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BANK ON COALITION PLAYBOOK Equipping Bank On coalitions for local banking access success.

Last Updated: June 2020


Table of Contents

www.cfefund.org/bankon

Introduction Chapter 1:

3 Bank On Guiding Principles

4

Chapter 2: National Account Standards (2019-2020)

5

Bank On Coalition Financial Institution Partnerships: Chapter 3:  Statement of Principles

6

Chapter 4:

Bank On National Account Standards Validation and Certification: Frequently Asked Questions

7

Chapter 5:

Talking Among Ourselves: The Bank On Listserv

10

Chapter 6:

Local Coalition Strategies for Navigating Financial Institution Partnerships and Account Certification

11

Chapter 7:

Bank On Coalition Logic Model

13

Chapter 8:

Launching or Relaunching a Coalition

16

Chapter 9:

Handout: Financial Institution Benefits of Bank On National Account Certification

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Chapter 10:   Programmatic Banking Access Integration Best Practices

21

Chapter 11:  Bank On National Data Hub: Accessing Local Data

24

Chapter 12:   Bank On National Account Standards: Annotated Standards

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Chapter 13:   Unbanked Engagement Messaging

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Stay tuned for the next Chapter!

Last Updated: June 2020


Introduction

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Dear Bank On ColleaguesAcross the country and for the last several years, Bank On coalitions have taken similar, but diverse local approaches to boosting banking access for the millions of people still outside of the financial mainstream. Local Bank On coalitions generally share two key characteristics: they believe that banking access is critical to individual and community financial security, and they know that real progress takes a joint effort among stakeholders and partners committed to the cause. Along the way, the field has produced best practices and hard lessons learned, both. With the advent of a national platform, the Cities for Financial Empowerment Fund now provides tools, funding, and technical assistance to support local coalition success. These tools include producing the Bank On National Account Standards, capacity grants, research pilots, and now this Bank On Coalition Playbook. This Playbook includes tools and best practices gathered through both local experience and national experts, from advocates and financial institutions, from regulators and community organizations. As the CFE Fund continues to release new chapters to this living and breathing resource, we encourage you to share your ideas, experiences, and needs to help ensure that the Playbook can advance our joint and individual efforts. Thank you! The Cities for Financial Empowerment Fund

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Chapter 1:

Bank On Guiding Principles

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Bank On’s goal is to ensure that everyone has access to safe and affordable financial products and services. Bank On coalitions are local partnerships between municipal officials; city, state, and federal government agencies; financial institutions; and community organizations that work to improve the financial stability of unbanked and underbanked residents in their communities. The Cities for Financial Empowerment Fund (CFE Fund) leads a national movement that supports local coalition efforts to expand banking access for consumers outside the financial mainstream, including through municipal infrastructure. Below are guiding principles for the Bank On movement.

Consumers Should Have Access to Mainstream Banking Accounts • Consumers should not be forced to rely on expensive alternative financial services. • Banking access starts with a basic transaction account, which is the first rung of a financial capability ladder that builds over time to include savings, secured credit, and unsecured loans. Financial Institutions Should Provide Accounts that Meet the Bank On National Account Standards • The National Account Standards outlines the core functionality of a safe and appropriate account. • Consumers should have access to low-cost bank accounts with robust transaction capability, including: – No possibility of overdraft (e.g. checkless checking). – Robust debit card and online bill pay functionality (e.g. avoid need for money orders). Financial Institutions and Policy Makers Should Minimize Barriers to Banking Access • Consumers should not be excluded from opening a bank account because of unfair account screening (e.g. ChexSystems), or unrecognized (appropriate) ID. • Consumers should be able to open accounts online, at a location outside of a bank branch, while still meeting Know Your Customer (KYC) requirements. Bank On Coalitions are an Effective Mechanism for Connecting Consumers with Bank Accounts • Bank On coalitions are a primary tool for implementing the National Account Standards. • Coalitions serve as an effective way of identifying and implementing government integrations. • Bank On coalitions bring together municipalities, nonprofit organizations, and financial institutions. • Bank On coalitions illustrate the importance of municipalities providing leadership, sustainability and scale to financial empowerment initiatives. Government and Employer Integrations are the Best Approach to Achieving Scale • Bank On coalitions can work to identify and integrate bank account opening into government disbursement programs. • Bank On coalitions encourage governments and employers to make payments with direct deposit. A Learning Community of Bank On Coalitions Drive Thought Leadership and Share Best Practices • Local coalitions have the most knowledge about banking access. • The CFE Fund documents and articulates the sharing of best practices. • The CFE Fund synthesizes the experience of local Bank On coalitions to articulate a national perspective to inform policy. • The CFE Fund builds on insights from the field to sponsor original research and produce materials that spotlight issues, promote discussion and facilitate problem solving.

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Chapter 2:

Bank On National Account Standards (2019-2020) TERMS

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STANDARDS

Core Features Transaction Account at Banking Institution

Checking account (including checkless checking); bank- or credit union-offered prepaid

Point of Sale (POS) Capability

Debit card/prepaid card

Minimum Opening Deposit and/or Account Balance

$25 or less If not waivable: $5 or less

Monthly Maintenance Fee

If waivable: $10 or less; offer at least two options to waive fee to free with a single transaction (e.g. direct deposit with no minimum deposit, online bill pay, or debit card purchase)

Overdraft or Non-Sufficient Funds (NSF) Fees

None, structurally not possible (e.g. via checkless checking)

Dormancy/Inactivity Fees

None

Customer Service Branch Access

Free and unrestricted

Telephone Banking

Free and unrestricted (including live customer support)

Use of In-Network ATM

Free and unrestricted

Use of Out-of-Network ATM

$2.50 or less (not including local ATM fee)

Functionality Deposit Capability

Free cash and checks in branch and at ATM, and direct deposit

Bill Pay by Customer

Free

Bill Pay by Financial Institution

Free if available, otherwise at least four free money orders and/or cashier checks per month

Check Cashing for Checks Issued by that Institution

Free

Online and Mobile Banking

Free

Banking Alerts

Free

Monthly Statements

Free electronic; $2 or less for mailed paper

Insured Deposits

Insured by FDIC or NCUSIF

Strongly Recommended Features Account Screening (e.g. ChexSystems, Early Warning Services)

Only deny new customers for past incidences of actual fraud

Alternative IDs (Municipal, Consular, etc.)

Accept alternative IDs

Remote Account Opening

Accounts can be opened remotely

Linked Savings Accounts

Free savings accounts and account transfers

Mobile Deposits

Available, free

Funds Availability

Immediate availability for known customers cashing government, payroll, or checks from that financial institution

Money Orders

$1.65 or less (based on U.S. Postal Service rate)

Remittances (International Wire)

Competitively priced ($5.00 – $20.00, depending on country)

Credit-Building Product Offerings

Secured credit card or secured personal loan, e.g.

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Chapter 3:

Bank On Coalition Financial Institution Partnerships: Statement of Principles

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This Statement of Principles is a template for semi-formally articulating partnership expectations between local Bank On coalitions and financial institutions. It outlines shared goals as well as guidelines for product offerings and visibility, metrics and data reporting, and coalition support. Click here to download a customizable Word version.

Shared Goals • (Bank On coalition name) is dedicated to helping improve the financial stability of the unbanked and underbanked residents of our community by connecting them to safe and affordable mainstream accounts in banks and credit unions, raising public awareness of these efforts and opportunities, and otherwise expanding access to financial education and other financial empowerment opportunities. • Partnerships are key to Bank On success, and we welcome financial institutions serving the consumer marketplace in our community who share these goals, support our coalition efforts, and adhere to this Statement of Principles. Product Offering and Availability • Either currently or in the near future, partnering financial institutions should offer the public, in all of its community branch locations and online, access to a transactional account that meets Bank On National Account Standards. These Standards, produced and disseminated by the Cities for Financial Empowerment Fund, highlight core and recommended features, functionalities, and protections. • Accounts meeting Bank On Standards should be able to be opened and accessed by consumers in the same manner as other product offerings of the financial institution, both in branch locations and online. • Sales incentives shall not discourage or otherwise prejudice the opening of accounts that meet Bank On Standards, nor should they specifically target customers opening accounts meeting Bank On Standards for other product upselling. Account Awareness and Visibility • Accounts meeting Bank On Standards should be positioned and available side by side with other product offerings of the financial institution, both in branch locations and online, so as not to discourage their visibility and to allow for product comparison. • Financial institutions, on their own and/or with the assistance of coalition support, will make reasonable affirmative efforts to train branch and other customer support staff regarding the existence and features of accounts that meet Bank On Standards. Metrics and Data Reporting • Financial institution partners should track and report relevant account data including through the CFE Fund’s national data portal operated in partnership with the Federal Reserve Bank of St. Louis. Coalition Support • Financial institution partners should support coalition efforts, ideally designating an empowered individual as a primary point of contact. • As reasonably feasible, this support includes facilitating branch connections, supporting marketing and communications efforts, and underwriting coalition efforts and convenings.

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Chapter 4:

Bank On National Account Standards Validation and Certification: Frequently Asked Questions Accounts meeting the National Account Standards are now available at over

22,000 BRANCHES

www.cfefund.org/bankon

All

ACROSS

50 states + Washington, DC

1. FAQs: National Account Standard Certification What are the Bank On National Account Standards? The Cities for Financial Empowerment Fund (CFE Fund) first issued Bank On National Account Standards in October 2015, and released an updated version of the Standards in 2019. Compiled with input from local coalitions, financial institutions, regulators, advocates, and researchers across the country, they offer specific guidance on consumer transaction accounts appropriate for financial institution partnerships with local Bank On coalitions. The Standards include core and strongly recommended features that address cost, functionality, and consumer safety. They establish an ambitious, but achievable, baseline for safe, affordable, and appropriate accounts that meet the needs of consumers with low incomes, particularly those outside of the financial mainstream. How do I know if a bank or credit union account meets the Standards? In 2017, the CFE Fund announced a national account certification process. Available free online, financial institutions can submit for validation accounts that they believe meet the Standards. Once validated by the CFE Fund’s third party evaluator, the National Consumer Law Center, as meeting Bank On Standards, financial institutions will receive a Bank On seal of approval for marketing and outreach purposes; national recognition highlighting the account’s safety, affordability, and functionality; and opportunities to partner with local Bank On coalitions and other national stakeholders. How can stakeholders use the Bank On National Account Standards certification? • Financial institutions can use the Standards and certification to highlight their commitment to safe and affordable accounts across all branches and local partnerships, as well as in product development planning. National certification also relieves financial institutions from pressure to modify products locally. • Local coalitions can use national certification to identify appropriate products to which to connect their residents struggling outside of the mainstream banking system. Certification of nationally recognized standards also offers a clear basis for conversations with financial institutions that do not yet offer a certified product. What are reporting requirements for Bank On certified accounts? In partnership with the Federal Reserve Bank of St. Louis, the CFE Fund works with financial institution partners to track and report aggregate data on accounts meeting the Bank On National Account Standards through a central, national Bank On data portal newly available to all financial institutions with certified accounts. Such data, such as number of certified accounts opened in a given reporting period, is also relevant to Community Reinvestment Act regulatory examinations. Additional financial institutions with certified Bank On accounts will be invited to participate in future reports. To learn more, visit www.joinbankon.org/research.

(FAQs continued on page 6)

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Chapter 4: Bank On National Account Standards Validation and Certification: Frequently Asked Questions (Continued from previous page)

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2. FAQs: The Validation Process How does the account validation process work? Using the free CFE Fund web portal, financial institutions submit their account terms and contact information, as well as any additional information that demonstrates that the account meets Bank On National Account Standards core features. The CFE Fund’s independent evaluator, the National Consumer Law Center (NCLC), compares account features to the “core features” outlined in the Standards. “Strongly recommended” features are intended to provide additional guidance for Bank On programs when partnering with financial institutions, but are not required for certification. The validation process is “up or down”– accounts either meet all core Standards features or they do not. Who can submit a financial product for certification review? Banks and credit unions are eligible to submit one or more of their products for validation as meeting Bank On National Account Standards. Local Bank On programs and partners can work with and encourage financial institutions to apply for validation, but the application itself may only be submitted by the financial institution. The CFE Fund welcomes the opportunity to meet with financial institutions to discuss their product and the Standards and answer any questions. Please contact David Rothstein, Principal, for more information. Who conducts the validation? The CFE Fund has partnered with a third-party nonprofit evaluator, the National Consumer Law Center, to evaluate Bank On accounts. Upon application, financial institutions may receive questions from NCLC and/or the CFE Fund to clarify product details. How will I learn the result of the validation process? Are results made public? The CFE Fund will contact applicant financial institutions promptly with the results of the validation process. Accounts that are not certified are not announced publicly – the CFE Fund will only notify the financial institution applicant. The CFE Fund’s goal is to certify as many products as possible, and will work with financial institutions to provide guidance for meeting the core features of the Standards. What are the benefits of getting a product validated and certified? In addition to providing appropriate and safe accounts to millions of customers in need, financial institutions whose accounts are validated as meeting Bank On National Account Standards are officially and publicly certified as a Bank On Approved Account. Such certification will provide a basis for robust local coalition affiliations and programming opportunities. Additionally, financial institutions can use their product-specific national certification seal provided by the CFE Fund in online marketing, branch signage, and other collateral materials to communicate and highlight that their account meets these widely-accepted Standards. The CFE Fund will promote Bank On certified accounts through inclusion in Bank On materials and in communications with local Bank On coalitions, as well as through assets like CFE Fund websites and social media outlets. The CFE Fund will also connect financial institutions to opportunities to partner with local Bank On coalitions and national Bank On stakeholders, where appropriate. Additionally, financial institutions with certified Bank On accounts are eligible to participate voluntarily in a streamlined, national data collection effort with the CFE Fund and Federal Reserve Bank of St. Louis, described above. My financial institution is located in multiple cities or states. Does the product need to be validated for each market? No, this is a national certification, applying to products available across a financial institution’s entire branch network. Note that the certification applies only to the product submitted and not to the entire suite of a financial institution’s offerings or to the financial institution as a whole.

(FAQs continued on page 7)

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Chapter 4: Bank On National Account Standards Validation and Certification: Frequently Asked Questions www.cfefund.org/bankon

(Continued from previous page)

3. FAQs: The Standards Themselves Does an account need to be free? No. The Standards’ core requirements ask only that monthly maintenance fees not exceed $5 if there is no waivable fee option. If there is a waivable fee option through direct deposit, online bill pay or debit card purchase, the Standards accept monthly maintenance fees as high as $10. Are prepaid debit cards eligible for Bank On National Account Standards validation? Yes. The Standards do not distinguish products based upon whether they are structured as a prepaid card or other type of account. Instead, financial products are evaluated against the articulated Standards. Note that the Standards do require that the product be offered by a banking institution with branches. What do the Standards require of financial institutions regarding monthly statements? The Standards require that any electronic monthly statements available by the financial institution be offered for free, and that charges for paper monthly statements, if any, do not exceed $2 per month for one mailed statement. How can financial institutions address dormant accounts while remaining compliant with the Standards? The Standards require that there are no charges for dormancy or non-usage. However, a financial institution can establish a time period after which it may refund dormant account funds, for free, to the consumer. What are the bill pay options under the Bank On National Account Standards? Transactional accounts must meet consumers’ needs, which include paying bills and vendors of different types. The Standards require two free bill pay features. First, the product must allow bill pay by the customer, to a vendor, using their 16-digit debit card account number. Second, the financial institution must have a free institutional or subcontracted bill pay system that allows customers to send payments to any person or business (e.g. by electronically generating a paper check) OR, at minimum, allow customers four free money orders or cashier’s checks per month. Can the account have overdraft or nonsufficient funds fees? No, the Standards do not allow for overdraft or nonsufficient funds fees, period. The Standards do not allow for grace period, warning, or fee reversal exceptions to this requirement. Of course, transactions may be denied when an account balance is insufficient, and a financial institution retains the right to cancel a customer’s account after repeated, purposeful overdraw attempts. What does “free and unrestricted” mean when it comes to the Telephone Banking core feature? This standard is designed to ensure that these account holders are not penalized with additional fees or more limited access for existing telephone banking services, or that they are not charged a fee to do something on the phone that is free at a branch. Thus, if the bank provides free balance inquiries or other customer service representative services to holders of other institutional accounts, as almost all do, they cannot add a charge or restrict such calls for these account holders. Can an account be certified if it is only offered in some, but not all, of a financial institution’s branches? No. An account that is not available for customers to open at any of a financial institution’s branches is not eligible for Bank On certification. May a financial institution charge a supplemental fee for accounts that go below an articulated minimum balance? The National Account Standards set maximum monthly fees that may be charged for certified accounts (generally $5); any additional monthly fees remain subject to those limits.  

More Questions?

Please contact us … we’ll be happy to answer your questions quickly, and will also continue to update these FAQ’s to help your colleagues!

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Chapter 5:

Talking Among Ourselves: The Bank On Listserv

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One of our greatest resources in the Bank On community is each other. By sharing our experiences, questions, frustrations, and best practices, we each advance our own coalition efforts, as well as our larger community. The CFE Fund’s Bank On Listserv is designed to do just that. Join now to continue the conversation!

Who can join? Bank On coalition members, including government, nonprofit, and financial institution partners, can all participate in the Listserv, which will be moderated by the CFE Fund. Financial institutions, academics, and other stakeholders interested in banking access efforts who are not currently part of Bank On coalitions are also welcome to join the community.

How do I sign up? The CFE Fund’s Bank On Listserv is managed through Google Groups. Just use this link to join: https://groups.google.com/d/forum/bankon. Note: Google Groups requires users to have Google accounts. If you do not have a Google account, you can create one with your non-Gmail address. This will allow you to receive listserv emails at your primary work email address, even if it is not Gmail. 1. Once you are logged in with a Google account, you will be prompted to “apply for membership.” You will be asked to share your local Bank On coalition affiliation(s) and role, and select how often you want to receive listserv emails (i.e. abridged, digest, individual emails). 2. Upon signing up for the listserv, you should be approved within a few days and will be able to send and receive listserv emails from bankon@googlegroups.com. 3. Note: For government email addresses, some content may be delayed and/or attachments may not come through. These are settings that are not in our control and you may want to use a Google account address if this is an issue.

How should I use the Listserv? The Listserv is dedicated to technical assistance. It’s a place to ask questions and share resources with the community. For example, conversation topics might include: • Does anyone have a flier for a Bank On event that they felt was particularly effective? • Has anyone held a press event for a Bank On launch? • Who serves on your advisory committee and how often do you meet? The CFE Fund will also initiate conversations on a range of topics to solicit and share best practices from the field, which will inform the content for future Bank On Playbook resources. This Listserv is a technical assistance resource, not a forum for direct fundraising appeals, news stories, or advocacy. To view and search for archived email threads, including attached files, you can visit the group webpage: https://groups.google.com/d/forum/bankon.

JOIN NOW!

https://groups.google.com/d/forum/bankon 10


Chapter 6:

Local Coalition Strategies for Navigating Financial Institution Partnerships and Account Certification

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Designed in consultation with Bank On leaders, financial institutions, consumer advocates, and federal regulators, the Bank On National Account Standards set an ambitious yet achievable benchmark for safe, affordable consumer transaction accounts. Already, dozens of banks and credit unions (ranging from the country’s 5 largest to one with just 4 branches) successfully have had accounts certified and become available in tens of thousands of branches across every state in the country. Every month, other financial institutions reach out to work with the CFE Fund in active transition toward their own product certification success. Local Bank On coalitions play a crucial role in celebrating the availability of such certified accounts to their local populations – and they also play a crucial role in encouraging other financial institutions in their communities to identify or create their own Bank On certified account. What are successful coalition strategies for helping more bank and credit union partners in their community get there? And how are coalitions working in the meantime with financial institutions who do not yet have certified Bank On accounts? Most coalition leaders are actively, privately encouraging their financial institution partners to work with the CFE Fund to get a certified account. They have brought the CFE Fund team directly into these conversations through phone calls and roundtable events, or made referral connections through email. Many coalition leaders are also using public communications as a successful encouragement strategy. Generally speaking, Bank On coalitions have employed a range of these more public approaches, including:

A Continuum of Coalition Approaches

Partner only with financial institutions with certified accounts.

Partner with all financial institutions, but distinguish between those certified and those not yet certified.

Partner fully with all financial institutions, those with certified accounts and those without.

Coalitions that only partner with financial institutions with certified accounts. This approach can be quite uncomfortable for existing Bank On coalitions, most of whom have long and warm partnerships (programmatically, philanthropically, and personally) with financial institutions that don’t yet have certified accounts. Transitioning from several years of no or only a loose account standard to an “in or out” approach to specific national standards, even with plenty of notice, can be both unrealistic and self-defeating. That having been said, this approach can work well for coalitions that are newly starting; they can set clear expectations from the beginning to ensure that confidence in account recommendations and provides the most direct incentive for local and regional financial institution partners to offer a certified account locally. In addition, some existing coalitions have found that the National Account Standards and certification process can offer them an opportune moment to take a stand on the types of accounts they will promote, and can use the national consensus reflected in the CFE Fund certification process to underscore the momentum around these accounts and shift the decision point to the CFE Fund. Even then, this approach is not without difficulty—it can take some time for a financial institution without a compliant account to tweak or create one capable of certification, and some financial institution representatives are unable or unwilling to consider account terms in relation to community partnerships. Also of note, some financial institutions believe that an account “that comes close” is good enough, and can become alienated by failing to gain national certification they thought they nonetheless merited. (Continued on next page)

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Chapter 6: Local Coalition Strategies for Navigating Financial Institution Partnerships and Account Certification (Continued from previous page)

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Coalitions that allow all financial institutions with or without certified accounts to partner equally. In this model of participation, financial institutions often meet other coalition participation requirements, but do not all offer accounts that meet Bank On Standards. Some noncertified accounts are closer than others, perhaps meeting all but one or two core features of the National Standards. While this approach is most inclusive, local coalitions often report several key challenges. First and foremost, these coalitions can generate confusion for local residents about which accounts are recommended and appropriate. Second, the process of creating product comparison charts — including gathering complete and accurate information, and keeping such information up to date — has proven challenging and burdensome even to the most intrepid of those attempting this approach. Third, financial institutions that do have accounts certified as meeting the National Standards become frustrated by the lack of recognition for their effort and accomplishment. And, finally, this approach largely removes critical local incentives for institutions without an approved account to make changes to meet the Standards’ benchmarks for safe, affordable, and functional products generally recognized as best for those outside the mainstream banking system.

Coalitions that allow all financial institutions with or without certified accounts to partner, but make key public distinctions between the two. Increasingly, Bank On coalition leaders are employing versions of this middle approach, mindful of the challenges of the two more extreme approaches discussed above. This approach encourages participation, emphasizes the importance of certified accounts, and provides a strong and public incentive to financial institution partners to bring a certified product on board for local residents. This approach has taken several forms: • Some coalitions graphically highlight and distinguish between certified and non-certified accounts in their communications and marketing materials, such as through separate financial institution or account lists, “preferred as nationally certified” denotations (including by using the national certification logo image), or through product feature grids that highlight key missing/noncompliant items for noncertified accounts; • Some coalitions distinguish in their communications and marketing materials between “account partners” and “other coalition partners,” with only financial institutions with nationally certified accounts recognized in the former category; • Some coalitions host financial institution roundtables or similar public events to discuss the importance of the Standards and how to meet them, only inviting those financial institutions with certified accounts to speak publicly about their account; and • Some coalitions highlight roles for financial institution partners without certified accounts that do not involve promoting these accounts, including financial education, event sponsorship, and volunteering. Local coalitions, as well as their financial institution partners, can look to our chapter on Frequently Asked Questions about the validation and certification process for more detail on what it takes to meet the National Account Standards. The CFE Fund also encourages partners to reach out with other ideas and experiences, and for other ideas and assistance in working towards designing and offering accounts that meet Bank On National Account Standards.

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Chapter 7:

Bank On Coalition Logic Model

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Organizing Bank On Coalition Leadership for Success: A Logic Model As Bank On coalition leaders organize their efforts for local success, they encounter multiple threads of opportunity. The logic model in this chapter offers a framework for defining logical relationships among resources, activities, outputs, and outcomes. As such, it is as much a tool for planning and implementation as it is for fundraising and evaluation. The coalition logic model is organized in four primary streams: improving the financial service marketplace through basic transaction accounts, connecting people to those accounts, creating and maintaining vibrant coalitions, and advocating for banking access and financial empowerment issues. This logic model was designed based upon the experiences of, and in consultation with, Bank On coalition leaders across the country. It was further refined by the CFE Fund as part of its Bank On Fellows initiative. It is a living document, intended as a guide for local application and users’ own experiences. Please share your own logic model thoughts by contacting Paige Diner on the CFE Fund’s Bank On team and join our Bank On Listserv to discuss with peers.

(Logic Model continued on next page)

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Chapter 7: Bank On Coalition Logic Model (Continued from previous page)

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Inputs • Coalition members who represent each key banking access sector • Local government leadership or committed connectivity; key administrative agency partnerships • Meaningful financial institution partnerships • Strong community organization partnerships • Funding

Activities

PRODUCTS

Survey relevant account offerings at key financial institution partners Establish financial institution partnerships, including with statement of principles and partnership agreements

Improve the Financial Services Marketplace for Basic Transaction Accounts

Share information with financial institutions about the Bank On National Account Standards and CFE Fund certification process Encourage local financial institutions to offer and promote certified accounts in local branches Build and maintain feedback loops between financial institutions and other coalition partners to ensure ongoing access to certified accounts Reinforce existing partnerships with financial institutions

PEOPLE

Promote banking access and certified accounts by developing and executing a communications and marketing plan

Connect Un- and Underbanked People to Certified Accounts

Conduct outreach to the community through events, local press, and other marketing activities Facilitate collaborations among financial institutions and programs (especially local government) to integrate account opening strategy into program operation Support banking access integrations by training program staff to provide financial education Reinforce coalition success by collecting and reporting banking access effort outcomes

Secure key coalition infrastructure including leadership, funding and budgeting, and staff/volunteers

PARTNERS

Establish clear coalition mission and principles

Invest in and Nurture Vibrant Banking Access Coalitions

Recruit and engage active and empowered members from all key banking access sectors Build group norms, positive dynamics, and culture of accountability Ensure active participation through delegation and empowerment of members Reinforce accountability by establishing, tracking, and communicating output metrics Seek multiple funding sources to support coalition efforts Motivate for continued engagement and vitality

PROGRESS

Absorb and distribute relevant and accurate research, program findings, and other information on mainstream banking access, including: its significance, the marketplace and availability of certified accounts, and barriers and threats

Promote Banking Access Issues

Cultivate the gravitas to serve as an expert local spokesperson on these issues for stakeholders and media Connect to local partners to educate and activate all levels of local and state government on relevant legislative and policy issues Communicate with relevant stakeholders about banking access issues and coalition activities Contribute to local research Coordinate with advocates for other topics pertaining to the financial stability of low-income people to build momentum for systemic improvement

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Chapter 7: Bank On Coalition Logic Model (Continued from previous page)

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• Staff capacity for daily operations • Close connection to national Bank On movement’s colleagues and resources: research, National Account Standard certification, national data collection portal, coalition toolkit, capacity and innovation grant opportunities, learning network events, community listserv, technical assistance, etc.

Outputs • # of financial institutions in coalition • # of financial institutions in coalition that offer certified accounts • Agreement on Statement of Principles • Partnership agreements with all financial institution partners • # of financial institutions working toward account certification

• # of Bank On promotional events • # of people served at these promotional events • # of local Bank On media impressions • # of new programmatic banking access integrations • # of active programmatic banking access integrations

Outcomes Certified accounts are available at multiple financial institutions in the community Account availability is supported by coalition relationships that promote information and feedback between financial institutions and community partners

People in the community are widely aware of certified accounts and how to use them People have access to enrolling in certified accounts through integrated programmatic access points

• # of account products (and certified account products) used for program integrations • # accounts (and certified accounts) opened as a result of the coalition (e.g. through program integrations) # certified accounts opened in community, as measured by national Bank On data reporting

• # of local coalition partner organizations • # of local coalition partner organizations that are active • Average # of attendees at coalition meetings • # of coalition staff members (including interns) and regular non-coalition member volunteers • Amount of public money allocated for coalition work • Amount of philanthropic money raised for coalition work • # of funding sources

• # of relevant interviews by Bank On leadership with media outlets • # of local Bank On coalition references in media or research • # of relevant testimonies presented in relevant legislative or administrative contexts • # of relevant speaking events by Bank On coalition leadership • # of other public communications

A strong Bank On coalition sustains Bank On outcomes Features of a strong coalition include: members from each key banking access sector, accountability among members for contributing to coalition success, adequate infrastructure and staffing, adequate and sustained financial support

Community influencers understand and communicate about key banking access issues Key banking access issues include: why banking matters, barriers to banking, appropriate accounts, predatory products and practices, and regulatory landscapes

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Chapter 8:

Launching or Relaunching a Coalition

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This chapter provides guidance for new or reinvigorated coalitions as they look to launch or relaunch their Bank On efforts. Introduction to Bank On – What It Means to be a Bank On Coalition The Bank On movement is a national effort to ensure everyone has access to a safe and affordable account, leveraging national, regional, and local collaborations to encourage the widespread availability of safe, low-cost transactional products. To ensure that residents access and use these accounts, Bank On emphasizes program integration with municipal and social services where payments, reimbursements, and subsidies are provided to individuals and families. The goal of a launch or relaunch is to gain public recognition and support for these goals. Bank On coalition members generally come from five primary sectors: financial institutions serving that community; municipal leaders and public agencies; community and social service groups; federal and state banking regulators; and other philanthropic partners, academics, and advocates. These groups work together to promote access to safe, transparent, and low-cost transactional accounts. Each stakeholder has a role to play, including assistance in marketing the program and accounts, identifying programmatic connections and referral pipelines for Bank On integrations, and identifying additional account partners for Bank On certification. Bank On coalitions work to promote the creation of, and residents’ enrollment into, of safe and affordable transactional accounts that meet the Bank On National Account Standards. Developed in consultation with a National Advisory Board, the Standards provide an ambitious yet achievable set of core features that are required for Bank On certification. An embrace of the Standards is often a focal point of a Bank On launch or relaunch, using the launch to highlight accounts that meet the Standards and the coalition’s commitment to partnering to connect residents to such accounts.

Outlined on the next few pages are critical components for launching, or relaunching, a Bank On coalition.

1

Laying the Groundwork

3 Identify Local Need •C  ompile relevant research and data on your region. The FDIC provides rich data on un- and underbanked households. The data can be broken down by state and sometimes by major metropolitan areas. Additional data resources include the Federal Reserve Bank of New York’s Community Credit Profiles; New America’s Mapping Financial Opportunity Project; and Prosperity Now, which provides additional poverty, income, and banking data. Relevant community profile data can be used as talking points, for marketing materials, and in fundraising proposals to make the case for the urgency of the Bank On initiative locally.



• Connect to Local Stakeholders. Gather feedback from social service providers on banking access needs, proliferation of predatory financial services providers in the area, banking “deserts,” and any local priorities and programs to which Bank On could connect. It’s also important to work with financial institutions and funders to understand local needs from their perspectives and address questions about Bank On and where it uniquely adds to other local financial empowerment efforts.

3 Identify Potential Partners Partners can play a number of helpful roles in advancing Bank On efforts. Coalitions can use the Bank On logic model to help identify these roles, which include offering certified Bank On accounts, serving on Advisory Committees, making programmatic connections to integrate banking access, fundraising, and assisting marketing and communications efforts. Potential groups include banks and credit unions, municipal governments, community organizations, and federal and state banking agencies including the Federal Deposit Insurance Corporation (FDIC), Federal Reserve Bank branches, the Office of the Comptroller of the Currency (OCC), and state banking associations.

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Chapter 8: Launching or Relaunching a Coalition (Continued from previous page)

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Laying the Groundwork (continued)

3 Align With Local Government Nearly half of Bank On coalitions are housed within, or closely aligned with, a city or county government. This provides stability and longevity for the coalition, along with the ability to connect banking accounts to public program payment moments (benefits disbursements, reimbursements, subsidies, etc.). In addition, city and county government officials and program leads can be strong partners, particularly if they can provide potential banking access touchpoint opportunities For more on municipal partnerships, see New America Foundation’s “Building Better Bank Ons”, as well as work by the National League of Cities. • Elected official support has proven critical to launching a successful Bank On program. Their ability to combine political momentum with programming access is unparalleled in the Bank On equation. Public officials are also particularly able to leverage public communication opportunities. • C  ounty and city agencies can play a unique, essential role in connecting un- and under-banked families receiving payments to Bank On certified accounts. Many coalitions launch Bank On around a specific program where this type of connection exists. Some examples include free tax preparation (VITA), utility reimbursements, workforce development training and assistance, and youth/summer employment programs. • Federal regulators can also be helpful in convening partners and clarifying Community Reinvestment Act (CRA) implications for Bank On. The FDIC, OCC, and branches of the Federal Reserve Bank provide these links to coalitions around the country and provide insight to financial institutions on questions of account design and participation.

2

Planning Your Coalition

3 Bank On Logic Model The CFE Fund used partner experiences to distill a logic model to identify the goals, objectives, outcomes, and outputs that a Bank On coalition should anticipate and measure. Coalitions can use the logic model to start the planning process.

3 Building Your Coalition Successful Bank On coalitions are made of a diverse range of partners, who can bring access to clients, financial counseling and coaching services, funding streams, marketing capacity, program evaluation assistance, or social service integrations to the Bank On effort. Coalition members should know what is expected from them and how Bank On is related to their own goals. Read more in Building Better Bank Ons. • Confirm financial institution partners. First, coalitions should identify financial institutions that already meet the National Account Standards, or have products that are close to meeting the core features. Additionally, financial institutions that are currently engaged in asset-building programs and financial education efforts are often good partners. Finally, other financial institutions that serve the local market but that are not yet connected may find a launch moment the right opportunity to engage. (See section 4) • Confirm non-financial institution partners. These partners are key to helping with account promotion and enrollment in local communities. Partners may include local government, nonprofit social service providers, advocates, or philanthropic partners, as just some examples. • Plan for coalition kick-off. Some coalitions use a partner meeting to launch their Bank On with the goal of getting partners to commit action toward the Bank On Guiding Principles. Partners may bring resources or social capital to the coalition to support: fundraising, event planning (including space), website design/support, or marketing. (Launching or Relaunching a Coalition Chapter continued on page 16)

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Chapter 8: Launching or Relaunching a Coalition (Continued from previous page)

3

www.cfefund.org/bankon

Communications and Marketing Coalitions should think about communications and marketing channels they can leverage from the beginning.

3 Communications and Marketing Support Coalitions should look to develop the following to support their communications and marketing efforts: • Bank On coalition name and logo - the CFE Fund can provide coalitions with a customized Bank On logo •C  oalition one-pager to share with potential partners, that describes what the coalition does and how partners can get involved – the CFE Fund can provide guidance and templates • Social media platforms such as Twitter and Facebook, to share information and publicize your coalition’s efforts • Website to share information and publicize efforts.

3 Engagement Coalitions should engage the following partners in their communications and outreach efforts: • Mayor’s Office communications contacts •L  ocal 311 or 211 information hotlines • Community organizations that can make referrals to Bank On services

3 Events •P  ress Conferences. Usually led by a municipal leader, ideally with a focus on a Bank On program integration, press conferences can highlight a kick-off or new commitment by a city or county to Bank On. The most fruitful press conferences often launch a new program initiative that will help residents connect to certified Bank On accounts. •F  inancial Institution or Asset-Building Fairs. Some coalitions launch their Bank On by featuring accounts that meet the Standards at events targeting un- and underbanked households, such as employee fairs, public benefit sign-up efforts, free tax events, and other asset-building initiatives.

4

Financial Institution Relationships

3 Hosting a Roundtable Many coalitions partner with a regulatory agency, United Way, and/or municipalities to host a financial institution roundtable. The roundtable can make the case for the importance of helping the unbanked, explain the Bank On National Account Standards and its core features, and discuss how the Standards relate to financial institutions’ community development goals. The roundtable may include a panel discussion, in which financial institution partners with Bank On certified accounts can reflect on why their institution offers the account.

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Chapter 8: Launching or Relaunching a Coalition (Continued from previous page)

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Financial Institution Relationships (continued)

3 Preparing Financial Institutions Before a launch, it is important to ensure that financial institutions understand the National Account Standards. Financial institution representatives play a critical role in the creation of Bank On certified accounts; ideally, they should be committed to Bank On before the launch and sign on to the Bank On coalition’s Financial Institution Partnerships Statement of Principles. Bank On coalitions may consider hosting a webinar for financial institutions in the process of developing certified accounts, connecting them with financial institutions partners with certified accounts to answer specific questions about the account negotiation process and account success.

3 Program Integrations Roundtables are a good venue to discuss potential or existing municipal or social service program integrations, so that financial institutions can see how Bank On can serve as a pipeline for successful new account opening opportunities.

5

After the Launch – Momentum for Your Bank On Coalition

3 Refining Coalition Structure Following a launch, coalitions often begin or continue to refine the structure of their coalition. This includes developing committees who are tasked with marketing, product development, fundraising, and program integration. Some coalitions also create a smaller group, such as an advisory committee, that meets more frequently to help set the agenda for coalition meetings, identify challenges, and manage partnerships.

3 Strengthening and Expanding Financial Institution Partnerships At launch, not all financial institution partners will offer accounts that meet Bank On Standards. Following the launch, coalitions can continue to work with new financial institutions on creating accounts that meet the Standards. It can also support those with existing certified accounts to develop ways to provide flexible account opening procedures that better integrate with programmatic account opening opportunities. Additionally, coalitions can expand the number of local institutions they are working with and establish other ways for financial institutions to support the program through funding, participation on the Advisory Committee, event sponsorship, and other local needs.

3 Convening Your Bank On Coalition By regularly convening the Bank On coalition, partners can build off the kick off momentum and ensure stakeholder buy-in. Some coalitions have used regular meetings to highlight programmatic partnerships.

The CFE Fund is here to help.

Get in touch with us as you plan your launch. 19


Chapter 9:

Handout: Financial Institution Benefits of Bank On National Account Certification

www.cfefund.org/bankon

The below can be shared with financial institution partners to highlight the benefits of Bank On National Account Standards certification. Click here to download a printer-friendly version of this handout. What is Bank On and National Account Standard Certification? The goal of Bank On is to ensure that all residents have access to a safe, affordable bank or credit union account. Bank On partners are committed to helping consumers identify and enroll in safe, low-cost transactional products that meet Bank On National Account Standards. These Standards, put out every two years by the Cities for Financial Empowerment Fund, serve as the basis for free and independent certification evaluation. They address basic account costs, functionality, and consumer protection. Transaction accounts certified as meeting the Bank On National Account Standards are already available in tens of thousands of branches across the country, connecting thousands of consumers to safe financial products that meet their needs.

Top Three Benefits for Financial Institutions of Offering a Certified Bank On Account

1

2

3

Community Opportunities • Public recognition both locally and nationally highlighting your product • Eligibility for local programs to rely upon certification to connect your account to consumers • National Bank On certification seal of approval for marketing outlets

Sustainable Consumer Base • Reach new customers in your community who are un- and underbanked and bring them into the financial mainstream • Deliver a product with features that are in demand • Sell your product through public and community banking access programming Community Reinvestment Act (CRA) Credit Products certified as meeting Bank On National Account Standards support Community Reinvestment Act “service test” examinations.1 The most recent CRA Q&A highlights the following activities as supportive of the various regulatory evaluations by examiners: • The availability of low-cost deposit accounts, including checking accounts tailored to meet the needs of low- and middle- income (LMI) geographies • The extent to which a low-cost checking account increases access by, or reduces costs for, LMI individuals • The degree to which services are tailored to meet the needs of geographies of different income levels, particularly LMI geographies “CRA guidance specifically lists financial services that may benefit low- and moderate-income individuals, including low-cost bank accounts; ....Expanding financial access for low- and moderate-income people through fintech innovation, creative new products, or partnerships with community initiatives, such as Bank On, are all ways that banks can promote financial access and live up to CRA’s spirit and purpose.” – Grovetta Gardineer, Senior Deputy Comptroller for Compliance and Community Affairs, Office of the Comptroller of the Currency (OCC) in remarks at the 2017 Bank On National Conference. 1. Institutions regulated by the OCC may want to check with their regulator regarding recent changes to their examination and review process.

For more information and to apply for Bank On National Account Standards certification, visit www.cfefund.org/bankon. 20


Chapter 10:

Programmatic Banking Access Integration Best Practices

www.cfefund.org/bankon

Often, inserting banking access opportunity and functionality into a host social service program is the best approach to large-scale banking success. Bank On coalitions can establish such programmatic integrations to connect people to safe, affordable bank accounts, and help them use those accounts, while strengthening the host program service.

Bank On Coalitions Can Play Three Critical Roles in Helping to Develop Banking Access Integrations

Identify good potential integration opportunities, characterized by: • A host program that involves payment streams. The motivation and opportunity to become banked, and the efficacy of accompanying financial education, is greatly enhanced by leveraging existing streams of recurring payments such as payroll, public benefits, or reimbursements. This is particularly true if there are multiple opportunities to enroll people in accounts, due to programmatic re-certification/re-application or a continuous flow of new participants. Direct deposit should be strongly encouraged, if not mandated, where possible. • Multiple opportunities to promote banking access. Consistent with behavioral economics theories, strong integrations repeatedly reinforce the benefits of banking and provide multiple opportunities for participants to open a banking account. • Programmatic alignment around financial stability. Host programs that have a vested interest in the financial stability of their clients are generally more motivated to make necessary programmatic adjustments to incorporate banking, as well as to encourage and educate clients accordingly.

Engage program directors to value banking integration, including: • Effect on host program’s outcomes. By understanding the host program’s ultimate outcome goals, coalitions can demonstrate how banking access will benefit the host program. For instance, a program serving youth aging out of the foster system may focus on helping clients to achieve stability, inclusive of financial stability, so emphasizing how accounts help youth save money and provide an initial relationship into the mainstream financial system may resonate with program directors. For a program serving domestic violence survivors, discussing how opening a new, separate account – and addressing any identify theft issues – can assist the survivor in becoming independent thus demonstrating the importance of banking access integrations. • Operational efficiencies: For host programs that make payments to participants via paper check, coalitions can highlight the cost savings of direct deposit, which include time and labor efficiencies when programs no long need to distribute paper checks. • Financial benefits to clients: Research shows that people with mainstream bank accounts keep more of their earnings, fare better against financial shocks, and save more compared to those without. Conversely, those who do not have an account can spend over $40,000 over the course of their lifetime on check cashing fees, or pay high fees to access and use their money through paycards.

(Progammatic Banking Access continued on next page)

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Chapter 10: Programmatic Banking Access Integration Best Practices (Continued from previous page)

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Help facilitate success by leveraging: • Certified accounts. Government and program leaders can rely upon the appropriateness of accounts offered in an integration opportunity by limiting available accounts to those that are certified to meet the Bank On National Account Standards. Depending upon the local availability of certified accounts and other programmatic needs, programs may either make all certified accounts available or procure a more limited number of financial institution partners. • Remote account opening. For maximum uptake, behavioral economic principles dictate the decision to become banked, or to open a new and more appropriate Bank On certified account, should be met with an instantaneous opportunity to do so. Technological advances combined with regulatory support are increasingly allowing financial institution partners to facilitate on-site account opening, rather than directing clients to a nearby physical branch location. • Banking integration program design. Program partners should analyze the “touchpoints,” or opportunities that the program engages with clients, to determine where and when it makes the most sense to incorporate banking access. As an example, in the Summer Jobs Connect program, which adds banking access and financial education to Summer Youth Employment Programs, outreach and application, enrollment, orientation, payroll, and ongoing training are all programmatic touchpoints where banking access can be incorporated. • Financial education focused on account usage. Opening a new bank or credit union account is a “just in time” opportunity to meaningfully educate people about how to choose and use an appropriate account. Beyond account opening and direct deposit, such lessons can also incorporate budgeting, bill payments, and savings. • Engaged funders. Coalitions that champion banking integration work, and can make the case for the importance of embedding banking access into other social service programs, can seek funding opportunities to support these efforts, including the CFE Fund’s Bank On Innovation Fund grant.

Banking Access Integrations Banking access integrations not only offer key opportunities for large-scale account opening success, but they also offer critical “win-win” opportunities to enhance host programming and build meaningful community partnerships. Although a banking access integration may require a fair amount of planning, including identifying financial institution account partners that fit into the program, training social service partners, and perhaps modifying program processes, true success is when the banking access component becomes “baked in” as a regular part of the program eventually not relying upon the Bank On coalition to maintain the integration.

Banking Access Integrations in Action Outlined below are examples that highlight the interaction of these core elements:

Summer Youth Employment Programs

Some of the strongest and most complete integrations exist in Summer Youth Employment Programs (SYEPs), in which local governments help place teens and young adults in a variety of jobs and subsidizes or even manages their payroll. For example, the City of Baltimore’s YouthWorks program has built an opportunity into the program enrollment fairs to not only teach participants the benefits of opening a bank account and receiving funds by direct deposit, but also to encourage participants to

(Progammatic Banking Access continued on next page)

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Chapter 10: Programmatic Banking Access Integration Best Practices (Continued from previous page)

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open credit union accounts on site. The credit union helps youth open an account as they are waiting to enroll in the SYEP, so their first summer paycheck can be directly deposited into the young person’s new account. This pending paycheck is considered the initial deposit, and the student leaves the enrollment session knowing how to access her pay in a safe and affordable account. Similarly, the City of St. Louis partners with a local credit union to begin the account opening process during financial education trainings, which take place before the start of SYEP jobs. Job coaches help SYEP participants complete the necessary paperwork to open a youth account. Participants pick up their debit card at a credit union branch, which encourages the formation of a customer relationship. This partnership benefits not only the youth participants but also the credit union, which saw its average customer profile get 3.5 years younger overall, and more than 10 years younger at the branch where most accounts were opened. Customer age is a key indicator of credit unions’ long-term sustainability. Credit union staff also provide comprehensive financial education opportunities that start at enrollment and continue during the summer. Read more about SYEP integrations and the CFE Fund’s national Summer Jobs Connect program here.

Workforce Development

Job training or workforce development programs vary widely, but may include opportunities to provide training on the benefits of banking and bring financial institutions on site to encourage account opening and direct deposit. In New York City, the Parks Opportunity Program (POP) provides its workers orientation, on-the-job training, career coaching, and specialized training opportunities during their six months of employment with the NYC Parks Department. As part of one banking integration pilot, during the initial orientation, former POP workers led sessions about the benefits of banking, sharing their personal experiences of the cost savings of banking versus check cashers and the efficiency of receiving paychecks by direct deposit. The sessions also included a discussion on using bank accounts efficiently and effectively. Following those sessions, bankers from a local financial institution with a pre-negotiated safe account set up a table outside of the room, so that those who wanted to could open an account immediately. The workforce training staff then followed up with the POP workers over the next few weeks, assisting them to sign up for direct deposit of their wages into their newly opened, safe accounts.

Workforce Integrations: Talking Points for Moving to Banking Access Many productive banking access integrations take place in a workforce context. Below are talking points for employers who currently paying employees through paper check or payroll cards about the benefits of banking. Switching from paper checks to banking accounts

Switching from paycards to banking accounts

• Reduced staffing costs: Fewer employee hours are needed to handle the physical aspects of payroll, including check distribution and stopping/reissuing lost/stolen checks.

• Avoiding costly fees for employees: Some payroll cards charge outof-network ATM withdrawal fees, ATM balance inquiry fees, decline fees, point of sale decline fees, card-to-card transfer fees, inactivity fees, and replacement card fees.

• Reduced expenses: Paper checks can cost as much as $20, based on the cost of preparing and mailing.

• More flexible usage: Most payroll card programs only allow one employer to fund the card, while bank accounts can accept direct deposit from multiple employers.

• Reduced fraud: Employers and employees can reduce risks of check fraud and prevent checks from being forged. Lost checks are also common issues during payment process.

• Facilitating savings and budgeting: Often, payroll cards are considered spending cards with little saving incentives, whereas banking accounts are more likely to have a saving account/platform. In addition, few payroll cards allow employees to link to a separate budgeting platform.

To learn more about Bank On’s programmatic integration work, contact I-Hsing Sun.

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Chapter 11:

Bank On National Data Hub: Accessing Local Data

www.cfefund.org/bankon

As Bank On coalitions continue to launch and thrive across the country, and as the growth of accounts that meet Bank On National Account Standards demonstrate the movement of the consumer financial product market, data that show the impact and reach of these products is critical. Consistent, national metrics, quantifying the success of the Bank On movement and the vibrancy of the Bank On certified accounts market, are critical in continuing the momentum and availability of safe and affordable banking products. The CFE Fund partnered with the Federal Reserve Bank of St. Louis (FRBSTL) to collect centralized metrics through a national reporting platform for financial institution partners with a Bank On certified account. “After a successful pilot year, 10 financial institutions reported on the below metrics for their Bank On certified accounts, demonstrating the continued demand for safe, affordable, and functional banking products. 2018 reporting financial institutions are Bank of America, Carrollton Bank, First Commonwealth Bank, IBERIABANK, JPMorgan Chase, Old National Bank, Southern Bancorp, The First” – A National Banking Association, U.S. Bank, and Wells Fargo.

BANK ON DATA PILOT METRICS Account Opening

Total number of certified accounts opened Number of accounts currently open (2018) Number of accounts newly opened (2018) Number of account-opening customers new to institution (2018) Number of accounts newly closed (2018)

Account Usage and Consistency

Number of account holders utilizing direct deposit Number of accounts holders making debit transactions Frequency of debit transactions per month Total value of debit transactions per month Number of account holders making withdrawals Frequency of withdrawals Total value of withdrawals per month Number of account holders making deposits Frequency of deposits per month Total value of deposits per month Average monthly balance

Online Access

Total number of account holders using bill pay Frequency of online bill pay per month Total value of online bill pay per month Number of accounts using peer-to-peer (P2P) transactions Number of P2P transactions per month Value of P2P transactions per month Number of accounts that are digitally active

Bank On National Data Hub: Accessing Local Data continued on next page

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Chapter 11: Bank On National Data Hub: Accessing Local Data (Continued from previous page)

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The aggregate collected data is publicly available at the national level and, where possible, by ZIP code. Note: to ensure financial institution anonymity, the aggregate data collected is only made public by ZIP code if three or more of the participating financial institutions have reported data within that ZIP code.

Want to see the data for your community? Visit www.joinbankon.org/research and follow these steps: 1. Access the Local BankOn Data Tool a. The City Search tab (sheet 1) allows you to select a city from the dropdown menu and view aggregate data for all collected data points. b.

The Zip Code Search tab (sheet 2) allows you to input a list of zip codes (up to 130) and view aggregate data for all collected data points. This may be helpful for understanding account usage and activity in just one zip code of interest, or in multiple zip codes covered by a regional Bank On coalition, for example.

c. Additional notes on this data set can be found on sheet 3. You can also download the entire aggregate data file from the Federal Reserve Bank of St. Louis - visit joinbankon.org/research to access the file. Note: Each row of data reflects a specific ZIP code. Please note that because ZIP codes in Connecticut, Massachusetts, Maine, New Hampshire, New Jersey, Puerto Rico and Rhode Island begin with “0” or “00,” only the trailing 3 or 4 numbers will appear in the zip code field in the data file. See the data dictionary for detailed descriptions of each data field.

What can I learn from this data set? You can use this data to create a picture of Bank On account activity in your city or zip codes of interest. For each, you might examine how individual account usage characteristics vary across zip codes or cities; for example, you might look at the percent of accounts utilizing direct deposit by dividing the total number accounts using direct deposit by the total number of active accounts. You can analyze the value and frequency of ATM and branch withdrawals to understand the withdrawal behavior of account holders; account holders making smaller, more regular cash withdrawals may be less vulnerable to crime. You might look at the number of accounts conducting noncash (e.g. debit, P2P) transactions, to understand how consumers are interacting with the mainstream noncash economy. For the aggregate data set, you might demonstrate local successes by filtering for all of the zip codes in your city, and look across rows to compare the number of accounts newly opened and the value of deposits across zip codes. You might also sort the aggregate data by number of accounts utilizing direct deposit to see where across the country direct deposit enrollment is most successful. Bank On coalitions can use this data - demonstrating the vibrancy and robustness of the market and demand for these accounts - for funder proposals, talking points, and engaging potential financial institution partners to offer accounts meeting Bank On Standards. This aggregated data represents a major step forward in understanding Bank On account usage through quantitative national data from partner financial institutions. The importance of trusted, consistent, and comparable data to highlight the vibrancy and impact of Bank On certified accounts is clear. This data is critical to demonstrate, and encourage, the momentum of the Bank On movement and the importance of safe and affordable banking products. Future reports with additional financial institution partners will continue to highlight the growth of the Bank On market and support local banking access efforts. Bank On National Data Hub: Accessing Local Data continued on next page

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Chapter 11: Bank On National Data Hub: Accessing Local Data (Continued from previous page)

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How can I use this data to tell a story about local Bank On successes? Once you’ve used the data tool to understand your local findings, share your success! For example, illustrated below is how the City of Houston might use the tool to share the impact of their Bank On efforts.

Bank On Houston – Bank On National Data Hub Data

32.6%

of Houston households are un/underbanked, relying on costly alternative financial services like check cashers, payday lenders, and pawn shops for routine financial transactions. They are less than half as likely to be able to save for emergencies or their futures. The St. Louis Fed and the CFE Fund released 2018 results from the Bank On National Data Hub to show how many people opened Bank On certified accounts, which: • Don’t allow overdraft or other surprise fees • Meet consumers’ everyday needs, like paying bills and directly depositing funds • Help consumers save and pay down debt

Bank On in Houston Results from accounts at ten reporting financial institutions showed:

78% of accounts were opened by new customers in Houston (75% new customers nationally)

Customers new to the banks

ACCOUNT OPENING

Existing customers

ACCOUNT USAGE

In 2018, the majority of new accounts were opened by customers new to the banks – these accounts are attracting new customers and bringing them back into the financial mainstream

Almost 100,000 certified accounts have been opened in Houston, with over 21,000 opened in 2018 alone

Consumers are safely accessing their money and avoiding fees

Online access highlights the appeal and importance of online banking capabilities

• # of deposits per month: 21,565 • Value of deposits: $165,018,093 • # of debit transactions per month: 646,352 • Value of debit transactions per month: $22,491,342

• Percent of digitally active accounts: • Value of online bill pay per month: • Value of peer (P2P) transactions:

This shows the size of the Bank On movement and the appeal of certified Bank On products

22% 78%

70% $196,113 $5,334,470

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Chapter 12:

Bank On National Account Standards: Annotated Standards

www.cfefund.org/bankon

This chapter addresses frequent discussion points regarding individual features of the CFE Fund’s Bank On National Account Standards. For additional questions, or to discuss, please contact David Rothstein.

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Chapter 12: Bank On National Account Standards: Annotated Standards (Continued from previous page)

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TERMS

STANDARDS

Core Features Transaction Account at Banking Institution Point of Sale (POS) Capability

1

Checking account (including checkless checking); bank- or credit union-offered prepaid

2

Debit card/prepaid card

Minimum Opening Deposit and/or Account Balance

$25 or less If not waivable: $5 or less

Monthly Maintenance Fee

If waivable: $10 or less; offer at least two options to waive fee to free with a single transaction (e.g. direct deposit with no minimum deposit, online bill pay, or debit card purchase)

3

Overdraft or Non-Sufficient Funds (NSF) Fees Dormancy or Inactivity Fees

4

None, structurally not possible (e.g. via checkless checking)

5

None

Customer Service Branch Access 6

Free and unrestricted

Telephone Banking

Free and unrestricted (including live customer support)

Use of In-Network ATM Use of Out-of-Network ATM

Free and unrestricted

7

$2.50 or less (not including local ATM fee)

Functionality Deposit Capability Bill Pay by Customer

Free in branch, at ATM, and direct deposit

8

Bill Pay by Financial Institution

Free

9

Check Cashing for Checks Issued by that Institution

Free if available, otherwise at least four free money orders and/or cashier checks per month

10

Free

Online and Mobile Banking

Free

Banking Alerts

Free

Monthly Statements

11

Insured Deposits

Free paper (or electronic with consumer consent) Insured by FDIC or NCUSIF

Strongly Recommended Features New Account Screening (e.g. ChexSystems, Early Warning Services)

Only deny new customers for past incidences of actual fraud

Alternative IDs (Municipal, Consular, etc.)

Accept alternative IDs

Remote Account Opening

Accounts can be opened remotely

Linked Savings Accounts

Free savings accounts and account transfers

Mobile Deposits

Available, free

Funds Availability

Immediate availability for known customers cashing government, payroll, or checks from that financial institution

Money Orders

$1.60 or less (based on U.S. Postal Service rate)

Remittances (International Wire)

Competitively priced ($5.00 – $20.00, depending on country)

Credit-Building Product Offerings

Secured credit card or secured personal loan, e.g.

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Chapter 12: Bank On National Account Standards: Annotated Standards (Continued from previous page)

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1 Transaction Account: To be certified, accounts must offer full traditional transactional functionality. They must be

able to receive deposits and allow withdrawals, without the limits of a savings account. Accounts may be “checkless”; general reloadable prepaid debit cards are also allowable under this Standard.

2 Point-of-Sale Capability: Beyond ATM functionality, certified accounts must have the capacity for retail purchases at retail locations (including swipe or chip technology) or online, using the 16-digit account number to facilitate the electronic transaction. Cards must provide access to a national payment network such as Visa or MasterCard.

3 Monthly Maintenance Fee: There are two approaches to acceptable monthly fees for certification. First, the

account’s monthly maintenance fee can be up to $5 and need not be wholly or partially waivable. Or second, an account can be as high as $10 per month if that fee is waivable down to $0 by at least two options that customers can choose, either of which would entirely waive the fee (for example, use of an electronic statement, use of direct deposit, or use of a debit card). The FDIC Survey shows that the costs of maintaining an account, specifically a la carte fee structures, are frequent barriers to keeping accounts open. Having a fixed price, low-cost, and transparent monthly fee facilitates account retention, because consumers can budget for this known expense.

4 Overdraft or NSF Fees: The account must be incapable of incurring both overdraft and Non-Sufficient Fund

(NSF) fees. Certified accounts may not allow for customers to elect overdraft affirmatively. For these accounts, transactions that exceed available balances should be declined, and without fee. Overdraft and NSF fees are often the main reasons that checking account balances dip below $0 and eventually close; one study estimated that 97.5% of account closures are caused by overdrafts, and consumers primarily cite unpredictable fees, and overdraft particularly, as reasons they do not have an account.

5 Dormancy or Inactivity Fees: Certified account may not have monetary penalties for account inaction, although

financial institutions may continue to charge their regular monthly fee during periods of inactivity. As demonstrated by research such as the U.S. Financial Diaries, a lack of dormancy fees assures new consumers that interruptions in income will not put them in danger of new or unexpected fees, or stop them from using the account.

6 Branch Access: The account must allow for free and unrestricted access to, and use of, branch locations. Research

continues to find that branch access is important to customers. Additionally, building trust and interest of customers often occurs at a branch location, starting with opening an account and learning how to safely use it.

7 Use of Out-of-Network ATM: Financial institutions with certified account may not charge more than $2.50 for ATM transactions that are out of network. This limit does not apply to fees levied by out-of-network ATM owners.

8 Bill Pay by Customer: Customers must be able to use their account to pay bills to vendors such as utility companies and retail merchants on the internet or over the telephone using the account’s 16-digit number.

9 Bill Pay by Financial Institution: Certified accounts either must offer free usage of the financial institution’s

internal bill pay system, or provide at least four free money orders per month. The financial institution’s internal bill pay system should allow the customer to designate a payee to be paid on a certain date, with the financial institution then paying the payee either through ACH transfer or by sending a paper check. Paying with electronic bill pay or money order is part of fully transactional banking, particularly for those accounts that are checkless or card-based.

10 Check Cashing for Checks Issued by that Institution: Accountholders of certified accounts must be able to offer

a check for cashing to that financial institution and receive the full value of a check, in cash and without fee, if the check was issued by that same institution.

11 Monthly Statements: Certified accounts must offer customers free monthly electronic statements, if available

at that financial institution, and may not charge more than $2 for a monthly paper statement. This requirement does not address discounts or bonuses for incentivizing electronic statements, though monthly account fees are subject to a cap (see above). This requirement also does not address any fees for nonregular statement requests by customers.

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Chapter 13:

Communicating with the Unbanked: Making the Case for Banking Access

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Engaging Unbanked People Around Bank Accounts The Cities for Financial Empowerment Fund conducted intensive focus groups and thorough quantitative message research in multiple cities to reach new insights on how to more effectively engage unbanked people to opening bank accounts. Which unbanked people are most persuadable to open or reopen an account?

Almost two-thirds of respondents said they were interested in learning more about banks and opening an account after exposure to messaging.

• Across the board, unbanked people are surprisingly persuadable to open or reopen an account; the most persuadable people have had accounts in the past and tend to be female, younger, and Latino, less educated, and unemployed or a homemaker. • Only 15% said they were “not at all” interested in learning more about getting a bank account after seeing the messages.

What do unbanked people think about banking?

• The most common reasons that unbanked people cited for not having a bank account was “not having enough money to keep in an account” (43%), “bank fees are too high” (32%), and “I don’t trust banks” (30%). • Many of those who were previously banked had closed their account within the past five years (49%); they cited overdraft fees (29%), loss of direct deposit (27%), and minimum balance fees (22%) as the main reason for closing the account. • In focus groups, unbanked respondents generally indicated that they felt they were managing their finances effectively without a bank account; some viewed the claim that “having an account is a sign you’re on the right track” to be insulting.

What People Find Most Compelling About Bank Accounts • Protection from losing money was the top-rated benefit. Customers welcome any feature that ensures their cash is secure. - Benefit to highlight: lack of overdraft and minimum balance fees. There are no penalty fees on these accounts, so customers won’t see any money taken out of these accounts unless the customer chooses to spend it.

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“No surprise fees” performed much better than “low cost” – the fear of fees must be addressed directly.

• Unbanked people find the traditional, basic benefits of a bank account to be the most important, such as having a debit card and the ability to direct deposit. Messaging around the fundamental conveniences of a bank account also performed well. - Benefits to highlight: debit card, low balance alerts, smartphone apps, direct deposit. - Spanish speakers and 18-29 year olds were especially drawn to benefits and messaging that highlighted how banks provide tools to manage money and track spending. • Security of personal information and safety of money (including not losing money to fees) continue to be of high importance to unbanked people. The ability to lock a stolen debit card was a top-ranking benefit among the persuadable unbanked. - Benefits to highlight: fraud protection, debit cards that lock if they are lost. - Spanish speakers show a higher concern for security of their personal information, ranking a security-oriented message that emphasized the availability of fraud protection the highest. - English speakers were more drawn to messaging and benefits that addressed their concern over overdraft and “surprise” fees.

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Chapter 13: Communicating with the Unbanked: Making the Case for Banking Access (Continued from previous page)

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Most Compelling Financial Goals for Those Considering Becoming Banked •

Building savings and building an emergency fund are the most important financial goals in the near-term for both Spanish and English-speaking unbanked people.

English and Spanish speakers view improving credit as an important goal, but less important than building savings.

Overall, respondents indicated that it was important to establish solid financial footholds and take care of basic financial needs first, before thinking about longer-term aspirations.

Fully, 60% of Spanish speakers and 40% of English speakers rated building savings as a very important financial goal.

Messaging Framework for Engaging Unbanked People Survey respondents rated these message frames as both credible and motivating to open an account. We recommend using the following messaging themes as a starting point for engaging unbanked people to learn more about the benefits of opening a bank account.

“Banks Provide Tools for Easy Banking”: Reinforce how direct deposit and the ability to deposit cash, branch access, low balance alerts, and new tools to manage and track money, make banking an easier, less stressful experience. Emphasize no-hassle banking with improved conveniences and new tools. “Bank On Accounts Allow You to Maintain Control Over Your Balance”: Have peace of mind knowing that your bank balance stays put and your money and information is safe. Emphasize that you can now avoid overdraft fees while maintaining fraud protection to help keep more of your own money. “Bank Accounts Help You Achieve Your Financial Goals”: Make it clear that banking is a critical first step now on the path toward long-term goals, helping you where you are now to save and build strong credit so you can reach your financial goals down the road. “Banks Can Benefit Everyone”: Let people know that banks cater to all types of customers, no matter how much money they make or who they are – and support that message by emphasizing banks’ most compelling benefits: convenient money tracking tools, saving with low or no fees, and building credit.

(Talking Points for Engaging Unbanked People continued on next page)

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Chapter 13: Communicating with the Unbanked: Making the Case for Banking Access (Continued from previous page)

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Talking Points for Engaging Unbanked People The most effective messages address key attitudes about banking, the benefits that unbanked people highlighted as important, and how Bank On certified accounts offer the right solution: “Banks now offer new services that minimize the cost, the hassle, and the uncertainty of banking … and are the right first step to meet your financial goals. Certified Bank On bank accounts cost a flat fee of $5 or less per month, never have overdraft or minimum balance fees, and they protect your money with fraud protection, debit cards in your control that you can lock if they are lost, and even low balance alerts.” Note: for some consumers, especially those who are especially cost-sensitive, our research found that first highlighting the benefits of certified accounts, demonstrating their value, and then talking about cost, was most effective. “These bank accounts are user-friendly: Direct deposit, low balance alerts, branch access, smartphone apps and other tools to help you manage and track money, make banking an easier, less stressful experience.” “You’re in the driver’s seat: you won’t have to worry about overdraft fees and you also get fraud protection to help you stay in control of your own money.” “Bank accounts help you achieve your financial goals: Banking is the right first step on the path toward your financial goals [like building an emergency fund or saving].” “These bank accounts are for everyone. Banks who offer certified accounts want your business, and want you to have an account that’s designed for you to succeed with features like convenient money tracking tools, no overdraft, and fraud protection.” Note: The “banks are for everyone” message, itself, was motivating but not believable – unbanked respondents said that if true, it would motivate them to open an account, but needed more proof points. Coupling this message with examples of how banks have designed accounts to work for people like them makes the message more compelling and believable.

Ineffective Messaging When Engaging Those Considering Banking The least compelling messages tested were: • Banks need customers to succeed and provide better service than they used to. This message didn’t seem credible, and it didn’t motivate people to consider opening an account. • Starting a new phase of your life – like getting a new job or getting married – is a good opportunity to open a bank account. This message emphasizes long-term goals; these goals felt too far away for respondents, and they didn’t necessarily connect them with opening an account. • Many bank accounts cost $5 or less/month and have no additional or hidden fees. Respondents first need to be convinced of the value of an account before they are ready to think about price. • Credit unions that emphasize customer service are a great alternative to traditional banks. People generally appear not to know enough about credit unions to respond positively to this message.

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Chapter 13: Communicating with the Unbanked: Making the Case for Banking Access (Continued from previous page)

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Effectively Answering Questions to Engage Clients Toward Banking Why should I get a bank account since I’m happy using cash? Certified Bank On bank accounts provide convenient tools for managing and tracking your money, while making sure your money is safe and secure. These accounts never have overdraft or minimum balance penalties, and banks can alert you when your balance is low. If you lose your debit card, you can lock the card remotely to make sure no one uses it without your permission.

What if I don’t have enough money to get a bank account? Certified Bank On accounts are designed to work well for customers like you. They require no more than $25 to open, have no minimum balances penalties, and they never allow or charge for overdraft. Bank accounts also give you convenient tools for managing and tracking your money. Getting a bank account is a positive step on the path toward getting out of debt and building your savings.

Why should I get a bank account when I don’t I trust banks? Trust matters … which is another reason why certified Bank On bank accounts help you conveniently manage and track your money, but also protect your cash in many ways. You will never get hit with an overdraft or low minimum penalty, and you can freeze your debit card if it gets lost or stolen.

Why should I get a bank account, since fees make bank accounts a burden? Certified Bank On bank accounts never have overdraft or minimum balance penalties, and can send you an alert when your account balance is low. They also provide easy and free ways of spending, managing, and protecting your money, all for a total of $5 a month or less. Getting a bank account is the right first step on the path toward the important financial goals that matter most to you – like getting out of debt and building your savings.

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Notes

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Stay tuned for the next Chapter!

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Profile for Cities for Financial Empowerment Fund

CFE Fund Bank On Coalition Playbook  

Tools and resources to equip Bank On coalitions for local banking access success.

CFE Fund Bank On Coalition Playbook  

Tools and resources to equip Bank On coalitions for local banking access success.

Profile for cfefund