Bank onSan Francisco

MODEL PROGRAM SAN FRANCISCO, CA

FOUNDING SPONSOR

U.S. CONFERENCE OF MAYORSCOUNCIL FOR THE NEW AMERICAN CITY

F I N A N C I A L E D U C A T I O N F O R A M E R I C A

M A Y O R S ’ N A T I O N A L D O L L A R W I $ E C A M P A I G N

SAN FRANCISCO, CALIFORNIA

DOLLAR WI$EModel Program

Bank on San Francisco

Created by Mayor Gavin Newsom, City

Treasurer José Cisneros, and the Federal

Reserve Bank of San Francisco, Bank on

San Francisco is the first comprehensive

program of its kind to address the needs of

the unbanked. Through a coalition of fifteen

banks and credit unions, nonprofit partners

and government agencies, Bank on San

Francisco seeks to help 10,000 unbanked

San Franciscans open bank accounts within

the first two years of the program pilot.

RIGHT

San Francisco Mayo Gavin Newsom and City Treasurer José Cisneros launch Bank

on San Francisco at an event during Dollar Wi$e Week in September 2006.

MayorGavin Newsom

O N L I N E

www.sfgov.org/bankonsf

C O N T A C T

Leigh Phillips

415.554.4320

leigh.phillips@sfgov.org

U.S. CONFERENCE OF MAYORS

THE PROBLEMAn estimated 50,000 San Francisco households are “unbanked,” meaning they live without access to basic financial services, such as a checking or savings account. Among African Americans and Latinos, approximately half of the adult population does not have a bank account of any kind. With no safe place to cash their checks, pay their bills, and keep their money, these San Franciscans are forced to rely on high-cost check cashers and other fringe financial-service providers. Families who regularly use check cashers can spend upwards of $800 a year to cash checks and pay bills. Those who least can afford it are charged 3% to 10% of the value of their checks just to access their own hard-earned money. Unable to build assets and save for the future, these families are particularly vulnerable in times of crisis, not to mention their increased likelihood of becoming victims of fraud, predatory lending, or other such crimes. In the event of an emergency, such as a fire or an earthquake, families risk losing everything and will be unable to access needed funds remotely. San Francisco is the first city in the nation to seek to address the problems faced by the unbanked and help everyone transition into the financial mainstream. In late 2005, Mayor Gavin Newsom and Treasurer José Cisneros challenged every bank and credit union in San Francisco to partner with the city and the Federal Reserve Bank of San Francisco to create a new initiative called Bank on San Francisco. One year later, the initiative emerged as a coalition of fifteen banks and credit unions united around the ambitious goal to bank 10,000 unbanked San Franciscans during the first two years of the project. Over the course of a year, the Office of the Treasurer and the Federal Reserve worked with banks and credit unions to create an initiative to:• Increase the supply of starter account and bank

products for the low-income, unbanked market. They did so by developing baseline criteria for these products that must be met by all participating institutions.

• Raise awareness among unbanked consumers of the

benefits of account ownership.• Provide quality money management education.• Clamp down on the proliferation of check cashers and

payday lenders.• Raise citywide awareness of the unbanked problem and

potential solutions.

THE PROGRAMFocus groups conducted with unbanked consumers in San Francisco reveal that they would prefer to have a bank account than to use check cashers. However, many have serious concerns about the cost of a bank account. Some are worried they will be denied an account because they have made mistakes with a bank account in the past. Others believe that without a Social Security card or California state ID they are simply not eligible for an account. In addition to these “hard” barriers to banking, some believe they simply do not make enough money to have a bank account, or fear they will be disrespected or made unwelcome if they enter a mainstream bank or credit union branch. The Bank on San Francisco Steering Committee is comprised of staff from the Treasurer’s Office, the Federal Reserve Bank of San Francisco, and the Earned Asset Resource Network, or EARN, a nonprofit organization. The committee worked with banks and credit unions to develop an account that would address the needs of the unbanked market. As a result, all of the banks and credit unions participating in the program have agreed to the following baseline criteria:• Offer a low-cost or no-cost product with no minimum

balance requirement. The structure of many accounts—with high minimum balances and fees—is a key factor

ABOVE

Multilingual advertising posters produced by international marketing firm McCann Worldgroup help spread awareness

of Bank on San Francisco throughout the city’s multiethnic neighborhoods.

COUNCIL FOR THE NEW AMERICAN CITY

keeping the unbanked out of the financial mainstream.• Adapt internal systems to allow customers on

ChexSystems to open “second-chance” checking accounts.

• Accept the Mexican Matricula and Guatemalan Consular identification cards as primary ID. For many immigrants, the barrier to opening an account is having the proper documentation

• Expand marketing in targeted, low-income neighborhoods. Increase the visibility of appropriate products in San Francisco and develop new strategies to reach unbanked customers in low-income neighborhoods.

• Provide a minimum of four financial management training sessions in the community per year.

• Partner with nonprofits in San Francisco to identify customers ready to enter the financial mainstream.

Bank on San Francisco launched as a two-year pilot in October 2006.

OUTREACH AND MARKETINGInternational marketing firm McCann Worldgroup stepped

in to offer a professional marketing and media campaign to promote Bank on San Francisco. The first phase of the campaign was designed to create buzz and generate interest. Anti–check-cashing billboards across the city and advertising on Muni transit buses delivered the message that check cashers “shrink your paycheck”. The second phase of the campaign addresses the barriers to banking and employs the theme “everyone is Welcome”. A series of five posters in three languages is being distributed through community organizations, city agencies, banks and credit unions, and businesses across the city. Over 70,000 trilingual coupons, with basic program information and the names of each participating bank or credit union, have been printed. Of these, 20,000 have already been distributed to 180 community-based organizations, and a further 10,000 to recipients of the city’s Working Families Credit. These materials are available free of charge to every participating bank and credit union as well as to city agencies and community partners. Public service announcements are scheduled to run throughout the year on both television and radio. The Examiner newspaper has agreed to run a quarter-page ad indefinitely promoting Bank on San Francisco. A city-hosted Web site directs clients to the program’s partner financial institutions. The United Way’s Helplink service is managing all Bank on San Francisco customer service by phone, with live phone service available in over 100 languages. In addition, the program has received coverage from the local and national media, and has been profiled in the San Francisco Chronicle, The Examiner, the San Francisco Business Times, and the Bay Area Reporter, as well as on National Public Radio. The initiative is proving extremely popular with community nonprofits, city agencies, foreign consulates, and local businesses that recognize an opportunity to help their clients or employees. An extensive outreach effort is underway to link financial institutions with community partners and create opportunities to open accounts for thousands of residents. Bank on San Francisco is an unprecedented attempt to address a serious, yet solvable, social problem. Through an innovative partnership which draws on the strengths of local and federal government agencies, for-profit banks and credit unions, and a wide range of community partners, Bank on San Francisco is poised to become the first comprehensive program in the nation to address the needs of the unbanked and set thousands of families on the road to financial security.

Text provided by the City and County of San Francisco.

ABOVE

Billboards created by international marketing firm McCann Worldgroup warn about the dangers of check-cashing services.

MAYORS’ NATIONAL DOLLAR WI$E CAMPAIGNFinancial Education for America

202.861.6759 | www.dollarwiseonline.org | dollarwise@usmayors.org

FOR MORE INFORMATIONFor more information on the Mayors’ National Dollar Wi$e Campaign, please contact us at the telephone number, Web site, or e-mail address listed below.