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Volume 6, Issue 4, 2006   Federal Reserve Bank of Dallas

Get Checking Launches in Houston

Access to mainstream financial services is on the horizon for unbanked and underbanked consumers in Houston through Get Checking™, a national initiative sponsored by eFunds Corp. and the University of Wisconsin Extension.

Get Checking is an education program that helps unbanked consumers—those who have never had an account at a financial institution—establish a successful primary banking relationship. It is also designed for formerly banked consumers—those who may have had problems with an account in the past and are now listed on ChexSystemsSM.

ChexSystems, owned by eFunds Corp., is a banking industry database that tracks consumers who mishandle or abuse checking and savings accounts. Persistent insufficient funds, misuse of debit and ATM cards, and unpaid overdrafts will earn consumers a negative ChexSystems report. The information stays in the database for five years unless it is removed by the reporting source. Often these consumers lose banking privileges, and they find it difficult to open another checking account.

In the Get Checking program, consumers with ChexSystems listings are required to obtain a copy of their ChexSystems report and clear all past balances (make restitution). Institutions are not required to open an account if there is evidence of fraud on a prior account. Graduates of the Get Checking course receive a certificate, and their ChexSystems records are annotated. They are then eligible to open a checking account at a partner financial institution. Consumers are only allowed to go through the program twice.

The Credit Coalition, a local nonprofit agency, is taking on the lead role for the program in Houston. As lead agency, the coalition conducts Get Checking classes and acts as a third party to help overcome trust issues that can be an obstacle to the unbanked.

The six-hour Get Checking class covers:

  • Low-cost checking options.
  • How to avoid costly fees.
  • How to manage checking and savings accounts.
  • How a checking account can help establish credit and access to other services.

A kickoff for Houston's Get Checking initiative was held August 23 at the Dallas Fed's Houston Branch. Many current and prospective bank partners and community organizations attended. The event featured a presentation by Get Checking advisory council member Susan Montoya, who is vice president and corporate CRA officer of First Bank, and a question-and-answer session with Melanie Trausch, Get Checking national program director and eFunds product solutions manager.

In her remarks, Montoya emphasized the need for financial institutions to reach the "population that spends $10 billion a year on transactions such as check cashing, money orders, money transfers and bill payments" because they lack access to mainstream financial services.

Montoya characterized three types of consumers who face obstacles: never banked, formerly banked and underbanked. All groups lack financial education and have poor or no credit history. The never banked are also often undocumented, have no U.S. banking history and distrust banks.

Montoya noted that over 8 million consumers are currently listed on ChexSystems. ChexSystems is a consumer-reporting company governed by the Fair Credit Reporting Act. Consumers may examine their reports and dispute any inaccuracies.

Currently, Get Checking classes are being taught in 22 states, with more than 154 financial institutions participating. The curriculum is also available in Spanish. To date, over 11,000 graduates have opened deposit accounts. As one banker commented, "It is something we can give the consumer instead of just turning down their business."

Montoya emphasized that one major responsibility of participating financial institutions is to make sure that all consumer contact staff know about Get Checking, have the brochures and follow up with consumers who are referred to the program.

"Helping consumers become knowledgeable through education is the key," says Sherrie Young, executive director of the Credit Coalition. "We are excited about bringing this dimension to the coalition and to Houston. It matches the goals of the Credit Coalition by giving consumers tools so they can make good financial decisions."

For more information, go to www.getchecking.org Off-site page.

Facts about Get Checking

  • The program has a 96 percent national retention rate, consistent over three years.
  • 5,300 accounts were opened as a result of this program in 2005.
  • 22 percent were never banked and had no prior U.S. banking history.
  • 78 percent were formerly banked because of ChexSystems and reentered the traditional banking system.
  • 30 percent were middle class with advanced degrees and incomes over $50,000.
  • 98 percent opened a deposit account.

Class Schedule

Date & Time Saturday, November 4, 2006
9 a.m. – 3 p.m.
Cost $40/person; $60/couple
Location Credit Coalition
3300 Lyons Ave., #201
Houston, TX 77020
  www.creditcoalition.org Off-site page

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e-Perspectives, Volume 6, Issue 4, 2006

Federal Reserve Bank of Dallas Off-site page
Community Development Office Send an e-mail
P.O. Box 655906, Dallas, Texas 75265-5906
Gloria Vasquez Brown Send an e-mail
Vice President
    Alfreda B. Norman Send an e-mail
Assistant Vice President and Community Development Officer
Jackie Hoyer Send an e-mail
Houston Branch
Senior Community Development Advisor
    Julie Gunter Send an e-mail
Community Development Specialist
Wenhua Di Send an e-mail
Community Development Economist
    Elizabeth Sobel Send an e-mail
Community Development Specialist
Roy Lopez Send an e-mail
Community Development Specialist
The views expressed are the authors' and should not be attributed to the Federal Reserve Bank of Dallas or the Federal Reserve System. Articles may be reprinted on the condition that the source is credited and a copy is provided to the Community Development Office.

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