CCCS Offers Help for the Checking Account Challenged
August 20, 2002 – How would you conduct your financial affairs if you couldn't have a checking account? That is a question thousands of Americans must ask themselves each year after losing banking privileges. The dilemma is widespread, with the Office of the Comptroller of the Currency estimating that 13%-22% of the population is "unbanked" – unable to retain a checking or savings account in a major financial institution. To combat the problem and help those affected reenter the banking system, Consumer Credit Counseling Service of San Francisco (CCCS-SF) has partnered with eFunds Corporation to offer the Get Checking program in the Bay Area.
Get Checking is a checking account and money management education program that was originated by a coalition of banks, credit unions, social service agencies, lenders, and utility companies. It provides training and banking opportunities to individuals who have been denied banking privileges, or who just want to improve their financial management skills. Originally coordinated by the University of Wisconsin Extension-Milwaukee County, the program has been successful in helping consumers reenter the mainstream of financial services in the Milwaukee area for nearly three years.
Problems often stem from the consumer failing to reconcile his or her checkbook, then overdrawing on the account. Excessive overdrawing typically results in banking privilege suspension and the activity being reported to an information network such as ChexSystems. ChexSystems provides data to banks so they may identify applicants who have a history of account mishandling. Once on the network, consumers find it difficult to open future accounts.
According to Bankrate.com, eighty percent of U.S. banks and credit unions belong to the system. Information may remain on file for five years, even if the amount owed has been paid. The decision to delete a report is up to each bank or credit union and its individual policies.
Kim Fisher, CCCS-SF Program Director for Get Checking, says the program is vital to the community because "When people lose their privileges for banking services, they tend to rely on check-cashing institutions, which is a very expensive way to conduct their personal affairs. Education is key to making people more financially prepared and savvy consumers." The success rate for participants is impressive: only two percent of the people who have completed the class have had accounts subsequently closed due to mismanagement.
Banking problems are surprisingly universal. The perception that those who have lost account privileges are only from the lower end of the income brackets is simply untrue says Fisher "The entire financial spectrum is represented in the classes – not just low to moderate income earners."
With Get Checking, individuals without a primary banking relationship receive six hours of instruction and skill development training specific to checking and savings accounts. Participants learn basic banking skills and financial principles while identifying major financial goals such as purchasing a home, saving for a child's education or starting a small business. The class costs $50 and is taught by trained educators. Upon completion, and provided all outstanding debts reflected on the ChexSystems report are paid, a certificate is awarded allowing the individual to open a qualifying checking or savings account at a participating financial institution.
For more information about the Get Checking program, contact Consumer Credit Counseling Service of San Francisco's community outreach department at 415-788-0288 ext. 216. CCCS-SF is a nonprofit, community-based organization and a member of the National Foundation for Credit Counseling.
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