Home > Personal Finance > Des Moines Working to Help Underbanked

Comments 0 Comments

Millions of Americans have bank accounts that they rely upon in their everyday lives to complete all sorts of transactions, but a large percentage of people nationwide also go without these traditional banking option when it comes to dealing with their finances. For this reason, Des Moines, Iowa, is now launching a program to help these people better handle themselves fiscally.

In the city of Des Moines alone, nearly 18,000 households — accounting for 8.1 percent of all residents — do not have access to formal banking services, and another nearly 39,000 — or 17.8 percent — use alternative services even though they do have them, according to a report from the Des Moines Register. That compares pretty closely with the roughly one-quarter of Americans who fall into the same boat.

As such, the city is now taking part in the Bank On Central Iowa initiative to help these people get access to more affordable financial services through traditional banks. The Bank On programs have worked successfully in some 70 cities or states nationwide already.

“At first thought, a lot of people might think the reason people are in this situation is because they’re misbehaving,” Deidre DeJear, financial capability network manager with United Way of Central Iowa, told the newspaper. “[Usually,] they just don’t have the information to make smart choices.”

The program makes use of a number of professionals in the financial industry to help educate consumers about their options and broaden their access to these services in general, the report said. It’s believed that by doing so, many city residents will be able to reduce their costs for conducting everyday financial transactions and therefore find themselves on more solid footing.

However, the going may not necessarily be easy, as data shows that minorities tend to be less involved in traditional banking platforms overall, the report said. Recent findings from the Federal Deposit Insurance Corp. show that about half of black households and more than two in five Hispanic ones are either under- or unbanked at this time.

Many who avoid traditional banking services may do so because they’re worried about how they will be able to afford the fees associated with doing so, but in some cases, they might pay more for alternative services including prepaid cards and wire transfers that would come with lesser costs if administered by established financial institutions.

Image: Digital Vision

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team