City expands Bank on Boston program with free checking accounts – The Daily Free Press
The City’s Bank On Boston initiative has partnered with USALLIANCE Financial to provide a basic free checking account to unbanked and under-banked city residents, according to a press release from the Mayor’s Office of Empowerment on Thursday. financial.
USALLIANCE offers a free Dora daily checking account – making it the first regional financial institution to meet “National Bank On account security and accessibility standards,” the statement said. Bank of America and Chase also meet national standards, but they are not local in the Boston area.
Part of OFE, Bank On Boston seeks to connect underbanked residents with safe checking and savings accounts.
“The [Bank On Boston] The coalition is truly 100% for full equity and access to financial inclusion, bridging the racial and economic gap, ”said Michael Andelman, program director for Bank On Boston.
It’s especially useful for residents of the Dorchester, Roxbury and East Boston neighborhoods, Andelman said.
“There aren’t that many financial institutions on every corner or on every block,” he said. “It’s easier to go to a check cashing facility than to go to a physical branch.”
The new Dora Everyday Checking account is fully mobile, Andelman said, so residents can bank online without needing to visit in person.
Having a bank account is especially important as another round of government stimulus and unemployment checks is likely to arrive, Andelman said.
He added that the new account could be useful for recent college graduates entering the workforce or for residents in transitional housing who may not have a permanent address for checks to deposit.
The elimination of overdraft fees in the Bank On Boston initiative and the Dora program is helping those already facing challenges related to the pandemic or unemployment, said Kristi Kenworthy, Managing Director of Bank Dora.
“When you look at low-income households, they’re disproportionately affected by overdrafts and recurring monthly fees,” she said. “Not having to worry about paying fees, I think it will have a huge impact.”
She added that the “entry-level” account can help those who cannot otherwise get a traditional checking account.
“I hope that having access to a product like this will prevent you from using other predatory services like check cashing facilities and payday lenders and things of that nature,” Kenworthy said.
Over time, Dora Everyday Checking account holders may be offered a credit union membership once they have reached a certain number of financial milestones, said Alaina Froton, head of digital marketing at Dora Bank. .
She added that the services are available in English and Spanish.
“We believe that because the app and the whole experience is available bilingual, it can also have a big impact in the Latino community,” said Kenworthy.
Quoting civil rights activist James Baldwin, Abu Jalal, professor of finance at Suffolk University, noted how “it is extremely expensive to be poor” in the United States.
The additional fees mean low-income residents find it difficult to obtain credit, which can be crucial for large purchases such as a car or house, Jalal said. He added that programs like Bank On are designed to help alleviate some of that financial pressure.
“Let’s give them an opportunity at some point, maybe they save a little bit of money, and then they can achieve what’s called the American dream,” Jalal said.
Parker Cohen, director of the Savings and Financial Capability team at Prosperity Now – an organization that aims to help low-income communities achieve economic stability – said the basic checking account is a critical step, but not a solution to fight against banking inequalities.
“Having access to safe and affordable financial products, like free checks, does not lift someone out of poverty or dismantle the barriers many low-income people face to strengthen financial stability and security,” he said. Cohen said.
But it helps cultivate greater confidence in the banking system, he said.
Bank On Boston reports progress in familiarizing people with the banking system and creating credit, Jalal said.
“Providing them with banking services won’t magically make all the income inequalities and everything go away, but it’s a small step,” he said. “This is a substantial step in the sense that it can have a snowball effect.”
The aim of initiatives like Bank On is to encourage people to slowly save money for emergencies, retirement and education, so that they do not need to rely exclusively on emergency funding. .
“A lot of times we don’t realize that money isn’t just about money,” Jalal said. “Often money means freedom.”