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BANK ON MUSIC CITY SEEKS TO CREATE FINANCIAL STABILITY FOR WORKING FAMILIESFebruary 07, 2012
NASHVILLE, TN, Feb. 7, 2012—Mayor Karl Dean, United Way of Metropolitan Nashville, and other community partners today launched Bank On Music City, an initiative to help Nashvillians with little banking history establish conventional banking relationships, build a credit history, and gain access to low-cost sources of credit to build a solid future.
The Federal Reserve Bank and other financial industry officials attended the launch in East Nashville at the Sam Levy Homes, where United Way is hosting free tax preparation for low- to moderate-income households through its Volunteer Income Tax Assistance (VITA) program.
Bank On Music City is a community partnership of local banks, credit unions, government, and community organizations with a mission to connect individuals who are not currently utilizing a financial institution with mainstream financial services and customized products including affordable checking, savings and credit.
Bank On Music City educates first-time and occasional bank users on how to become financially stable and avoid the pitfalls of predatory financial service alternatives. Nine local banks and financial institutions have already joined the program by tailoring product offerings to individuals without a previous banking relationship or a satisfactory banking history. They offer checking and savings accounts with low or no monthly fees and monthly balances, even for individuals who may have mishandled previous accounts. In those cases, completion of financial education courses may first be required by the financial institution.
The program will be led by United Way of Metropolitan Nashville and is a recommendation of the Economic Opportunity Workgroup of Mayor Dean’s Poverty Reduction Initiative. Helping unbanked and under-banked Nashvillians establish banking relationships is a priority of the group in advance of new federal regulations that will require recipients of Social Security and other government payments to use direct deposit by April 2013.
“The underlying objective of Bank On Music City is to help hard-working Nashvillians keep more of what they earn by making informed financial decisions,” Mayor Dean said. “When more families become financially stable, it benefits the entire community. By offering individuals financial alternatives, we will help them succeed.”
The Economic Opportunity Workgroup, which studied the problem extensively over the past three years, concluded that a healthy mainstream banking relationship is the first and most crucial step toward financial stability. This foundational banking relationship opens doors for individuals to pursue higher education and valuable job skills, homeownership and entrepreneurship.
“This is an exciting solution to address one of our community’s most debilitating family problems: financial instability,” said Margaret Dolan, Vice President of Community Relations, Ingram Industries Inc., and Board Chair, United Way of Metropolitan Nashville. “Bank On Music City is a new initiative connecting Nashvillians with little or no banking experience with financial products and services in order to establish conventional banking relationships, build credit, and achieve lasting financial success.”
“United Way of Metropolitan Nashville has identified three primary areas of focus in the community: Education, Financial Stability and Health,” added Dolan. “Our work in identifying and meeting needs in these three areas is impossible to do without the commitment and the leadership of so many others. Today is a great example of our community at its best when working together toward a common goal.”
The nine banks that are charter members of Bank On Music City are: Citizens Bank, Fifth Third Bank, First Tennessee, Old Hickory Credit Union, Pinnacle Financial Partners, Regions, Reliant Bank, SunTrust Bank and The Tennessee Credit Union.
Organizations that will assist in the financial education process include Catholic Charities, Christian Community Services, Inc., Conexión Américas, Metropolitan Nashville Public Schools’ Community Career Center, New Level CDC, Residential Resources, Tennessee Department of Financial Institutions, United Way’s Martha O’Bryan Family Resource Center and University of Tennessee Extension.
Other partners include Apprisen Financial Services, Belmont University, Gap Community, Metro Social Services, Nashville Alliance for Financial Independence, Nashville Council on Aging, Nashville Mayor’s Office and Nurses for Newborns.
Research by the Corporation for Enterprise Development (CFED), a national nonprofit organization dedicated to expanding economic opportunity for low-income families and communities, suggests 9.9 percent of Nashville’s population – almost 60,000 individuals – are “unbanked” meaning they have no mainstream banking relationship. An additional 19.6 percent are “underbanked” meaning they have or have had a mainstream banking relationship but have used predatory alternatives such as payday loans or check cashing services.
Industry specialists have cited the following:
• 12 million Americans are trapped annually in a cycle of 400 percent interest in payday loans;
• check cashing services keep as much as 10 percent of an individual’s income;
• paid tax preparation for low- to moderate-income taxpayers can cost as much as 25 percent of the total refund; and
• a low-wage worker who has $500 in a savings account with a bank or a credit union is eight times less likely to utilize these predatory alternatives.
To learn more about Bank On Music City, please visit: www.bankonmusiccity.org.
About United Way of Metropolitan Nashville
United Way of Metropolitan Nashville seeks to impact the education, financial stability and health of Nashvillians through partnerships, innovation and return on investment. Last year the organization produced a direct and identifiable impact of $50 million through its 2-1-1 Helpline, Family Resource Centers, Read to Succeed Program, Volunteer Income Tax Assistance (VITA) Program, Restore The Dream Partnership and Outcome-Based Investments. For more information about how United Way of Metropolitan Nashville is positively impacting the Nashville community, visit: http://www.unitedwaynashville.org.