Patrick-Murray Administration Joins Community and Financial Organizations to Announce Campaign Promoting Low-Cost Banking Services
Checking accounts with reduced fees are less costly than check-cashing services, help create beneficial long-term financial relationships for consumers
During today's event at DotWell, a Dorchester community-based organization that is a collaborative effort between the Codman Square Health Center and Dorchester House Multi-Service Center, participants discussed the benefits to having a bank or credit-union account, and launched the new "Save Money! Bank on It" campaign encouraging consumers who do not have bank accounts to sign up for one.
In addition to OCABR and DOB, participating organizations included the Massachusetts Bankers Association, Massachusetts Credit Union League, Greater Boston Interfaith Organization, Massachusetts Community & Banking Council and the Midas Collaborative.
"Banks across Massachusetts offer a wide range of low or no-cost accounts that can save consumers hundreds of dollars a year compared to check-cashing services," said Kevin Kiley, Executive Vice President of the Massachusetts Bankers Association.
"The last thing people need as we emerge from a recession is to be paying too much for financial services," said Margaret Miley, Executive Director of the Midas Collaborative.
Last month, the Division of Banks published a report on check-cashing fees that shows consumers can save significantly by using a low-cost checking account compared to a check-cashing service. The report found that a Basic Checking Account charges no more than $3 a month, or a maximum of $36 a year for baseline services, while cashing weekly payroll checks and writing money orders through a check casher would cost $139 to $1,424 a year. Consumers are encouraged to look at affordable bank account options that meet their specific needs at an affordable cost.
"By opening a checking account consumers can realize short-term savings and avoid paying the exorbitant fees often charged by check-cashers, and in the long run create banking relationships that later prove helpful when seeking services like an auto loan or mortgage," said Barbara Anthony, the Undersecretary of the Office of Consumer Affairs and Consumer Regulation. "We are pleased to be joining our partners in this effort, and spreading the word around the Commonwealth about this important banking initiative."
"The Division of Banks report underscores that Massachusetts consumers utilizing check cashers will spend more for transactions than having a checking account with a local credit union," said Daniel F. Egan, Jr., President of the Massachusetts Credit Union League. "As not-for-profit, local financial cooperatives, state- and federally-chartered credit unions are committed to ensuring that all of the working families of the Commonwealth have access to credit union service and a stable financial path by providing low cost products and services."
"Through our 'Moving from Debt to Assets' program, the Greater Boston Interfaith Organization has seen the harm caused by the usurious fees that check cashers charge," said Reverend Hurmon Hamilton, President of the GBIO. "We intend to urge the members of our 50 churches, synagogues and mosques to use the low-cost banking alternatives."
"We know that that financial stress impacts the health of our patients and community members. That's why we stand with Undersecretary Barbara Anthony and others today to urge Dorchester residents to choose financial partners who will help them build income and assets and to avoid businesses that keep them financially stressed by charging high fees for check cashing, tax preparation, and small short-term loans," said Doreen Treacy, the Director of the CivicHealth Institute at DotWell.
The "Basic Banking for Massachusetts" program was launched in 1994 by the Massachusetts Community & Banking Council to expand access to bank products and services, and to encourage those with modest incomes to establish banking relationships. The Basic Checking Account requires no more than $25 to open an account, charges a monthly fee of no more than $3, provides at least 15 free withdrawals per month (including at least eight checks), and charges no more than $1 for each withdrawal over the allowable number of free withdrawals.
This year, 130 banks in Massachusetts offer accounts through the "Basic Banking for Massachusetts" program (or accounts that meet the program's requirements), which include minimal fees. Managing finances through a bank account has proven to be less-costly than using check-cashing services, and creates the potential for better and more varied financial services in the future through an existing banking relationship.
"Banks that participate in 'Basic Banking for Massachusetts' are making an effort to serve the needs of the community by providing an affordable alternative to check-cashing services," said Kathleen Tullberg, Manager of the Massachusetts Community & Banking Council.
Find more information about "Save Money! Bank on It" at www.mass.gov/bankonit.
The Patrick-Murray Administration's Office of Consumer Affairs and Business Regulation is committed to protecting consumers through consumer advocacy and education, and also works to ensure that the businesses its agencies regulate treat all Massachusetts consumers fairly. Follow the Office at its blog, Consumer Connections, and on Twitter, @Mass_Consumer.