Program to encourage banking, financial literacy

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United Way teams with businesses to create Bank on Central Kentucky

By Amber Coulter

Many area residents unable to open checking or savings accounts will have a new option beginning this month.

United Way of Central Kentucky and local financial institutions, community organizations and governments announced Thursday morning a new program aimed at helping and encouraging residents to open bank accounts and use bank services.

The program, called Bank on Central Kentucky, also includes a financial literacy class. It focuses on issues such as the basics of banking and savings accounts and how saving a little money at a time can help families avoid paying high interest rates and fees for check cashing, payday lending and other alternative

financial services, said Cole Whobrey, an AmeriCorps VISTA working with the area United Way of Central Kentucky.

Participating organizations and area government officials met Thursday at Elizabethtown City Hall to celebrate the program.

Whobrey said it was good to see the cooperation that made the effort possible.

“We have competing financial organizations coming together to do something for the community,” he said.

That cooperation allowed the program to be set up at no cost to United Way, Executive Director Chris Wilborn said.

Teaching residents how best to save their money can help them put down payments on homes, send children to college and afford other expenses good for them and the community, Wilborn said.

“A rising tide lifts all boats,” he said.

Those who complete a financial literacy class in a group or individual setting are given certificates of completion to present to participating banks. That is meant to give them a much better chance of opening a “second-chance” account, even if they have been denied one previously because of a poor financial history.

The Start Fresh! class is provided by the extension offices in Hardin, Breckinridge, Grayson, LaRue and Meade counties. That opportunity doesn’t apply to those who previously have  used a bank account fraudulently.

“Second-chance” accounts can require modest fees while account holders work for months or about a year to qualify for a regular account, but it’s cheaper and safer than some of the issues those who don’t or can’t use traditional banking sometimes face, Whobrey said.

Such accounts can be obtained by customers who are not qualified for traditional accounts because of negative financial history, such as having an account closed by a bank after excessive overdrafts that aren’t paid off in a timely fashion.

Research conducted by the Federal Deposit Insurance Corp. shows 7.7 percent on households in the nation and 11.9 percent have no bank account and rely on alternative financial services.

In Hardin County, that’s 3,090 households with no bank accounts and 8,202 residents who have an account but rely on alternative financial services, such as pawn stores, payday lenders, rent-to-own agreements and refund anticipation loans.

Risks associated with alternative resources include paying high fees, being at a greater risk of theft because of carrying large amounts of cash and not being able to access money after a fire or weather disaster, Whobrey said.

Representatives of several local payday lenders said they were not allowed to comment.

For more information about the program, a list of partnering financial institutions and organizations and dates for scheduled financial literacy classes, go to  www.unitedwayck.org.

Amber Coulter can be reached at (270) 505-1746 or acoulter@thenewsenterprise.com.