In the city of Boston, approximately 10% of households are “unbanked,” meaning they do not have a checking or savings account, and instead rely on costly alternative financial services, such as check-cashing and payday lending. However, establishing a mainstream banking relationship allows residents to deposit funds safely. This is an important step towards being able to access credit and save for the future.
Bank On Boston will connect Boston residents with reliable financial services that can help them save, grow, and access their money. Bank On Boston will also raise public awareness of mainstream banking, expand access to financial education, and help connect residents to other programs of Boston’s Office for Financial Empowerment (OFE) such as the Roxbury Center for Financial Empowerment, the Boston Tax Help Coalition, Boston Builds Credit, and Boston Saves.
Bank On Boston was announced on October 25, 2017, and will be fully launched in early 2018. The program is part of a nationwide movement of Bank On programs led by Cities for Financial Empowerment (CFE). The design and launch of Bank On Boston has been led by OFE, the Mayor’s Office of New Urban Mechanics (MONUM) and the CFE Fund.
Why Bank On Boston?
- In Boston, approximately 10% of households are unbanked and 20% of households are underbanked.
- Based on typical fees at check-cashing locations, a household with an income of $30,000 per year can spend up to $2,400 annually simply cashing their paychecks. Those funds could instead be put towards savings accounts, children’s savings accounts, college savings plans, etc.
- This financial challenge disproportionately affects low-income families in Boston and nationwide.
- Boston has 45 check-cashing locations, and 26 (or 57%) are in Roxbury, Dorchester, and East Boston. Those three neighborhoods only have 31 (or 12%) of the city’s 267 commercial bank branches.
Bank On Boston Coalition
The Bank On Boston Coalition is bringing together municipal officials, government agencies (City, State, and Federal), financial institutions, and community organizations to launch and guide Bank On Boston. Thus far, coalition partners include the Federal Reserve Bank of Boston, the Federal Deposit Insurance Corporation (FDIC), the Massachusetts Community and Banking Council (MCBC), Action for Boston Community Development (ABCD), United Way of Massachusetts Bay and Merrimack Valley, two additional City of Boston agencies, and nine financial institutions. Together, they analyze the landscape of financial services offered throughout the city, gather resident input, and establish program processes and policies. Currently, the lead organizations on the coalition are OFE and MONUM. Chairs will be announced soon.
Bank On Boston Coalition partners include:
Boston Federal Reserve Bank
Federal Deposit Insurance Corporation (FDIC) Boston Alliance for Economic Inclusion (BAEI)
Massachusetts Community and Banking Council (MCBC)
Action for Boston Community Development (ABCD)
United Way of Massachusetts Bay and Merrimack Valley
City of Boston Department of Health and Human Services (HHS)
City of Boston Mayor’s Office of Immigrant Advancement (MOIA)
Bank of America
Blue Hills Bank
Boston Private Bank and Trust
City of Boston Credit Union
East Boston Savings Bank
This list is growing and all financial institutions are welcome to join.