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.
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