Bank On Boston: Economic Mobility through Banking Access in Boston

The following post is from Joe Christo, a Program Director and a 2017 Summer Fellow with the Mayor’s Office of New Urban Mechanics.

In Boston, 10% of households are unbanked, meaning they do not have a checking or savings account, and 20% of households are underbanked, meaning they have a checking or savings account but still utilize alternative financial services such as check cashers, according to reports from the Federal Deposit Insurance Corporation (FDIC) and Prosperity Now. The FDIC report also cites that unbanked and underbanked rates are higher among lower-income households, and highlights that households with mainstream banking accounts can “deposit funds securely, conduct basic financial transactions, accumulate savings, and access credit on fair and affordable terms.”

So, in a city with a well-documented wealth gap, where creating opportunities for economic mobility is essential, what is being done to address this issue?

This summer, as a summer fellow in the City of Boston Mayor’s Office of New Urban Mechanics (MONUM), I partnered with the City of Boston Mayor’s Office of Financial Empowerment (OFE) and the Cities for Financial Empowerment (CFE) Fund to design a program called Bank On Boston and prepare it to launch. The program is part of a nationwide movement of Bank On programs led by CFE, and will take the form of a coalition of partners that connects Boston residents with reliable financial services that can help them save, grow, and access their money. The goals of the program in Boston are to ensure that all Boston residents have access to safe and affordable financial products and services, to empower Boston residents to build wealth, and to encourage economic mobility.

In early June, I started working with Mimi Turchinetz and Constance Martin at OFE to begin applying the MONUM methodology of “Explore, Experiment, Evaluate, and (potentially) Expand” to planning this program.

We started with background research, conducting a comprehensive literature review on the subject area, and interviewing City of Boston employees who have discussed launching similar initiatives previously.

Then, we gathered best practices and discussed program model options with CFE, Bank On San Francisco, Bank On Seattle, and other coalitions.

It is worth noting here that the first Bank On program was started in San Francisco in 2006, and the next year Seattle launched one as well. Over the next several years, other Bank On programs were established around the country, taking on various models and forms. Recently, CFE has established guidelines and started offering technical assistance that help local programs launch.

Next, while we were gathering best practices, we simultaneously analyzed local data in collaboration with the Boston Planning and Development Agency (BPDA), identified trends, and talked with residents, all of which helped inform how we would tailor this program to Boston’s needs. One of the most significant findings from our analysis was that Boston has 45 check-cashing locations, and 26 (or 57%) are in Roxbury, Dorchester, and East Boston, while those three neighborhoods only have 31 (or 12%) of the city’s 267 commercial bank branches. Feedback from residents at check cashers that I visited, however, also revealed that check cashers do some things better than traditional financial institutions, including offering low-cost or free money orders and low-cost international remittances, an important consideration as we design the program.

The last part of our work over the summer was beginning to build the coalition that will guide this program. Thanks to the relationships that OFE has established over the years, we were able to quickly engage 10 government agencies, community groups, and financial institutions that are all excited about this initiative, and held our first coalition meeting in late July.

Since my summer fellowship ended in early August, I have stayed on with MONUM, and have continued to work on a variety of projects, including Bank On Boston. The program’s momentum has increased throughout the fall, and the coalition has expanded to 16 partners, which now include:

  • Boston Federal Reserve Bank
  • Federal Deposit Insurance Corporation (FDIC) Boston Alliance for Economic Inclusion (BAEI)
  • Massachusetts Community and Banking Council (MCBC)
  • Action for Boston Community Development (ABCD)
  • United Way of Massachusetts Bay and Merrimack Valley
  • City of Boston Department of Health and Human Services (HHS)
  • City of Boston Mayor’s Office of Immigrant Advancement (MOIA)
  • Bank of America
  • Blue Hills Bank
  • Boston Private Bank and Trust
  • Brookline Bank
  • City of Boston Credit Union
  • East Boston Savings Bank
  • Eastern Bank
  • Santander Bank
  • Webster Bank

Our coalition partners, Mimi, Constance, and I have been focusing on refining the program model and metrics, establishing a clear definition of what success looks like, and making sure that all aspects of the program are customized to residents’ needs. Further, we have been focusing on the program’s approach to outreach, and ensuring that our efforts are integrated with other OFE programs. We also announced the program publicly on October 25, 2017 and will be formally launching in early 2018.