A more perfect Union serves the unbanked and underbanked

Getting recognition for its new Access Accounts

Merdies Hayes | 6/13/2013, midnight
Union Bank of California has a successful history of fostering economic sustainability in the regions its serves, particularly providing financial ...
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Union Bank of California has a successful history of fostering economic sustainability in the regions its serves, particularly providing financial services to so-called “underbanked” and even “unbanked” communities, including portions of south and east Los Angeles. The firm was recognized recently by the Greenlining Institute for implementing a new Access Account designed specifically for its low- and moderate-income customers.

The new banking program, or “checkless account,” is designed for low- and moderate-income residents and other consumers who may not qualify for a traditional bank account. Often, these persons must resort to costly check-cashing outlets—which can charge up to 20 percent at face value—or receive their wages in cash. The Access Account is said to minimize the likelihood of fees such as overdraft and nonsufficient funds, along with providing easier access to money via branch offices or through ATMs.

“We’re receiving positive responses to the new Access Account because it provides an opportunity for regular banking for low-income persons without the common high fees,” said Rogger Lacruz, retail product manager with Union Bank.

“The program is designed to meet the needs of persons who often have to resort to check-cashing centers which deduct needed money from persons already struggling to make ends meet. Every Union Bank branch in greater Los Angeles offers this new account and we encourage underbanked communities to take advantage of this opportunity to open an account and thereby help establish a good credit rating for the future.”

The program has caught the eye of advocacy groups who have surveyed banking practices in the inner city and have found various communities lacking in financial services. “We and other community groups have been urging banks to address the needs of these households, who have often found conventional bank accounts to be too expensive or too confusing,” said Sasha Werblin, economic equity director with Greenlining Institute, a policy-research organization based in Washington, D.C. “We’re glad Union Bank has moved closer toward meeting the needs of these families and expect other banks to do the same.”

With the innovative account, Union Bank customers can opt to use an ATM card to do point-of-sale transactions at participating merchants. “We’ve long been concerned about the 34 million U.S. households—disproportionately people of color—who are unbanked or underbanked, and who often end up paying much higher fees at check-cashing stores or other alternative services,” Werblin added.

Customers can open the account with minimum deposit of $25, and must maintain a minimum balance of at least $1. It offers basic banking services such as in-bank deposits/withdrawals, ATM access, online and mobile banking, discount money orders, no overdraft fees and, reportedly, all done at lower fees than a traditional checking account.

“This new account won’t work for everyone,” Werblin explained, “ but we think it will be useful for a meaningful number, including customers who have trouble maintaining a high minimum balance. There is a large market out there of customers who aren’t being served by the options now available, and we urge all banks to develop new and responsible ways to meet their needs.”