Nearly a quarter of African-American households and 19 percent of Hispanic households are unable to write a check to cover the monthly electric bill or to tap a savings account when finances come up short.
The Federal Deposit Insurance Corp., in a survey released in December, found that 8 percent of U.S. households, or 9 million of the total, are "unbanked"- meaning they lack both checking and savings accounts. The situation is most prevalent among minorities and households with incomes under $30,000, the FDIC found.
But some banks have decided that it makes business sense to turn these people into customers.
Fifth Third Bank has introduced money transfers and other services offered through Western Union Financial Services at its branches in the Toledo area and nationwide. Officials, in announcing the product addition last year, acknowledged that it was part of an effort to reach beyond the bank's traditional customer base.
Karen Fraker, spokesman for Fifth Third Bank (Northwestern Ohio), said that Western Union's money-transfer services are popular with workers seeking to send money to family members in foreign countries.
Bank officials aren't certain how the service will be received, but are optimistic.
"It's fairly new in Toledo, but the initial interest is encouraging to us," Ms. Fraker said. The service started locally last month.
Fifth Third is leading efforts to import to Toledo a program developed in San Francisco that seeks to educate low and moderate-income people who don't use traditional banking services about those services.
The program, to be called Bank On Toledo, will encourage credit unions and other banks to offer special programs to help the "unbanked" and "underbanked" - people who use check-cashing services, pawn shops, and other nontraditional financial services - to make use of checking accounts and other more traditional products.
Fifth Third, for example, will promote its Basic 53 checking account, which charges a monthly fee of $7.50 and comes with a card that allows withdrawals of money at ATMs but not traditional debit purchases at retail stores.
High monthly fees can discourage potential customers from opening checking accounts, bank representatives said. That is especially so for people who are unable to carry minimum balances in other accounts.
The Bank On program, which quickly spread beyond San Francisco, will be carried out with the help of the United Way of Greater Toledo and other nonprofit agencies, said Carla Brady, Fifth Third project manager. The program is expected to be introduced this year.
KeyBank, Cleveland, is experimenting with programs aimed at the same sector as Bank On, including a low-cost check-cashing service. But the program has not been introduced in Toledo, spokesman Dan Davis said.
Fewer than 18 percent of banks surveyed by the FDIC, which insures deposits, identified expansion of services to underserved households as a priority.
The organization's survey found that 22 percent of African-American households lacked checking or savings accounts.
Nationwide, among all sectors of the population, 21 million households - 18 percent of the total - said they possess checking or savings accounts but make use of money orders, payday loans, rent-to-own agreements, pawn shops, or nonbank check-cashing services.
In announcing survey results in December, Sheila Bair, FDIC chairman, said: "Access to an account at a federally insured institution provides households with an important first step toward achieving financial security - the opportunity to conduct basic financial transactions, save for emergency and long-term security needs, and access credit cards on affordable terms."
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