California Governor Arnold Schwarzenegger announced on Thursday that California will be the first state in the United States to launch an effort to help working Californians without bank accounts open starter accounts.
The announcement was made in an opinion piece co-authored with former President Bill Clinton and published in Thursday's Wall Street Journal.
The new initiative, called "Bank on California," will help more low-and-middle-income Californians establish savings, build a credit history, gain access to lower-cost sources of credit and invest for the future.
"Through 'Bank on California' we will help working families save money by accessing basic financial services others may take for granted -- putting them in the financial mainstream," said Schwarzenegger. "This simple, innovative idea won't cost taxpayers a dime, helps working families get ahead and grows our economy at the same time."
Americans each year spend 8 billion U.S. dollars for basic financial services through alternative financial institutions such as check cashing outlets, payday lenders and pawnshops, according to a new Brookings Institution report.
This translates into 40,000 dollars over the course of a career for the average full-time worker. In addition, families without bank accounts may not have a safe place to keep their money and can become a magnet for crime.
"Bank on California" will be a collaborative voluntary initiative with the help of financial institutions, city mayors, federal bank regulatory agencies, and community groups, according to the announcement.
It said over the next few months, the governor's office will take the lead in bringing together banks and community groups in five to seven markets statewide and promote public awareness of the effort.
Financial institutions will develop and market starter accounts. Five to seven city mayors will lead local coalitions and help raise awareness. Community groups will inform their clients about why they should and how they can open starter accounts through "Bank on California."
According to the Brookings Institution, 11 percent of California households do not have a checking account, while 47 percent do not have a savings account.
Source:Xinhua
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