Lauderhill considers banking program
Lauderhill, which has a sizable number of unbanked and underbanked households, is currently working on a program that will encourage people to depend on mainstream financial institutions, such as banks and credit unions.
About 50 percent of the city's residents either do not have a bank account or have one but continue to depend on costly alternative financial services, such as check-cashing stores, payday loan providers and pawn shops. Mayor Richard Kaplan, who is the driving force behind "Bank on Lauderhill," wants people to stop spending a sizable amount of their net income on unnecessary fees.
"Many people do not know how to bank, how to open an account," said Kaplan. "They do not have the financial knowledge. We need to do something to help them break the chain of paying fees, sometimes outrageous fees. Some banks and credit unions have unique programs that are designed to help such people; all they need to do is take advantage of them."
Among those who attended a recent meeting organized by the city were representatives from Bank of America, We Florida Financial, PNC Bank, TD Bank, Wells Fargo, Citibank, Florida Prosperity Partnership, 2-1-1 Broward, Lauderhill Chamber of Commerce, Federal Deposit Insurance Corporation, Broward County Housing Authority, United Way ofBroward County, Urban League, Mount Olive Development Corporation, Broward County Family Success Center, and Catalyst Miami. Another meeting is scheduled for March 19.
The success of the "Bank on San Francisco" program has spurred similar initiatives in other parts of the country, including Florida. With the support of "Bank on Florida," an initiative of the Florida Prosperity Partnership, local "bank on" chapters have opened in such places as Orlando, Tampa Bay, Lee County and Jacksonville.
"What we are trying to do is not brand new for the banks or the nonprofits," said Elijah Wooten, the city economic development manager. "All those who attended the meeting were familiar with the 'bank on' programs in other parts of the state and country. They all are very supportive. At the next meeting, we will come up with concrete ideas on how to implement the program in our community.
"About 30 percent of the people in the city are unbanked," Wooten said. "The underbanked [population] is close to 15 percent. We want the unbanked to open bank accounts and the underbanked to stop depending on alternative financial services, such as check-cashing stores. We want them to start saving money."
Kaplan is expected to talk about the program at the meeting of the Northwest Council of Elected Officials in Lauderhill next month. He intends to present the program at the Broward League of Cities meeting, as well.
"The United Way of Broward County tried to set up 'Bank on South Florida' a couple of years ago, but it never quite took off," said Kaplan. "I am trying to bring it back from the ashes. After introducing this program in Lauderhill, I will try to get other cities to adopt it, as well. The percentage of unbanked and underbanked people in Broward County is way greater than the state and national averages."
The city intends to launch a publicity campaign once the program is launched. "The banks and social agencies that are a part of the program will also spread the word," he said. "My goal is to roll it out by May or June."
Twenty percent of people in the country are underbanked, while 7.7 percent are unbanked, said Bill Mills, vice president of Florida Prosperity Partnership. He expects the proposed program to have a substantial effect on people in Lauderhill.
"In Florida, 6.2 percent of people do not have a bank account, while 19.9 percent have a bank account but still depend on alternative financial services that are costly," Mills said. "According to a study, an unbanked household will spend over $40,000 over a working lifetime on alternative services; that is a lot of money that can be saved. We are in over 60 counties, trying to bring together local financial institutions and community partners to help unbanked and underbanked households."