According to the British government-backed watchdog, Consumer Focus, almost 1,000,000 Britons - or about 2% of the British population - does not have a bank account. If we were to extrapolate these figures to the United States, where to 2010 census reported 308,745,538 residents, we would assume that at least 6 million people do not have bank accounts. Many have preyed on this group in order to extract great fees, such as Russell Simmons, media mogul and founder of Def Jam Records who introduced the Rush Card, a prepaid debit card that caters to the underbanked needs. Yet, nobody has addressed this group's fundamental problem: How to maintain financial stability in this economy and society.
So, what is the option for this population? They could work exclusively with cash, but in today's society paperless is becoming the norm and cash itself is fragile. It can be lost, damaged or stolen. Further, how many employers pay cash? Another more viable option is that this population use check cashing establishments. However immediate this solution is, the fees are high and this does not establish any sort of credit or build savings.
One upstart bank in the South Bronx is focused on the needs of the unbanked and underbanked to improve the socio-economic environment of the area. Four year old CheckSpring Bank is targeting this population in the Greater New York City Metro Area. It identifies its purpose as establishing a low cost alternative to check cashing establishments while allowing those customers to establish credit, build assets and save money. These are often habits and traits taken for granted, but are in fact are learned behaviors.
CheckSpring is specifically located in the Bronx to counter the Crain's New York Business observation that, "While [in 2007] Manhattan boast(ed) just 3,000 people per bank branch, the South Bronx (had) about 15,000 residents per branch." CheckSpring is FDIC insured and has created a following of these underbanked consumers. To encourage the transition to mainstream financial products, CheckSpring offers customers a choice between convenience services such as check cashing, bill pay and money transfers, and the deposit and lending products available at traditional banks.
This asset based society needs money to grow. By having underbanked consumers begin to create a foundation of assets the bank then can lend to local businesses. CheckSpring is an approved SBA (Small Business Administration) lender. CheckSpring also offers youth savings match programs, tax refund match programs and check casher-to-depositor transition products. Traditional savings, checking and CD accounts are also available.
To further its mission, CheckSpring is partnered with Ariva Inc., a Bronx based non-profit that provides customers with access to free tax preparation services and financial education classes. CheckSpring also partners with Seedco, Newark Now and Food Bank for New York to support asset building programs throughout the region.
While "banking" and "banker" is often [recently] deemed selfish or opaque or greedy, some banks are actively motivating change. It should be noted CheckSpring is not a non-profit organization, the end game is for the stakeholders of CheckSpring to make money and that one need not be of the underbanked population to use their services and products. Currently it is a small bank focused on the unbanked segment; however, they have plans to expand their model to other regions.
