City Controller Annise Parker kicks off “Bank on Houston”
effort to help Houstonians open starter bank accounts

January 12, 2009 -- With today’s formal kick-off of Bank on Houston and its marketing campaign, Houston becomes the first city in Texas to launch a program to help residents open no, or low, cost starter bank accounts. 

“The war on check-cashing and payday loan outlets that are siphoning millions of dollars out of Houston’s poorest neighborhoods begins today,” said Controller Parker.  “We want you to know that the best way to protect your hard-earned money is to open a bank account. You’ll save hundreds of dollars a year in fees, and you’ll have the peace of mind that your money is safe.”

The goals of Bank on Houston are twofold: open a minimum of 10,000 new accounts in 2009 and increase accessibility to quality money management education.  Controller Parker’s partners in this effort are 20 local banks and credit unions; numerous community organizations; the FDIC; the Federal Reserve Bank of Dallas, Houston Branch and the National League of Cities. 

The following key features are being offered by the banks and credit unions participating in Bank on Houston:

• A no, or low, cost checking account
• No minimum balance requirement
• Acceptance of the Mexican Matricula Card as one form of identification
• An ATM or debit card
• At least one additional feature such as second chance checking accounts for people with histories of bounced checks or overdraft fees, remittances, waiver of overdraft fees, free checks or free online banking.

A study by the Houston Planning Department found that about 51 percent of households in Houston’s low income African-American and Latino-dominated neighborhoods do not have bank accounts.   Another study found that seven of 10 Hurricane Katrina evacuees who came to Houston did not have bank accounts.  Their money washed away when the levies broke and their Social Security, disability and child support checks piled up at New Orleans post offices.

The Brookings Institution reports that a family with annual income of $20,000 can average $800 dollars a year in check-cashing fees. The predatory lending and check-cashing industry is stripping approximately $70 million a year from the pockets of Houston families,” said Ms. Parker.  “That money could be better used helping cover household expenses, saving to buy a house or saving for a child’s college education.  Opening a bank account is the first step toward financial independence and asset building.”

Customers opening accounts through Bank on Houston will be urged to complete a free financial education class where they will learn basic money management skills.  Nine non-profit organizations have been selected as the preferred providers of these classes, which will be taught in both English and Spanish. 

Bank on Houston’s fiscal agent is Covenant Community Capital Corporation, a 501 (c) (3) organization.  The program is being funded through donations from the participating banks and credit unions.  Comcast Cable has donated production services and advertising time for public service announcements about Bank on Houston on its cable channels.  Clear Channel Outdoors is donating space on 45 billboards over the next three months to help publicize the program.   The marketing effort will also include printed inserts in 480,000 City of Houston water and sewer bills. Marketing and advertising expertise is being donated by Boone DeLeon Communications of Houston.

Bank on Houston is modeled after Bank on San Francisco, which helped more than 30,000 residents open bank accounts since its inception in 2005.  Seattle and the State of California launched similar programs in late 2008.  Numerous other cities are expected to follow with programs of their own.