12/21/2008 - It started when San Francisco Mayor Gavin Newsom and Treasurer José Cisneros developed a program to encourage low-income families to qualify for the federal Earned Income Tax Credit program. The city was providing a modest financial incentive for households to apply for this anti-poverty effort.
Cisneros noted that many of the families receiving this government assistance did not have traditional bank accounts.
"It just tore me up to think that literally thousands of these people were taking these checks to check-cashing places, where they would have to pay $10, $15 or $30 to cash a check for $100 or $200," Cisneros said last week.
Matt Fellowes, director of the banking opportunities project for the Pew Charitable Trusts, said the national interest in such a program has been growing rapidly. He said about 40 cities have contacted the trust for guidance on how they can inaugurate similar programs.
"A lot of these people have never had a bank account, and their families have never had a bank account, and when they walk into a bank it's very confusing ... the fees are not very transparent," Fellowes said. "These programs are meant to dispel some of that mystery."
Read the full editorial S.F. Shows the Way on Low-Income Banking on the San Francisco Chronicle's Web site.
Pew is no longer active in this line of work, but for more information visit the Safe Banking Opportunities Project on PewHealth.org.