Residents of Rapid City, South Dakota, will soon find it easier to get a bank account. On Monday, a new city initiative called “Bank On Rapid City” was launched. The program connects residents who do not bank with low-cost or free savings and checking accounts at seven Rapid City credit unions and banks. These residents will no longer need to rely on payday loans and check cashing services for their banking.
This new initiative is part of the National League of Cities program that is proving successful throughout the U.S. Rapid City received free technical assistance in 2009 to help create a local program. An FDIC survey conducted that year found that approximately six percent of Rapid City residents do not have a bank account and 16.8 percent still use check cashing or payday loan services even with an account.
U.S. Bank is one of the participating institutions and District Manager Patty Hogan hopes it can help consumers keep more of their hard-earned money. Ms. Hogan said the bank wants to help residents avoid high-priced borrowing, maximize savings, and improve their credit rating. Without mainstream banking, these goals may never be attainable.
Bank On committee Co-Chair Bonnie Spain wants residents to know that they can overcome previous obstacles to having a bank account. It is not as difficult to get a credit union or bank account as many people think, she said. Doing so can save a full-time worker earning $8 hourly $700 or more in check cashing fees.
Customers with a bad banking experience in their past will be entitled to a “second chance account” upon agreeing to complete a free program regarding financial education. Employees at each of the participating institutions have been trained to work with new Bank On customers. Their goal is to help residents achieve financial security and stability.
