Many of South Florida's low-income families don't have bank or credit union accounts.
Consumers often end up paying excessive fees at check-cashing stores, pay day lenders and rent-to-own stores -- which prevent many from saving money, said Dave Wallace, director of public policy advocacy for the United Way of Broward County.
So the three United Ways in South Florida are starting Bank On South Florida to encourage people to open free or low-cost accounts in banks or credit unions as a way for them to save money and build their wealth.
"An average unbanked individual will spend $1,000 - $2,000 annually in fees simply to cash paychecks at check-cashing stores," said Bill Mills, director of Bank On Florida.
That amounts to millions of dollars a year in the three counties, considering the Federal Reserve Bank estimated that 8.4 percent of South Florida households have no bank or credit union accounts.
Another one out of six South Floridians are "under-banked" -- meaning they could save even more money if they more fully used low-cost or free accounts at banks or credit unions, according to the Federal Reserve.
However, some low-income immigrants have "a cultural mistrust of banks" because of their native countries' corruption that extended into financial institutions, said Broward's Wallace. Many of South Florida's low-income blacks also don't trust mainstream banks.
To help end that mistrust, the three United Ways will partner with South Florida Urban Ministries, Hispanic Unity of Broward County, Urban League of Broward County, Housing Partnership Inc., 211 Network and Consolidated Credit Counseling Services to teach low-income families about how to safely use banks and credit unions.
Wallace said the idea is that the nonprofits' counselors will eventually take their low-income clients to banks or credit unions and introduce them to staff who can help watch over their accounts.
The three United Ways' banking partners include Bank of America, BB&T, Chase, Citibank, Great Florida Bank, Iberia Bank, PNC Bank, SunTrust, Wells Fargo, Community Bank of Broward, City County Credit Union and Power Financial Credit Union.
"Chase is proud to partner with United Way on the Bank On initiative to support the underserved with building new relationships that can lead to financial stability," said Fernando Ruiz, vice president and district manager for Chase in South Florida. "Chase is providing consumers who qualify under the program the opportunity to open up a checking account or to set their own budget and spending limits through opening a Chase Liquid account—a new reloadable service we introduced this week nationwide."
For more information, go to bankonfl.org.
A South Florida native, Terri Williams, who leads the nation's largest minority-owned bank, has been on her own mission -- to help teach urban youngsters whose parents rely on check-cashing stores about money management.
Both generations don't know about interest rates, CDs, checking accounts, or even what it means to "bounce" a check or go to a bank "branch," said Williams, who wrote a children's book, I Got Bank! What My Granddad Taught Me About Money.
But, "it's important for us to manage our money, to think about money," Williams said earlier this year when she was in South Florida encouraging young people to be more financially savvy.
"When children learn the lessons of financial literacy at a young age, they form strong habits that can be life-changing," said Williams who grew up in Indiantown and graduated from Martin County High School before getting an Ivy League education at Brown and Harvard.
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