San Francisco Mayor Gavin Newsom and Treasurer José Cisneros unveiled Thursday the Bank on San Francisco program to encourage 'unbanked' city residents to open a bank account rather than rely on expensive check cashers.

The program's debut coincides with the mailing of 11,595 checks totaling $2.3 million to San Francisco recipients of Working Family Credits.

"Over the next two years, we plan to bring 10,000 of the 50,000 unbanked San Francisco families into the financial mainstream so they can begin to save and build assets," Newsom said. "We are the first city in the country to undertake such an initiative."

About a dozen participating banks and credit unions have agreed to offer low-income families new products and services to bring them into the banking system.

An estimated 50,000 San Francisco households, representing 15 percent of all households in the city, don't have a checking or savings account. Among African Americans and Latinos, about half of adults are unbanked.

"Thousands of hard-working unbanked San Franciscans will be able to open an account, even if they have mismanaged an account in the past, need to use their Metricula card as ID, or simply want quality financial management training," Cisneros said. "This is a real alternative to high-priced, predatory check cashing and payday lending businesses."

Bank on San Francisco is run in partnership with the Federal Reserve Bank of San Francisco and local non-profit Earned Assets Resource Network or EARN.

San Francisco Supervisor Tom Ammiano, who helped pass legislation earlier this year to place a temporary ban on new check cashing outlets in the city. He and the mayor discussed the high level of crime occurring around these outlets.

Cisneros took the opportunity to make a pitch for direct deposit for those establishing bank accounts.

The Bank on San Francisco program encourages banks to come up with innovative ways to develop products for the unbanked.

In some cases, banks are offering a checkless checking account that is accessed with a debit card to help avoid bounced checks.

The participating financial institutions include Bank of America, (NYSE: BAC - News) Bank of the West, Citibank, (NYSE: C - News) Mission Area Federal Credit Union, Mission National Bank, Northeast Community Federal Credit Union, Patelco Credit Union, Spectrum Federal Credit Union, Sterling Bank and Trust, U.S. Bank, (NYSE: USB - News) Washington Mutual, (NYSE: WM - News) and Wells Fargo. (NYSE: WFC - News)

"Families that use check cashers spend an average of $800 per year to cash checks or pay bills," said Michael Kyle, manager of U.S. Bank's office in San Francisco's Castro district. "Our goal is to let them know that there are banks that will help them keep their money safe and help them achieve financial stability.

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Published September 28, 2006 by San Francisco Business Times

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