We’ve been hearing a lot lately about the national economic crisis, but many Houstonians are surprised when they hear that, right here in Houston, the predatory lending and check-cashing industry is draining more than $70 million dollars a year out of local neighborhood economies and family budgets.
It’s time to plug the leak. That’s why, yesterday, we launched Bank on Houston – the first step in helping struggling families save hundreds of dollars a year, improving their quality of life and supporting local businesses that keep our economy strong.
Bank On Houston will target low-income Houstonians and help them open no- or low-cost starter bank accounts. The Brookings Institution reports that a family with an annual income of $20,000 can spend an average $800 dollars annually in check-cashing fees – money that is better spent on items like groceries, health care, educational supplies, and home repairs that improve our quality of life and support local businesses.
This is not an isolated problem. A study by the Houston Planning Department found that about 51 percent of households in Houston’s low-income African-American and Latino-dominated neighborhoods do not have bank accounts. Another study found that seven of 10 Hurricane Katrina evacuees who came to Houston did not have bank accounts. Their money washed away when the levies broke and their Social Security, disability and child support checks piled up at New Orleans post offices.
During yesterday’s community launch, Mayor Pro Tem Sue Lovell said, “Bank On Houston comes at the perfect time. The City has kicked-off the Section 8 voucher program allowing nearly 8,000 qualified renters with subsidies and incentives to buy homes. The challenge is many qualified applicants do not have an established banking relationship, making them ineligible. Bank On Houston is part of the solution.”
And because this is a collaborative effort, we can begin to restore millions to Houston families and neighborhood businesses at virtually no cost to the city. While my office took the lead in organizing this effort, it is a partnership with Mayor White’s office, 20 local banks and credit unions, numerous community organizations, the FDIC, the Federal Reserve Bank of Dallas – Houston Branch and the National League of Cities.
This is Houston at its best: working together, we can solve the toughest problems and keep Houston the best place in America to live and raise a family.
To learn more about Bank On Houston visit: http://www.houstontx.gov/