The Chicago Region coalition was formed in October 2006 and the Chicago AEI rollout event was held in March 2007. The Chicago AEI coalition now consists of over 40 members. FDIC staff are focusing on generating activities that result in basic bank accounts being opened or retained by AEI member financial institutions (basic banking accounts include Second Chance Banking Programs); identifying institutions to develop or modify a small dollar loan (SDL) product; and assisting institutions to develop and offer remittance products. The fourth area consists of working with AEI members to provide financial education to the public.
The FDIC has served as a facilitator for the coalition’s work plans, identifying the financial service needs of residents of the target market and implementing solutions to deliver those services through outreach and education, trusted service providers, appropriate product mix and appropriate distribution channels. The majority of these efforts have included a variety of tools designed to promote sustainable banking relationships and wealth building, such as: financial education, direct deposit campaigns, train-the-trainer services, and developing coalitions and consortiums.
- A total of 10,489 new bank accounts have been opened
- Over 6,728 consumers completed financial education classes.
- Financial institutions initiated 12 new product offerings.
Alliance for Economic Inclusion Southeast Michigan (AEI SEM)
In 2011 the FDIC approved the formal launch and recognition of Alliance for
Economic Inclusion Southeast Michigan (AEI SEM). The formal establishment of
the AEI builds upon and sustains earlier initiatives led by local community
based organizations, during a soft launch period, to increase access to basic
banking services and promote financial stability among low- and moderate- income
consumers adversely impacted by the economic challenges. United Way of Southeast
Michigan and Bank on Detroit serve as key partners in the collaboration that
includes 40 community-based organizations, financial institutions and others
The Detroit-Warren-Livonia, MI Metropolitan Statistical Area has approximately
171,000 (9.9 percent) unbanked households and 310,000 (18 percent) of all households
are underbanked, according to the FDIC’s 2009 National Survey of Unbanked
and Underbanked Households. The geographic territory for the AEI’s outreach
and initiatives include: Wayne, Oakland, Macomb and Washtenaw counties. The
multi-county coalition will utilize team leaders and work groups with a strategic
focus on four key areas:
- delivery of financial education classes, workshops and train-the-trainer
sessions using the FDIC Money Smart Financial Education curriculum or similar
financial education products;
- promoting banking relationships and increased access to basic transaction
and savings accounts in collaboration with the Bank on Detroit initiative
and other financial institution and community based organizations throughout
- exploring programs, products and financial services to assist unbanked
and underbanked consumers whose credit scores adversely impact their ability
to utilize mainstream financial services and products; and
- facilitating partnerships and new delivery channels that will provide
micro, small and medium-size employers with the ability offer financial
education, direct deposit opportunities and other basic banking services
to increase employee
access to mainstream financial services.
Milwaukee Alliance for Economic Inclusion (AEI)
FDIC Community Affairs staff, in collaboration with The Wisconsin Women’s
Business Initiative Corporation, financial institutions, and community organizations,
is using financial education to expand access to basic retail financial services
for unbanked and underbanked in Milwaukee, Wisconsin.
The Milwaukee-Waukesha-West Allis, Wisconsin, Metropolitan Statistical Area (MSA) has approximately 63,000 (9.7 percent) unbanked households, according to the 2009 FDIC National Survey of Unbanked and Underbanked Households (Survey). These households do not have a checking or savings account at a mainstream financial institution (bank or credit union). An additional 81,000 households (12.5 percent) are underbanked; the households have an account, but have used alternative financial service providers such as a check casher, payday lender, or rent to own store.
AEI partner organizations are working together to increase the use of banks and credit unions by unbanked and underbanked Milwaukeeans. Under the program, low- and moderate-income consumers will have the opportunity to increase their economic stability by utilizing mainstream financial products and services.
According to the FDIC Survey, many unbanked households do not have a banking relationship because they believe accounts are too costly. The AEI provides a solution to this concern. Through the program consumers will be able to open a checking account with a $25 deposit and/or a savings account with a $50 deposit. Many banks traditionally require $100 as a minimum opening deposit for checking accounts. Individuals and families who open accounts through the AEI will also gain important financial information that will enhance their opportunity and ability to build savings and other assets.
Some financial institution partners offer products that meet the needs of underbanked consumers, such as:
- Small dollar loans in amounts less than $2,500 with a repayment period of 90 days or more and an annual percentage rate of 36 percent or less
- Check cashing services
- Affordable remittance services
- Credit builder loans to help improve credit ratings
- Reloadable debit cards
An additional program feature provides participants with the option to become a member of Wisconsin Saves. This program provides resources to help individuals build wealth by developing positive spending and saving habits, to reverse the trend of high credit debt and to be empowered to reach their financial destination through healthy money management. Each Wisconsin “Saver” will receive
- A subscription to the quarterly American Saves newsletter with financial news, savings tips, and motivational stories
- Information on financial planning seminars
- Access to a variety of community programs to help Savers become financially secure
During the first year of operation, the Milwaukee AEI plans to assist 450 individuals with opening new accounts, provide financial awareness information to 1,500 individuals, and identify 450 new Wisconsin “Savers.”
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