Bank on Houston has already exceeded its first year goal of opening 10,000 new checking accounts. According to the tracking reports submitted by the program’s participating banks and credit unions, 10,264 accounts were opened in the first three months of 2009, the first quarter of the program’s operation. “These results are stunning,” said City Controller Annise Parker. “We never expected to meet our goal this fast. Obviously, there is a need for this program.”
There are also clear indications that the program is responsible for increased attendance at local financial literacy classes. People’s Trust Foundation had a record number of adult financial literacy workshops in the first quarter of 2009. Likewise, the Alliance for Multicultural Community Services has seen its classes double in size. Demand for classes is also up at the Fifth Ward Community Redevelopment Corporation, the Credit Coalition, Money Management International and the Houston Area Urban League, all of which are part of Bank on Houston. “Not only are we introducing previously unbanked residents to the financial mainstream, we are helping them learn to manage their money better,” said Parker. “We all benefit when more of our residents become financially independent. This is more important given the ongoing economic downturn.”
Bank on Houston is a collaborative effort to help the unbanked protect their money and take that first step toward wealth and asset building by introducing them to low-cost starter checking accounts. Program participants include Parker’s office; 22 local banks and credit unions; numerous non-profits and community organizations; the FDIC; the Federal Reserve Bank of Dallas, Houston Branch and the National League of Cities.
Parker attributes the early success to the strong commitment of the program’s participating financial institutions and a multi-faceted English and Spanish marketing campaign, which includes inserts in city water bills, billboards, ads on local television channels and a Web site. Funding was provided by the participating financial institutions. In-kind contributions were made by ABC 13, Boone DeLeon Communications, Clear Channel Outdoor, Comcast Cable, KIAH Channel 39, KZJL Channel 61, Univision 45 Houston and TV Informa 43.
Research by the city planning department found 51 percent of households in Houston’s minority-dominated neighborhoods have no banking relationships. In addition, 7 out of 10 Katrina evacuees arriving in Houston did not have bank accounts; their money washed away with the flood waters. According to the Brookings Institute, using check-cashers and payday loans cost unbanked Houston families nearly $70 million in fees annually.