Between 45 and 50 percent of Newark residents are underbanked or have no bank account.
“Either because they’ve never had a bank account, or they don’t trust the bank to keep their money,” said Catherine Wilson, President of United Way of Essex and West Hudson. She says some residents have been boxed out of opening a bank account.
“Because they’ve had an issue with a bank in the past and they might owe a bank some money,” Wilson said. “They end up having to use check cashing centers which takes a percentage of their paycheck. So, they’re not even able to get all of their money that they’ve earned right off of the bat. Unfortunately, that’s sort of the norm for a lot of our residents. We’re just trying to make sure that they have access to the bank account.”
Newark is one of many cities part of Bank On, a national program funded by the Cities for Financial Empowerment Fund. The initiative is designed to help residents obtain free or low-cost bank accounts, while teaching financial literacy.
“It’s just beneficial all around the board. You can’t buy a home if you don’t have banking information, years of history of banking information, you can’t buy a home. This keeps a lot of our residents in the quagmire of poverty,” said Yusef Ismail, Director of Programs at United Way of Essex and West Hudson.
The Bank On Newark initiative isn’t only targeting adults, says Aisha Glover, President of the Newark Alliance, a non-profit dedicated to revitalizing the city.
“Terribly important to get young people banked in the city. The earlier the better. If you think about the legislation that recently passed at the state level, the fact that they are targeting financial literacy in middle school should pretty much tell you everything you need to know. And some programs are starting even much younger.”
Some of Bank On Newark’s partners include Wells Fargo, Chase, Citi, Bank of America, and Capital One.