Financial help is on the way for Little Rock city employees who need access to banking services.
Mayor Frank Scott, a former banker, announced Tuesday that city employees and Little Rock residents who have municipal IDs can open accounts at nine financial institutions that participate in the BankOn Arkansas + coalition.
BankOn institutions provide debit cards to individuals who either can't afford or are reluctant to use traditional checking accounts. In addition, BankOn will work with the city to provide financial literacy information to city employees.
"I am thrilled that BankOn Arkansas + and these nine financial institutions are removing barriers to banking, such as fees to establish and keep a bank account," Scott said. "By improving access to two mainstream financial services, we are helping Little Rock residents and employees gain more economic stability and rely less on more expensive options to make basic financial transactions."
Statistics show that 27% of Arkansans either don't have a bank account or are considered "underbanked," meaning they have an account but still rely on other predatory services with high fees that can cripple household budgets.
BankOn accounts have no monthly charges and do not have overdraft fees. "These are low-barrier threshold accounts," said Kara Wilkins, director of BankOn Arkansas.
Though BankOn operates in dozens of communities and major metropolitan areas across the country, Arkansas has the only statewide coalition and Little Rock is the first city in the state to join the effort.
"The No. 1 reason most people don't bank is because they don't trust banks," said Darrin Williams, chief executive officer of Southern Bancorp, which is a founding partner of the BankOn Arkansas effort.
"Surprise fees" like overdraft charges zap budgets, Williams said. "A BankOn account cannot be overdrawn," he said.
Since trust of banks is low in financially strapped areas, Williams said it is futile to advertise the BankOn services. That's why it's important to have partners like the Little Rock government. "We rely on trusted partners to refer people to these accounts" he added. "That's what makes this unique."
Another partner, Entergy Arkansas, has participated in the coalition from the start of the program. Customers can use the BankOn debit cards to pay their bills and avoid late fees that can pile up.
"We want to help customers become more financially secure, more financially independent and more financially stable," said John Bethel, director of public affairs at the electric utility. "That in turn helps communities in which they live become more economically healthy."
Business on 09/11/2019