A 2019 survey by the Federal Deposit Insurance Corporation found that nearly 6% of people in the Kansas City metro area do not have a bank account, limiting their ability to get loans and save for the future. 

A nationwide effort coming to Kansas City aims to change that.

It’s called Bank On, and its goal is to connect people without bank accounts to a financial institution and help them develop financial stability. To accomplish this, Bank On works with local coalitions of public and private groups. 

One of those coalitions is getting started in the Kansas City metro. The Unified Government of Wyandotte County and Kansas City, Kansas, recently announced a partnership with CHES Inc., a local nonprofit providing housing counseling and financial empowerment, to bring Bank On to the metro area. 

“Particularly with the pandemic, we know that a number of other individuals have fallen out of the banking system,” said Justin Walker, director of business development at CHES Inc. “It’s really an idea whose time has come to the metro, to make sure that Kansas Citians not only have access to safe accounts, but also have the educational component wrapped around that so that they can make good financial decisions and get access to credit.”

Bank On developed a set of national standards for financial institutions to adopt and remove some of the common barriers to opening a bank account, such as distrust of the system and initial setup fees. 

Bank On standards include no overdraft fees or low-balance fees. 

“There’s no minimum balance requirements, there’s no things that eat away at what little money may be entrusted with the financial institution,” Walker said. 

Any person can sign up for a Bank On-certified account at a participating bank. It’s meant to function like traditional bank accounts — national standards include the ability to use a debit card and access to direct deposit. 

Data gathered by the Federal Reserve Bank of St. Louis and Cities for Financial Empowerment Fund so far shows the total number of Bank On accounts opened grew from 3.4 million in 2018 to about 5.8 million in 2019. Of those who opened a Bank On account with a participating bank, 85% were new customers to the financial institution. 

Bank On participants include Chase, Wells Fargo, Arvest

One of the Kansas City coalition’s first goals is to involve more local organizations, from local nonprofits to financial institutions. 

For banks, especially those in the metro, it will be important to ensure they have Bank On-certified products — account options that meet its national standards — available for residents. 

According to 2019 data gathered from 10 financial institutions that partner with Bank On, there are already 14,000 Bank On accounts opened in the Kansas City area. Those accounts are with national banks offering Bank On products, like JPMorgan Chase, Wells Fargo and Bank of America. 

Walker said Arvest Bank, a regional company with branches in Kansas and Missouri, signed on to the Bank On initiative in late August. 

“We certainly want to see more local branches having Bank On products offered so that we’re reaching more people near their homes, near where they’re doing their shopping, so that it’s accessible and affordable,” he said.

Bridgette Cobbins, assistant county administrator with the Unified Government,  said collaborating with trusted community partners will be key in assuaging people’s distrust of banks. 

“I think that this is just a good opportunity to give people financial security right now and financial security for their futures,” she said.

This distrust is what St. Louis discovered when it started rolling out the Bank On program in 2019.

Through community sessions, people shared their stories, which were then shared with participating banks to create a better experience.

“Sometimes they just had prior negative banking experiences with financial institutions or family history that hadn’t been positive with financial institutions,” said Daniel Davis, a vice president and the community affairs officer at the Federal Reserve Bank of St. Louis. 

Davis said the Federal Reserve has supported Bank On through spreading information about the initiative, bringing partners together and collecting data.

“What we’ve been able to do at the St. Louis Fed is complement the understanding of where unbanked individuals are with where the Bank On accounts are bubbling up and where consumers are actually taking up these products,” he said.

More than 26,000 bank accounts have been opened in St. Louis as of the end of 2019, according to data from 10 provided to the Federal Reserve Bank of St. Louis. Davis credits the work of the Bank On coalition. Now, FDIC data from 2019 shows about 3.4% of the city’s residents don’t have a bank account, compared to 7.6% in 2009.

How Bank On accounts work

Bank On is overseen by the Cities for Financial Empowerment Fund, a national organization that focuses on municipal engagement and financial empowerment. It started in San Francisco and New York in 2006 and has grown to include more than 75 cities with a local Bank On coalition.

Banks will receive a Bank On certification if they offer accounts that meet its national standards, which — in addition to no overdraft or low balance fees — include: 

• a minimum opening deposit of no more than $25 
• a monthly maintenance fee of $5 or less if the fee cannot be waived
• at least two options to waive the monthly fees entirely with one transaction 

According to the Cities for Financial Empowerment Fund, there are more than 100 financial institutions in the U.S. that now offer Bank On-certified accounts, amounting to about 40% of bank branches. This includes national banks like JPMorgan Chase, U.S. Bank, Wells Fargo and Bank of America. 

There are many reasons why having a bank account is beneficial. It can help a family save money for the future, make it easier to get a loan for a house or a car, and make it easier for someone to receive federal benefits, like child tax credits. 

“You will have that security of knowing that the money that you have is protected,” said Cobbins with the Unified Government.