Paul Bass Photo
Michelle Perez, JUNTA’s economic development director, with Treasurer Nappier at the press conference.
Some 73,000 Connecticut households — a majority of them black or Latino — don’t have bank accounts. The state wants to change that.
It has launched an experiment in five cities — New Haven, Derby, Bridgeport, Norwalk, and Stamford — to work with local not-for-profits and banks to try to reach more of those people.
Call them the “unbanked.”
Officials called them that on Thursday when they held a press conference at New Haven City Hall to announce the experiment, called “Bank on Connecticut.”
Nappier & Mayor John DeStefano.
State Treasurer Denise Nappier was there. So was Liz Dupont-Diehl, the director of Connecticut Association for Human Services, which put the program together with her office.
They chose a not-for-profit agency and a bank in each city to make that happen. The not-for-profit will recruit people without accounts, instruct them on the advantages of opening them (as opposed to, say, getting gouged by payday lenders or check-cashing outlets). The people will then be brought to the bank to open accounts, in some cases at dramatic discounts.
Thursday’s New Haven event featured the New Haven and Derby duos. In Derby, TEAM Inc. will bring customers to Webster Bank, which will allow them to open free-checking accounts with just $50; people usually need at least $1,000. In New Haven, Junta for Progressive Action will recruit and educate customers to bring to START Bank, the community lender launched in 2010.
START already has active programs aimed at the “unbanked.” (Read about its latest program here.) It already offers free accounts to people with low incomes and low savings. It opens accounts for teens working summer jobs through a city program and encourages them to save money, for instance. It has converted 30 percent of the 284 customers who cash payroll checks there into account holders, helping them avoid large cashing fees; it will also hold smaller fees in escrow, and let them keep the money if they maintain a balance. It graduated 2,364 students from a financial-literacy “Loot Camp.” (Read about that here.)
Still, START will definitely benefit from “Bank on Connecticut” because of the new effort to recruit people through JUNTA and teach them about smart financial management, said bank Vice-President Lynn Smith.