Local nonprofit Branches helps lead Bank On Miami to add residents’ access to financial products and services to build their financial futures. The Bank On movement works to expand access to safe and affordable banking products for people who are unbanked or underbanked. Bank On Miami has more tha n 40 partners, including financial institutions Amerant Bank, Banesco USA and Bank of America. The Federal Deposit Insurance Corporation (FDIC) says an unbanked person doesn’t have a checking or savings account at a bank or credit union. A person who is underbanked has a checking or savings account but regularly uses alternative financial services, such as payday lending, check cashing and money transfer services. Brent McLaughlin, the president and CEO of Branches, said that being underbanked “is really the more pressing issue.” “People may … either at some point in the past or even currently have a bank account of some sort or a credit union account, but what tends to happen is they opt into alternative financial products, and sometimes those products – and I want to kind of emphasize the word sometimes – can be predatory in nature, can be actually a path towards a debt cycle that basically harms people and holds them back from financial stability and economic mobility,” he said. A Federal Reserve report showed that 6% of adults were unbanked in 2024. A 2023 FDIC survey found that 4.2% of U.S. households – about 5.6 million – were unbanked in 2023, while 14.2% of households, or about 19 million, were considered underbanked. The most-cited reason people gave for being unbanked was cost, with the data showing that 42.3% of unbanked households reported not having enough money to meet minimum deposit requirements as the primary reason they did not have a bank account. Distrust in banks was the second most-cited reason for not having an account. The report indicated that 95.8% of U.S. households – about 129 million – were banked, meaning at least one household member had a checking or savings account at a bank or credit union. The 4.2% unbanked rate was the lowest recorded since the FDIC survey began in 2009. “I don’t know if I have really geographic specific information for here in South Florida, but nationwide, things are improving, and we’ve been turning a corner, in part because of Bank On and its efforts to serve communities with … safe and affordable banking products, so there’s no hidden fees, for example, so that customers don’t have to worry about, all of a sudden there’s an extra $25 coming out of their account every month and they don’t know why,” Mr. McLaughlin said. “The minimum opening deposits are generally around $25, so it’s easier for people to open that account and then start using it,” he said, “and the Bank On certified accounts are also checklists, basically, so they provide a debit card, they have Zelle, there’s different ways and means to transfer and pay money, but it’s digital, and so people can access it on their phone through an app like it’s been proven now over the last decade to help people have better confidence and use – they opt into it more frequently now that it’s so easy to use. “Rather than going to the check cashing store or whatever for their needs,” he said, “now they can set up direct deposit and then access their money right out of their account.” Bank On was launched in 2006 in San Francisco as a pilot program to help unbanked households access financial services. In 2010, the Obama administration expanded it nationally, announcing the creation of Bank On USA. Later, in 2015, Bank On Miami was formed as part of Miami-Dade County Commission Chairman Jean Monestime’s Council for Prosperity Initiatives to help improve the financial stability of low- to moderate-income families throughout the community. Isabelle Pike, Branches’ senior vice president of development, said Bank On Miami recently received a fellowship grant from the Cities for Financial Empowerment Fund to hire a full-time program manager. “What’s coming,” Mr. McLaughlin said, “is that we’re going to be making more and more connections between community-based organizations and financial institutions, as well as city government, county programs that may be touching large numbers of people and connecting that with financial institutions as well so that information is flowing … financial education opportunities are there and then people will begin to see how banks and credit unions are actually here to serve them, support them on their journeys.” “Together,” he said, “we’ll be making more and more of these connections through Bank On Miami, and it’s going to yield good benefits for the community overall in many different ways as people’s finances, hopefully through these projects, are going to stabilize and we can see more upward mobility in our community.” The post Bank on Miami expands access for the underbanked appeared first on Miami Today. ...read more read less