Friday, September 06, 2013

Public Banking for the Unbanked in BDDs

I've blogged before about how public banking combined with crowdfunding can be a powerful wealth generator.  I now think there is an excellent opportunity for public banks to serve the unbanked and help low-income Americans build wealth.

The biggest national initiative to serve the unbanked that I've found so far is Bank On.  The program focuses on lobbying local bank branches to offer no-cost services to the unbanked and was pioneered right here in my town with Bank on San Francisco.  The national rollout of EARN's Bank on USA is supposed to be a federally funded initiative but I can't find any federal government site describing this program's implementation.  The FDIC's Economic Inclusion initiative has data from several pilot programs and financial education curricula, but serving the unbanked needs a permanent effort.

I've got the all-in-one solution.  Let's go back to my earlier blog article (linked up top, folks) about a public bank in every state that also runs a crowdfunding platform.  This public bank should offer no-cost checking and savings accounts to low-income individuals and should be the sponsoring institution for Individual Development Accounts (IDA).  Almost all of its transactions can be done online, but local branches of the public bank can be a nucleus for developing a Banking Development District (BDD).  The whole point of a BDD is to attract bank branches into underserved neighborhoods.  I see no reason why a public bank can't be the first to jump in to a BDD.  The New America Foundation's BDD concept works in New York.  Check out NY's state BDD program and NYC's BDD program.

I spin up these kinds of ideas all the time.  It's all part of my job as an aspiring big-shot in finance.  Now I just need to get policymakers to listen to me.  Stay tuned to this blog for more financial innovation from Alfidi Capital.