Financial Literacy Coalition Reports Initial Success, Announces New Plans

St. Louis American, February 28, 2014

“When we educate and empower people to make better financial choices, we also strengthen our community,” St. Louis Treasurer Tishaura O. Jones said Friday morning at an event her office hosted for the St. Louis Regional Unbanked Task Force at the William J. Harrison Education Center, 3140 Cass Ave.

The task force reported initial progress forged by its coalition of 20 banks with the treasurer’s office and a host of community-based institutions and agencies, which was formed in the wake of the FDIC’s 2011 Unbanked Household Survey. She said the task force has documented 1,600 newly banked people in St. Louis, with a 96 percent retention rate.  The FDIC’s 2011 survey reported that 111,000 households (9.7 percent) in the St. Louis metropolitan area were unbanked, an increase of 2.1 percent from 2009; and 222,000 households (20.1 percent) were under-banked, an increase of 2.7 percent from 2009.

Taskforce Steering Committee member Galen Gondolfi of Justine Peterson, a community-based lender, said the net family savings from these new accounts totals approximately $1.9 million annually, based on average of $1,200 savings for each family.  Gondolfi also said the 96 percent retention rate of new banking customers was more encouraging than the modest raw numbers. Several members of the task force said the reported total was also lower than the actual number of newly banked individuals, because not all participating lenders have reported fully. The Federal Reserve Bank of St. Louis has stepped in to facilitate with ongoing data collection and tabulation.

The treasurer’s office is responsible for fully half of the reported number of newly banked citizens. When Jones moved her staff payroll to mandatory direct deposit, 800 unbanked employees started new accounts to accept payroll deposits, she said.

Active engagement in the task force by participating banks was evident in attendance at the event, when 27 people identified themselves as members of one of the 20 sponsor banks.
Representatives from two of the seven Platinum Sponsor banks, Montgomery Bank and Pulaski Bank, addressed the task force.

Ted Rice of Montgomery Bank said the task force was addressing the concern that “people are spending millions of dollars on fringe financial services and getting no return on their money.”

Thelma Moorehead of Pulaski Bank said that enrolling people who are new to the banking system is a matter of face-to-face interaction and “overcoming objections.” Once enrolled, she said, a community banker needs to offer additional “financial literacy” so that new customers understand the benefits in continuing to use the bank, rather than a payday lender or check-cashing franchise.

Task force co-chair Jacqueline (Jackie) Hutchinson, of People’s Community Action Corporation, described many public forums and events where task force banks interacted with the public, in partnership with her agency, the United Way, Beyond Housing, Grace Hill, the Gateway Classic and People’s Health Centers.  Hutchinson said the task force would be doing more community events with churches and also more outreach via social media. The United Way also will facilitate “train a trainer” sessions in financial literacy with the FDIC.

This year, the task force intends to reach unbanked people before they are old enough to bank. Money Smart Week in St. Louis, April 5-12, will open at the Saint Louis Zoo with activities to teach children the basics of financial literacy.

Jones said she campaigned for treasurer with a message of financial literacy, despite the fact that the office is known to the public almost solely as the agency that controls parking (and issues parking tickets) in the city. But she meant the message.

“Financial literacy means people need to be able to understand how money works,” Jones said, “and use that understanding to plan for the future.”

For more information about the St. Louis Regional Unbanked Task Force atGetBankedNow.org or follow on Twitter @stlunbanked.