we ingrain in ourselves from early ages. And so one of the things that we can do with the Bank On coalition is to support education systems. And that's why this collaboration is so important to include many different types of institutions and systems, and organizations to include government and school systems so that we can do more of that piece because United Way of Acadiana has definitely embraced Bank On Acadiana as a critical program to improve the financial stability of as many Acadiana residents as we can.
Who does Bank On really help in our community.
I really believe that institutions and organizations that are involved or providing opportunities to focus on connecting with families, individuals, not just for personal and consumer pieces, but also small micro businesses that are unbanked or underbanked in our communities help them gain and then maintain financial stability.
I talked about the percentage of our families that are unbanked. So let me just tell you what that means. Not everybody understands that. To be without any type of financial institution with a checking or even a savings account means you're unbanked. You don't have access to those services.
To be under banked is to have an account but continue to rely on alternative financial services such as check cashing services or predatory lenders like pawn shops and payday loan lenders. These types of institutions, the alternative financial institutions are probably the number one reason why a lot of our families are not financially stable. Because if you're going to a check cashing service, and you're paying 10% to them of whatever that check is, then that's 10% less than you can bring home to feed your family. And so many families that reach out for services are trying to choose between paying for medication or paying for food or having to keep their lights on. And that 10% can make the difference.
Going to payday lenders for loans, those exorbitant fees and interest rates. Can you imagine the cycle you would be in to have that 200% interest rate?
It's true. We've seen so many people that just got caught in that cycle. They needed an emergency loan or the payday lender loans, and they got caught in that cycle, and they just couldn't seem to get out of it. It just sort of snowballs on itself because of those high-interest rates.
That's absolutely one of our goals is to help people find those loans that they can afford to get them where they need to be and pay those back, get their credit score up so they can then get better interest rates.
Right. We talk about the ALICE population. And those are the folks that are hardworking individuals, but they're just one paycheck away from a disaster. And sometimes not even a whole paycheck away.
And with inflation now it's even harder to make ends meet. That little bit of extra you finally made seems to be taken up at the grocery store. I always feel for people because I feel like they don't know how to ask the question or maybe they feel a little embarrassed to ask a question. And there's no need for that. Everybody's been there. You're in a safe place. You can always ask. We'll do what we can.
Well, I always say there are a couple of things that people really have to work with, and that's falling in love and their finances.
They're very personal. And sometimes we want to talk about it and we're excited, but if things don't go well, we have a lot of shame that goes along with that, so.
And that's what I love about the Bank On coalition partners because everyone, every institution that is involved with it is because you have the team on board that can work with your clients or your members with empathy, not just that's your problem or you need to fit in this little piece. This is a program that we really start to ensure that the partners are willing to work with empathy and not just trying to make people what they think they should be exactly.
Can you share with us what kinds of programs that are offered through Bank On?
Yes. By accessing services through our Bank On financial institutions and partners individuals may have access to affordable, low to no cost checking accounts, being able to get into a financial product that they can understand, and not only go forward, but understand and begin to practice positive behaviors that will lead them to some positive results because a lot of times when we walk into something new, we want a quick win, and therefore having a product that will provide that, you will see in six months, people began to have a different behavior and attitude.
So many of our partners are able to do that. They also provide resources through credit counseling. You guys work with your members to help them repair credit, build the credit that they need.
Pathways to home ownership, that's always a very popular piece because we know that's the quickest way to get to financial stability. As well as money management skills, checking accounts, being able to make sure you understand what's on your credit report at all times, and being able to do those things. Those are the kinds of things that we look forward to.
Louisiana has probably the lowest level of financial literacy in the state, just above Mississippi. In a study by the Financial Industry Regulatory Authority, 2.67 answers out of five basic questions about finance were correctly answered by people. So almost two-thirds of all Louisianians spend all they make or more each month on stuff, on just stuff. And so they lack a rainy day fund. We talk a lot about this at our bank on coalition meetings and what we can do to ensure that we meet the needs of people.
Its important for us to do this because it became very obvious during the pandemic a lot of families were financially illiterate and they were unbanked or underbanked and they weren't able to access those resources that were being provided. There were many people who enjoyed the resources and were very happy to get them, but there were so many families that missed out or they're still struggling. Just at the end of this month, a lot of people who were receiving additional resources through Snap and other programs, that's ending you know. All of those pandemic relief efforts are ending. And so it's important that people understand that.
We want to be able to empower people. It's not like it's a band-aid or I'm going to fix-it for you. We want to empower people to do this themselves. And so financial education and coaching is so important and our partners are willing to do that. People who are unbanked, under banked, they're more likely to be victims of theft or fraud because they are using those alternative financial services that are not always safe.
One other way that people can get some infusion of cash and also maybe start a healthy savings is utilizing their tax return. United Way of Acadiana has partnered with other nonprofit agencies in the community to provide our free volunteer income tax assistance services, we commonly call it VITA Sights. We have IRS-trained volunteers that will provide free tax preparation for people who have a household income of $60,000 or less in a year, which is really a good threshold. It serves a lot of people. People who English is their second language because they may have difficulty understanding those steps so the IRS wants to make sure everyone has the same availability and equitable opportunities to file taxes and get their return, as well as senior citizens.
Anyone who's interested in getting that service, they just need to contact 211 to schedule an appointment, or call 337-232-HELP. That's our local information referral center. They will help with scheduling an appointment. But that's another way for people to get cash or money in so that they can go to your institution and they can open a savings account. Many families who take advantage of the earned income tax credit, they can get a good head start towards that home ownership, or paying off some high debt, or doing other things, so that's another way to increase their financial health right now, and that's also part of what Bank On promotes.
Here in the United Way, we have envisioned a world of all individuals and families achieve their human potential. For about 72 years, United Ways across the world were really about strengthening the community by lifting our local nonprofit groups and providing disaster relief services, but today, the United Way of Acadian is a team of community-based problem solvers, who are focused on positivity and impacting the growth and well-being of our community and neighbors. And Bank On is one of those efforts to allow us to do that, because we want to be a conduit and a collaborator.
We are constantly pursuing ways to unite people and organizations with the passion, as well as the expertise to be able to help those citizens that we just talked about who need banking services in an impactful way. So we're proud to be one of the nearly 1800 United Ways in 41 countries and territories. And just in the state of Louisiana, we are one of four Bank On coalitions that are sponsored by United Ways. We are excited to continue and grow this program throughout the Acadiana area.