While national research indicates 30 percent of households making less than $25,000 a year have no checking or savings account, almost 38 percent of Savannah households (or, approximately 10,000 people) in the high-poverty census tracks report having no bank account. These households are referred to as the "unbanked." They rely on both banks and non-bank check cashers to manage their income; they use non-banks to cash their paychecks, pay bills, borrow money, and/or wire money, and in some cases to buy groceries or gas.
A 2008 "Neighborhood Financial Services Study," conducted by Prof. Deden Rukmana of Savannah State University's Urban Studies Program for Step Up, found that residents who rely on non-traditional financial services pay an average of $34.60 monthly to cash paychecks and about 23% APR for title and goods pawned.
In 2007, a Banking Task Force was formed in Savannah with the broad goal of helping families access traditional financial services to convert their wages into wealth, with an initial focus on connecting qualified households to appropriate bank accounts. The task force has developed a "Bank On Savannah" campaign.
"Bank On Savannah" is a joint effort of area banks, Step Up's Banking Taskforce, the FDIC and the City of Savannah. Savannah joined San Francisco and Seattle in developing this campaign to help everyone to enter the financial mainstream and start saving for the future.
This initiative includes the following strategies:
- Develop common criteria with financial institutions for a Bank On Savannah product;
- Implement a marketing and media campaign throughout 2009-10 with a formal launch in 2009;
- Link Bank On Savannah initiative with financial education classes and community centers;
- Offer Bank On Savannah accounts at Volunteer Income Tax Assistance sites;
- Offer an Alternate Rapid Anticipation Loan product at two VITA sites and two employment sites; future plans include offering this product through community centers and at additional work sites;
- Increase the number of employees using direct deposit.
Bank on Savannah's goal is to bring 1,000 of the estimated 10,000 un-banked households in Savannah into the financial mainstream by April 2010, by helping them to open a low-cost, starter bank account.
