In its first year, Bank On Central Texas (BOCT) opened more than 6,000 bank accounts- saving individuals more than $2.4 million.
Many Central Texans struggle daily with budgeting and meeting daily expenses. Often these individuals are wary of banks and use services provided by check cashers, pawn shops and payday lenders. Forty-seven thousand Central Texans don’t use a bank account for basic financial activities and cash checks valued at more than $160 million at check cashers with more than $4 million in check cashing fees collected. In Austin alone, a typical working, unbanked household pays between $230 and $918 to cash paychecks during the course of one year.
For someone on a fixed income or living paycheck to paycheck, that can really add up. To address this issue, United Way Capital Area (UWCA) launched BOCT is a community initiative to bring together financial institutions, government, private sector and community organizations to provide more people access to better financial products and services.
“Individuals who don’t have bank accounts rely on alternative, high-cost financial services,” said Annie DuPre, Financial Stability VISTA at UWCA. “There’s potential for these individuals to save hundreds of dollars a year by opening a low cost or even free account through the partnerships established by BOCT.”
BOCT, which serves 10 counties, reaches out to both unbanked (those who do not have an account-checking or savings) and under-banked (those who use a combination of mainstream and alternative financial services). The majority of unbanked or under-banked individuals are in low and moderate income groups and 53 percent are minorities. The program has targeted specific zip codes where these individuals live and work and partnered with financial institutions to help all individuals have access to safe financial products and services.
BOCT has had huge success since it launched publicly in June 2010. Beyond opening 6,080 bank accounts and saving Central Texans money, the program successfully partnered with 10 financial institutions: Bank of America, CHASE Bank, Capital One Bank, First Convenience Bank, Greater TEXAS Federal Credit Union, Mango Financial, Velocity Credit Union, Wells Fargo, Regions Bank and Comerica Bank.