The Austin community is the site of a new initiative to help residents keep more of their tax refund dollars in their pockets this tax season.
The Monroe Foundation, a financial literacy organization, has collaborated with PNC Bank and Guaranty Bank to host Second Chance Bank Day this Saturday at the 15th District Police headquarters.
The financial literacy event features seminars and a chance to receive matching funds for individuals who open a bank account by Feb. 1. Customers who open an account with $15 will receive a $10 match deposit. Accounts must be opened either at PNC’s Homan and Roosevelt branch or Guaranty’s Forest Park location inside Ultra Foods, 7520 Roosevelt. The first 50 attendees at Saturday’s event are eligible for the offer.
In the last four years, nearly 500 people opened bank accounts through the Second Chance Bank Day. Changing the mindset of people to forgo currency exchanges for more traditional banking options is the event’s goal, said Otis Monroe III, the foundation’s CEO.
Local currency exchanges are people’s go-to place for cashing checks, Monroe added.
He noted that when low-income people get a $1,200 refund check, the first thing they do is cash it and spend the money. That, he added, does not build financial capacity or strengthen economic security.
“If we give an alternative thought in the community to save versus spend, we think that we will have a better response versus saying ‘Come and open a bank account,'” Monroe said. “We really want to target those who are geared more to going to the currency exchange and cash their checks.”
Saturday’s event features seminars on account management to avoid fees, building wealth through bank services like CDs, and using technology correctly, such as online and mobile banking. Second Chance Bank Day is part of the foundation’s Financial Literacy Equals Deposits, or FLED, program, aimed at putting 1,000 families into banking relationships.
“All the financial management tools that middle-income families have used, we want to teach and show low-income household — individuals, families — how to do the same thing,” Monroe said.
Financial education is very important added Paul Labonne, vice president and community reinvestment officer for PNC Bank, which has partnered with the Monroe Foundation since 2009.
He said individuals must understand money management and budgeting, “so they can be good stewards of their money.” Currency exchange fees, he noted, chip away at hard working families’ income when they are living paycheck to paycheck.
“Every penny adds up. Every nickel and dollar adds up,” Labonne said. “You can’t save for a child’s education, if every week you are going to currency exchanges to cash your check and getting ripped off just to cash a $100 check.”
Rev. Anibal Vega went through the program in 2010 after using currency exchanges for five years. Vega, who now operates a South Side nonprofit in the Auburn-Gresham neighborhood, said bad money management in college lead to delinquent bank accounts that he couldn’t overcome.
Growing up like most low-income people, Vega recalls not being taught how to save money and to invest.
“When your mom says save your money, you’re like, ‘Save it where?’ when you are living paycheck to pay check,” said Vega, executive director of the Center for Community Development Initiative — the nonprofit is a part of FLED.