First Accounts

Summary of May 2002 Grant Awards

The Treasury Department announced its selections for First Accounts grants on May 1, 2002. The 15 awards totaling $8,357,234 will assist 35,445 "unbanked" low- and moderate-income individuals in opening accounts at insured depository institutions. The awardees were selected from among 231applications from 38 states. Those applicants requested $129,895,034.

The funds for First Accounts grants result from appropriations in the Consolidated Appropriations Act, 2001 and the Department of Transportation and Related Agencies Appropriations Act, 2001. The purpose of the appropriations is to develop and implement programs to expand access to financial services for low- and moderate-income individuals. Treasury published a notice of funding availability on December 27, 2001, inviting applications for projects that would move a maximum number of "unbanked" low- and moderate-income individuals to a "banked" status with an insured depository institution. The deadline for application submissions was March 20, 2002. In just over one month, a team of reviewers scored the 231 applications on eight criteria: reasonableness of approach; likelihood of success; self-sustainability; model qualities; timeliness; performance goal setting; experience of participating entities; and management capability.

The First Accounts grant awards are going to nonprofit organizations, insured depository institutions, insured credit unions, a community development financial institution, a faith-based organization, a local government, and a credit union foundation. The awardees will carry out projects that provide financial literacy training, connect individuals to insured accounts, develop low- or no-cost products and services, and increase access to financial services through installation of automated teller machines. The projects are focused on a wide variety of unbanked people, e.g., youth, new entrants to the workforce, recent immigrants, residents of low-income communities, residents in rural areas, native Americans living on reservations, people living in public housing, families using child care facilities.

Grant recipients will be targeting unbanked people in 25 states: California, Colorado, District of Columbia, Georgia, Idaho, Iowa, Illinois, Kentucky, Maryland, Michigan, Montana, New Jersey, New York, Nevada, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Texas, Utah, Virginia, Washington, Wisconsin, and Wyoming.

The paramount goal of First Accounts is to move a maximum number of unbanked low- and moderate-income individuals to a banked status with an insured depository institution through the development of financial products and services that can serve as replicable models in other communities without the need for ongoing public subsidies.

Information on the 15 projects awarded grants follows.

FIRST ACCOUNTS GRANT AWARDS
May 2002

CALIFORNIA

Juma Ventures in San Francisco, California, has been selected to receive a First Accounts grant in the amount of $250,000. The grant funds will be used to connect 505 unbanked low- and moderate-income youth in San Francisco to accounts at insured depository institutions over two years. Juma Ventures is collaborating with Citibank to expand an Independent Development Account program, offer banking and literacy training to youth employed in its six for-profit social enterprises and connect them to accounts, and begin a pilot in a high school. The pilot will used media-based banking literacy training to give unbanked high school students a practical knowledge of banking. The students will have the opportunity to open a low-cost checking or savings accounts with electronic access. The program will be expanded to additional schools in future years. Additional funding and in-kind contributions are coming from the Friedman Foundation, Hewlett Foundation, Merrill Lynch Foundation, private donations, and Citibank.

COLORADO

Mile High United Way in Denver, Colorado, has been selected to receive a First Accounts grant in the amount of $1,267,500. The grant funds will be used to connect 2,375 unbanked low- and moderate-income individuals in the Denver metropolitan area to insured accounts at insured depository institutions over two years. Mile High United Way is collaborating with Wells Fargo-West to provide low- and no-cost bank products including Individual Development Accounts and financial management and economic literacy training. The project will reach out to the unbanked population through employers and through community-based organizations that include labor unions, faith-based and immigrant-serving organizations, and workforce development public agencies. Four area employers have committed to be involved in promoting the low- or no-cost bank products to employees. The project takes advantage of existing relationships between individuals and their employers and community-based organizations. If successful, the initiative will be expanded to five metropolitan areas in the state. Additional funding and in-kind contributions are coming from Wells Fargo-West, Mile High United Way, Rocky Mountain Mutual Housing Association, and Del Norte Neighborhood Development Corporation.

GEORGIA

DeKalb County Extension Service in Decatur, Georgia, has been selected to receive a First Accounts grant in the amount of $271,000. The grant funds will be used to connect 330 unbanked low- and moderate-income individuals in Decatur, Atlanta, and south central DeKalb County to insured accounts at insured depository institutions over two years. To implement the project, the Extension Service has formed The DeKalb Collaborative consisting of DeKalb County Workforce Development Department, Decatur High School, Decatur/DeKalb Housing Authority, Columbia Village Residential Properties, New Leaf, Women's Bureau, Stakeholder Partnerships Education and Communication, Decatur First National Bank, Wachovia Bank, Bond Community Federal Credit Union, and Branch Banking & Trust. The project will provide consumer education workshops in English and Spanish and issue certificates to those completing the curriculum. The certificates are taken to one of the four banking partners to open a low-cost banking account. "Lunch and Learn" sessions will be held with local employers; the DeKalb County government is committed to participate. The project focuses on education in small groups over an extended period of time, working through the partnering agencies and it focuses on choice of banking establishments. The DeKalb County Extension Service and the DeKalb Workforce Department are making in-kind contributions.

IOWA

The Institute for Social and Economic Development in Coralville, Iowa, has been selected to receive a First Accounts grant in the amount of $301,000. The grant funds will be used to connect 265 unbanked low- and moderate-income individuals in 16 census tracts in Des Moines to insured accounts at insured depository institutions over two years. Called "Bank On It!", the project will provide eight hours of financial literacy training, assistance to identify and resolve obstacles to opening a bank or credit union account, and links to other asset-building programs to help meet family economic goals. Graduates will receive a certificate they can take to a partnering institution - Bankers Trust, Wells Fargo, Iowa State, Financial Plus Credit Union - or another institution. Graduates can receive assistance for six months to assure keeping their account in good standing. The focus is on partnerships forged between social organizations and banks to overcome obstacles to accounts. Banking partners will present the last training session of the financial literacy training. The emphasis is on resolving problems, building a firm financial knowledge, and maintaining the accounts. Additional funding is coming from the Annie E. Casey Foundation, Milbank Memorial Fund, and American Express Foundation.

ILLINOIS

The Center for Law & Human Services in Chicago, Illinois, has been selected to receive a First Accounts grant in the amount of $686,566. The grant funds will be used to 1,000 connect unbanked low- and moderate-income individuals in Chicago and Detroit to insured accounts at insured depository institutions over two years. The project is a partnership of The Center for Law & Human Services, Accounting Aid Society, ShoreBank, National Consumer Law Center, and Consumer Federation of America. The project will attract individuals who will have their tax returns prepared free-of-charge and allow them to open bank accounts into which their income tax refund can be deposited. First, individuals open a savings account, followed by financial education and an opportunity to open a checking account. Year-round financial literacy classes are offered to provide the necessary skills to maintain and mange the new accounts. The project focuses on using the earned income tax credit and free tax preparation to encourage opening accounts. Each of the partners is making in-kind contributions to the project.

KENTUCKY

Members First Federal Credit Union in Louisville, Kentucky, has been selected to receive a First Accounts grant in the amount of $130,000. The grant funds will be used to connect 600 unbanked low- and moderate-income individuals in 64 census tracts in Jefferson County, Kentucky, and Belle, West Virginia, to insured accounts at insured depository institutions over one year. The project will provide accounts with no minimum balance and no monthly fee. An automated teller machine will increase access in the West Virginia location. The project focuses on educating consumers about regular savings, working with limited resources, and understanding the true costs and benefits of financial services. Additional funding is contributed by the credit union and by foundations.

MICHIGAN

Mission of Peach Housing Counseling Agency in Flint, Michigan, has been selected to receive a First Accounts grant in the amount of $592,654. The grant funds will be used to connect 660 unbanked low- and moderate-income individuals in Genesee, Oakland, Saginaw, Lapeer, and Shiawasee Counties to insured accounts at insured depository institutions over two years. The project will be implemented by a partnership of Mission, Firth Third Bank, Genesee County Family Independence Agency, and local small businesses. Individuals will receive education, banking access, and counseling support during their transition to using banking services. The project will install three ATM machines within the five counties to increase access to financial services. The focus of the project is on unmarried, under-employed, and unemployed persons. Additional funding and in-kind contributions are coming from Fifth Third Bank, Michigan State University Interns, and Michigan State University Community and Economic Development Program.

MONTANA

Native American Development Corporation, a community development financial institution in Billings, Montana, has been selected to receive a First Accounts grant in the amount of $425,812. The grant funds will be used to connect 290 unbanked low- and moderate-income individuals on Wind River, Crow, Northern Cheyenne, and Flathead Reservations to insured accounts at insured depository institutions over two years. The project will promote financial literacy, giving 20 hours of college credit or TANF credit, award certificates accepted by the CDFI, and provide free checking and savings accounts. Three automated teller machines will be installed to increase access to financial services. The project focuses on employers' involvement at three levels: employed participants will seek direct deposit with their employers; employers with five or more employees participating in the project will join the Coordinating Team; and the Coordinating Team will serve as advisors to the project. Additional funding will come from First Interstate Bank and J.M. Cozzens.

NEW YORK

National Credit Union Foundation in Washington, DC, in collaboration with the New York Credit Union Foundation has been selected to receive a First Accounts grant in the amount of $765,806. The grant funds will be used to connect 2,100 unbanked low- and moderate-income individuals in rural and metropolitan counties of New York State - Albany area; New York City; Buffalo/Niagara area; and Tompkins, Washington, Warren, and Saratoga Counties - to insured accounts at insured depository institutions over two years. The New York Credit Union League, working with five credit unions, Cornell University, and Cornell Cooperative Extension will provide low-cost accounts to individuals new to the workforce at urban, metropolitan, and rural credit unions. This is an employer-based project in which employers will identify employees and provide training space for an educational component - the Work-Force Development Initiative - delivered by Cornell Cooperative Extension. Four portable automated teller machines will be used for education. The project focuses on new workforce entrants. Additional funding and in-kind contributions will be coming from the New York Credit Union Foundation and the New York State Credit Union League.

NORTH CAROLINA

Latino Community Credit Union in Durham, North Carolina, has been selected to receive a First Accounts grant in the amount of $1,334,000. The grant funds will be used to connect 6,600 unbanked low- and moderate-income individuals in two North Carolina regions to insured accounts at insured depository institutions over two years. The project will open two branches of the Latino Community Credit Union to provide low-cost electronic accounts, on-site financial education, an employer outreach program, and special deposit products to meet the needs of Latino immigrants. The project focuses on Latino immigrants in non-urban areas of the state. The State Employees' Credit Union is making an in-kind contribution to the project.

OHIO

Fifth Third Bank in Columbus, Ohio, has been selected to receive a First Accounts grant in the amount of $760,863. The grant funds will be used to connect 1,000 unbanked low- and moderate-income individuals in south, near east, near north, and west sides and the north east quadrant of Columbus to insured accounts at insured depository institutions over two years. The Bank is collaborating with the Ohio CDC Association, The Ohio State University Extension Center, Homes on The Hill, Columbus Neighborhood Housing Services, MiraCit Development Corporation, South Side CAN, and Northside Development Corporation in "Community Partners Banking on the Unbanked." The project will provide financial and economic literacy training, install three automated teller machines, and connect individuals to Totally Free Checking accounts. Four public-sector employers - City of Columbus, Central Ohio Transit Authority, Columbus Metropolitan Housing Authority, and Columbus Public Schools - are committed to market the program to their employees. The project is a collaborative, city-wide model to reach unbanked persons throughout the community. Additional funding and in-kind contributions are coming from Fifth Third Bank.

TEXAS

National Credit Union Foundation in Washington, DC, in collaboration with El Paso Credit Union Affordable Housing, a credit union service organization, has been selected to receive a First Accounts grant in the amount of $92,504. The grant funds will be used to connect 4,000 unbanked low- and moderate-income individuals in El Paso and El Paso County to insured accounts at insured depository institutions over two years. The service organization will work with eight credit unions to reach out and engage unbanked persons in their areas to low-cost electronic checking and savings accounts. In addition, a homeownership counselor located at each credit union will explain how to take advantage of account features. Additional funding and in-kind contributions are coming from National Credit Union Foundation, Texas Credit Union Foundation, and the eight participating credit unions - El Paso Area Teachers Federal Credit Union, El Paso Bell Federal Credit Union, Fort Bliss Federal Credit Union, Golden Key Federal Credit Union, Government Employees Credit Union of El Paso, Mountain Star Federal Credit Union, and West Texas Credit Union.

WISCONSIN

Legacy Bank in Milwaukee, Wisconsin, has been selected to receive a First Accounts grant in the amount of $342,467. The grant funds will be used to connect 500 unbanked low- and moderate-income individuals in Milwaukee to insured accounts at insured depository institutions over one year. The bank has established an alliance with the Child Care Directors' Group and the Early Childhood Council of Milwaukee to bank child care providers, providers' employees, and the parents served by the providers and to give on-going support and services to ensure the sustainability of the banking relationship. Three automated teller machines will be installed, including one at a child care facility used by 1,500 adults weekly. The project focuses on the child care industry and on maintaining accounts that are established. In addition to conducting seminars on how to use bank products, Legacy Bank will monitor accounts weekly. Problematic customers will be invited for additional education and counseling with Family Services of Milwaukee and the University of Milwaukee-Wisconsin Extension. Additional funding is coming from Legacy Bank.

MID-ATLANTIC REGION

Boat People S.O.S. in Falls Church, Virginia, has been selected to receive a First Accounts grant in the amount of $604,492. The grant funds will be used to connect 1,120 unbanked low- and moderate-income individuals in District of Columbia; Northern Virginia; Suburban Maryland; Camden, New Jersey; Philadelphia, Pennsylvania; and Hampton Roads, Virginia, to insured accounts at insured depository institutions over two years. The project will target Vietnamese refugees and immigrants in the US for less than ten years and individuals 60 years of age and over to open bank accounts with its partner Citibank, which is offering no-charge or low-charge checking accounts and workshops on financial literacy. Individuals will receive free tax counseling and tax return preparation and individual development account enrollment, if eligible. Beginning in the mid-Atlantic states, the project will spread to 12 locations across the US. Local partnerships of community-based organizations will continue the activities. Citibank and volunteers from community-based organizations are making in-kind contributions to the project.

NORTHWESTERN REGION

National Credit Union Foundation in Washington, DC, in collaboration with Washington Credit Union League has been selected to receive a First Accounts grant in the amount of $532,570. The grant funds will be used to connect 14,100 unbanked low- and moderate-income individuals in California, Nevada, Washington, Oregon, Idaho, Montana, North Dakota, and Utah to insured accounts at insured depository institutions over eighteen months. The project will provide basic consumer financial education and the individuals will develop responsible, low-cost, trusting relationships with mainstream financial institutions. Participants will also gain access to affordable international money transfer services at greatly reduced costs through the credit unions using IRNet. The project will be implemented through a network of experienced financial specialists in each of the eight states. Twenty-seven credit unions are participating. The project focuses on financial literacy in rural areas as a means of connecting individuals to insured accounts.