Dastardly Plan To Make Poor Put Money Into Banks Apparently Working
People putting their money in banks these days? Pretty radical.
Parker attributes the instant success to the efforts put forth by program partners and the English-Spanish marketing campaign, which included inserts in water bills, billboards, television ads and a Web site.
She told Hair Balls, "The message resonated, but there was also a need for the services."
Houston Neighborhood Market Drill Down found that people living in minority neighborhoods underutilize mainstream financial institutions and that more than half the people they studied did not have "a relationship" with a bank.
"If you want to get away from living paycheck to paycheck, you really have to have an account," Parker said. "It takes temptation out of (your) pocket."
Since the program started earlier this year, financial literacy classes offered by its partners the United Way, the Fifth Ward Community Redevelopment Corporation, Money Management International and others have been well-attended.
(We took note of one oddity involved in the program here -- see the third item.)
Parker said, "We really want people to think about their finances, budgeting and being conscientious of the fees they pay."
According to data collected by the Brooking Institute in 2006, fees on checks cashed by nonbanks were $11,241,785 and fees on payday loans were $67,288,372. Parker said the group is trying to spread the word about the various resources available, so people don't feel compelled to go to payday lenders.
Parker also addressed issues surrounding Hurricane Katrina evacuees and immigrants. To her knowledge, 70 percent of the evacuees did not have bank accounts, and immigrants may be under the impression that they are not eligible for an account.
"You gotta get past those barriers to get people to set up first time bank account," she said. "Our message to folks is to protect your money and keep (your) money safe."
Aside from the obvious benefits, check cashing businesses charge hefty fees for remittances and other services compared to the rates offered by banks and credit unions. Parker said with an account you're careful and you learn how to manage your money.
"The economic downturn caused people to think about their finances," she said. "They're money is safer, they invest in themselves...and they invest in the community."