279 Case Studies 

Case Studies 

In addition to administering and reporting results from the Survey of Banks’ Efforts to Serve the 

Unbanked and Underbanked, Dove Consulting also developed 16 Case Studies. The purpose of the 

case studies is to highlight a variety of successful strategies that banks have developed to bring 

unbanked and underbanked individuals into the conventional banking system. These case studies 

permit deeper analysis of the different business models used to serve these households and provide 

insight into the experiences of a range of commercial banking and savings institutions that offer 

innovative approaches to serving unbanked and underbanked individuals. 

This chapter provides information about the process used to select case study banks, summary 

tables to highlight basic characteristics of the banks, and three- to five-page descriptions which detail 

each bank’s situation, target population, innovative approaches, and lessons learned. Although case 

study banks employ a variety of approaches, they are categorized in this chapter by three primary 

strategies: 

 Financial Education and Outreach 

 Obstacles and Access 

 Targeted Products and Services 

These case studies are based on information gathered from survey responses, secondary research, 

and most importantly, in-depth interviews with bank managers to more fully understand how these 

banks have developed and implemented innovative and successful strategies to serve the unbanked 

and underbanked population. 

Case Study Methodology 

In order to capture a broad range of innovative and successful bank strategies for serving the 

unbanked and underbanked, Dove Consulting and the FDIC teams worked collaboratively to 

compile a list of prospective case study candidates. Candidates were required to pass both “good 

standing” criteria with compliance and provide a balance across geographic area and bank size. 

Selection Process 

A limited number of case studies were developed to provide information about specific strategies 

that some financial institutions have implemented to expand their customer base and serve 

underbanked consumers. Case study banks were selected on the basis of a variety of different types 

of information, including industry research and bank survey questionnaire responses. The final 

selection of banks reflects a variety of strategies to serve the unbanked as well as types of FDICinsured institutions. 

Chapter 

12
 280 Case Studies 

The banks chosen for case studies were selected in a two-stage process. The first set of potential 

case study banks were identified by the FDIC based on industry research prior to survey 

administration. These banks were reviewed against certain good standing criteria which included 

regulatory ratings of 1 or 2 for compliance, Community Reinvestment Act (CRA), and composite 

safety and soundness. 

The second set of potential case study banks was identified by Dove Consulting based on Dove’s 

confidential review of banks’ survey responses. Banks that revealed innovative and successful 

strategies to converting unbanked and underbanked individuals into the conventional banking 

mainstream in their survey responses and that met the FDIC good standing criteria were added to 

the potential case study bank list. 

Selection Criteria 

Approval of proposed case study candidates was based on fulfillment of two criteria. 

 Good Standing Criteria: Compliance screenings were conducted by the FDIC team. The 

FDIC evaluated case study candidates based on good standing criteria, including Compliance 

Rating, Composite CRA Rating, and Soundness Rating of either 1 or 2 as of Q1 2008. 

 Diversity of Example Criteria: Candidates proposed for the case study during the presurvey selection phase were screened on their innovative approaches and strategies applied to 

serving the unbanked and underbanked. In addition, candidates selected on the basis of survey 

responses were screened on the diversity of market served, geography, and size and type of 

institution. The following tables detail each diversity factor considered and the distribution of 

these factors across the 16 case study banks interviewed. 

Invitation Process 

Potential case study banks were invited to voluntarily participate by Dove Consulting. Dove 

contacted each potential bank by mail, seeking to obtain agreement to participate from a senior 

manager in each targeted organization. Banks that consented to be case study candidates were asked 

to complete the survey questionnaire and were interviewed at least once by Dove Consulting. Draft 

case studies were submitted to participating banks for their approval and consent. 

Interview Process 

Once a bank agreed to participate as a case study, Dove Consulting scheduled an interview with the 

bank’s managers and subsequently conducted an interview. Dove Consulting conducted most 

interviews via telephone and conducted two in person. The interviews were based on the bank’s 

survey responses and gathered relevant background information about the bank’s strategy, including 

target population, initiatives, and lessons learned. Development of case study drafts followed a 

common template. After an internal review process, drafts were submitted to the participating banks 

for their approval and consent. 
 281 Case Studies 

Distribution of Case Study Banks 

Collectively, case study banks cover a variety of strategies for serving the unbanked and 

underbanked that reflect the unique needs of their markets. The table below highlights the variety of 

initiatives described in each case study. 

CS. Figure 1. Strategy 

Education and Outreach Obstacles and Access 

Products 

and Services 

 Education Program  Non-Profit/Community  Partnership  Government Agency  Partnership  School Partnership  Employer Partnership  Branch Configuration  Bilingual Staff  Technology  Identification  Location  Extended Hours  Transaction Products  Credit Products  Asset-Building  Products 

Amalgamated Bank X X X X 

Artisans Bank X X X X X X 

Bancorp South X X X X X X 

Bangor Savings Bank X X X X X X 

Carver State Bank X X X X X X 

Central Bank of Kansas City X X X X 

Citibank X X X X 

Citizens Union Bank of Shelbyville X X X X X X X X X X 

The Commerce Bank of Washington X X 

Fort Morgan State Bank X X X X X 

International Bank of Commerce X X X X X X X X X 

KeyBank X X X X X 

Mitchell Bank X X X X X X X 

Monroe Bank and Trust X X X 

Ridgewood Savings Bank X X X X X X X X 

Second Federal Savings of Chicago X X X X X X X 
 282 Case Studies 

Financial institutions selected for inclusion as case studies also demonstrate diversity in their target 

market, asset size, and institution type. By highlighting variations in institutional characteristics, the 

case studies demonstrate how different types of banks approach common challenges in serving the 

unbanked and underbanked. 

CS. Figure 2. Institutional Characteristics 

Target 

Market Asset Size Institution Type 

 

Immigrant/ Minority NonImmigrant Tier 1 Tier 2 Tier 3 National Regional Community 

Amalgamated Bank X X X X 

Artisans Bank X X X 

Bancorp South X X X X 

Bangor Savings Bank X X X 

Carver State Bank X X X X 

Central Bank of Kansas City X X X 

Citibank X X X X 

Citizens Union Bank of Shelbyville X X X X 

The Commerce Bank of Washington X X X 

Fort Morgan State Bank X X X X 

International Bank of Commerce X X X 

KeyBank X X X X 

Mitchell Bank X X X 

Monroe Bank and Trust X X X 

Ridgewood Savings Bank X X X X 

Second Federal Savings of Chicago X X X 
 283 Case Studies 

Case study candidates were also evaluated on geographical diversity to ensure representation from 

each regional division and to compile a complete perspective of banks’ challenges and approaches in 

a variety of markets. The following table details the distribution of the 16 case study banks across 

the country. 

CS. Figure 3. Geography 

 

New England Mid-Atlantic South Atlantic East South Central West South Central East North Central West North Central Mountain Pacific 

Amalgamated Bank X 

Artisans Bank X 

Bancorp South X 

Bangor Savings Bank X 

Carver State Bank X 

Central Bank of Kansas City X 

Citibank X 

Citizens Union Bank of Shelbyville X 

The Commerce Bank of Washington X 

Fort Morgan State Bank X 

International Bank of Commerce X 

KeyBank X X 

Mitchell Bank X 

Monroe Bank and Trust X 

Ridgewood Savings Bank X 

Second Federal Savings of Chicago X 
 284 Case Studies 
 285 Case Studies 

Banks’ Efforts with Education and Outreach 

Objective 1 – Chapter 4

Education and Outreach 

Objective 2 – Chapters 5-7

Obstacles and Access 

Objective 3 – Chapters 8-11

Products and Services 

Identify and quantify the extent to 

which insured depository 

institutions outreach, serve, and 

meet the banking needs of the 

unbanked and underbanked. 

Identify challenges affecting 

the ability of insured 

depository institutions to 

serve the unbanked and 

underbanked, including but 

not limited to cultural, 

language, identification 

issues, and spatial/location 

issues. 

Identify innovative efforts 

depository institutions use to 

serve the un/underbanked, 

including small dollar loans, 

basic banking accounts, 

remittances, and other lowcost accounts, products and 

services used by the 

un/underbanked. 

• Retail Branch Information 

• Services Provided to NonCustomers 

• Account Opening & 

Onboarding 

• Deposit Products 

• Savings Accounts 

• Payment Products 

• Credit Products 

Case Study 

Examples 

Case Study 

Examples 

Case Study 

Examples 
 286 Case Studies 

Education and Outreach 

The seven case studies featured in this section highlight a variety of effective approaches that 

leverage partnerships with third-party organizations, such as employers, schools, nonprofit 

organizations, and assistance agencies. 

Institution Target Population Initiative 

Amalgamated Bank 

(New York, NY) 

Union workers, primarily 

immigrant and low income 

Created educational curriculum specific to needs of target 

market; partners with union and local government agencies 

to deliver outreach and products 

Citibank, NA 

(New York, NY) 

Low-income, urban individuals 

in their area 

Leverages United Way case management and outreach 

expertise in area to market, educate, and open entry-level 

accounts for clients 

The Commerce Bank 

 of Washington 

(Seattle, WA) 

Homeless population, mentally 

ill individuals 

Automated check cashing processes and improved access 

to banking services for “unbankable” individuals by 

providing back-office systems and support to The 

Compass Center, a nonprofit assistance agency 

Fort Morgan State Bank 

(Fort Morgan, CO) 

Employees of food processing 

company in Colorado 

Established branch at plant facility, introduced services 

during new employee orientation, and opened accounts to 

encourage direct deposit of paychecks 

International Bank 

 of Commerce 

(Laredo, TX) 

Elementary school students in 

predominantly Mexican 

immigrant communities in their 

areas 

Partners with elementary schools to create student-run 

“micro-communities,” simulated societies in which 

students earn wages in mock currency, conduct banking 

transactions, and learn to manage finances 

Mitchell Bank 

(Milwaukee, WI) 

High school students in large 

Mexican and Central American 

immigrant communities in their 

areas 

Partners with a local high school to establish full-service 

branch on campus to open accounts for students, provide 

financial literacy education, and build trust and awareness 

in wider community 

Monroe Bank and Trust 

(Monroe, MI) 

Low- to moderate-income 

individuals in the bank’s county, 

many of whom are affected by 

rising unemployment 

Established education program, an off-shoot of its existing 

volunteer organization, to provide educational outreach in 

its markets by bringing seminars and programs to faithbased organizations, service agencies, and high schools 

Common Lessons Learned 

 Financial education is the primary vehicle for serving the unbanked and underbanked populations and is essential to 

helping them make informed decisions. 

 Employers and community organizations can provide important insights to banks seeking to assess and understand the 

needs of the unbanked market. 

 Partnerships with third-party organizations that leverage core competencies can supplement and complement bank 

initiatives to provide outreach and serve the community. 

 Building strong relationships with trusted community organizations presents valuable opportunities for banks to 

establish their presence and increase awareness in their service areas, which are particularly important when working 

with unbanked populations. 

 Developing and executing a successful strategy requires innovative approaches that involve stakeholders both within 

and outside of the bank. 
 287 Case Studies 

Amalgamated Bank 

Amalgamated Bank relies on strategic partnerships with community organizations and government 

agencies to tailor and deliver educational outreach and banking services to different unbanked 

populations in its service areas. In addition to creating a comprehensive financial literacy curriculum, 

the bank also developed a specialized package of banking services for its union members, other 

working class individuals, and recent immigrants. The bank continues to evolve its offerings and 

approaches according to the needs of each community. 

“From our perspective, serving the unbanked segment is a challenge that we take seriously, and we are still testing and refining 

different approaches. Nevertheless, financial education is a strong component of the overall value we strive to deliver.” 

Keith Pilkington, EVP and Chief Marketing Officer 

Peter Mosbacher, CRA Officer, Head of Community Development and SVP 

I. Target Population 

As the nation’s only union-owned bank, Amalgamated Bank tailors and targets its products and 

services to members of UNITE HERE (formed from the merger of the Union of Needletrades, 

Industrial and Textile Employees and Hotel Employees and Restaurant Employees International 

Union), other working class individuals, and recent immigrants. UNITE HERE represents more 

than 450,000 active members and more than 400,000 retirees throughout North America. Its 

membership is composed largely of immigrant workers and includes a high proportion of African 

Americans, Hispanic Americans, and Asian Americans. 

The bank primarily serves working class residents and small businesses in New York City, and many 

low- and moderate-income families. Since early 2007, Amalgamated Bank has operated four 

branches in neighborhoods identified as Banking Development Districts (BDD) by the New York 

State Banking Department. These communities are typically underserved by the banking industry 

and dominated by alternative service providers, such as check cashers. The bank has also begun 

expanding outside of New York City to reach union members outside of its primary branch 

footprint. As of September 2008, the bank operates three supermarket-based branches in Las Vegas 

to serve the large population of culinary union members in that market area, as well as one branch in 

each of the following markets: Pasadena, CA; Lyndhurst, NJ; and Washington, D.C. 

II. Initiatives 

Amalgamated Bank sees financial education as an integral part of its approach to serving unbanked 

individuals. Education provides consumers with the necessary tools to understand how the banking 

system works, and to manage accounts responsibly and comprehensively. In addition, it also helps 

the bank ensure that it opens accounts for customers who have the requisite knowledge to handle 

banking products and reduce the risk of loss due to mismanagement. 
 288 Case Studies 

Money Sense 

In the summer of 2006, the bank introduced Money Sense, an in-house branded financial education 

program developed in partnership with LaGuardia Community College. The college not only 

contributed to the creation of the Money Sense curriculum but also trains bank employees to 

conduct sessions and effectively deliver information. Presented in four modules lasting 90 minutes 

each, the Money Sense curriculum covers basic banking, credit, savings, and home ownership. 

Upon successful completion of the program, the bank offers a small cash bonus toward a new nofee, no minimum balance checking account. While potential customers must still undergo the 

normal account approval and opening process, the bank believes that the bonus provides additional 

incentive for opening an account at Amalgamated Bank. 

The bank typically offers the program in four concurrent sessions on Saturday from 9:30 a.m. to 

3:30 p.m. and provides free lunches as an additional accommodation. Branches also have the option 

of offering morning or evening sessions, depending on what branch personnel deem to be most 

feasible and useful. All branches conduct Money Sense financial education, with an average of two 

to three programs offered by each branch annually. 

To optimize the impact and effectiveness of Money Sense, Amalgamated Bank advises its branch 

employees to conduct education sessions only after establishing strong partnerships with third-party 

community organizations. These partnerships can involve faith-based organizations, local 

development corporations, and other nonprofit organizations. The bank often holds its education 

sessions at the organization’s site to encourage participation in the program. Community partners 

also help by sending marketing materials to its client base to raise awareness of upcoming Money 

Sense seminars and other bank-related events. By leveraging community partnerships, the bank has 

been able to attract between 30 and 50 individuals to each session. 

For residents in the bank’s Las Vegas service area, educational sessions have been particularly 

valuable. Led by a full-time community development officer, Amalgamated Bank launched a Home 

Ownership and Empowerment Center in 2007 to assist the approximately 60,000 union members 

and working class customers residing in the Las Vegas area. Financial education programs offer the 

four Money Sense modules in addition to a session focused specifically on foreclosure prevention. 

Clark County, in which Las Vegas is located, has faced some of the highest home foreclosure rates 

in the country, deeply affecting union members and low-income families. In response to these major 

issues and the immense need for education on foreclosures, the seminars provide individuals with an 

overview of the situation, help them determine what stage of the process they are in—delinquency, 

verge of delinquency, or beginning of foreclosure proceedings—and inform them of available 

options for their situation. The bank also invites local credit counseling and housing agencies to 

provide additional insight during the seminars. Given the impact of home foreclosures in the Las 

Vegas area, the sessions have been well-attended by local residents seeking assistance and 

information. In the past year, Amalgamated Bank has conducted eight foreclosure seminars, 

attracting 50 to 75 attendees to each session. 

Local Partnerships 

The bank partners with a wide range of local community agencies and organizations to provide 

additional financial education opportunities to unbanked populations. 
 289 Case Studies 

In collaboration with the East River Development Alliance (ERDA), Amalgamated Bank has 

augmented the alliance’s existing Wealth Building Academy with financial education programs that 

help unbanked individuals feel comfortable and welcome in bank branches. The objective is to 

mitigate fears or misperceptions about banks as a first step to ease the unbanked into the financial 

mainstream. Through this partnership, the bank also promotes the academy’s education program to 

low-income residents in public housing projects and delivers Money Sense seminars through the 

auspices of ERDA. 

The bank currently participates in two pilot programs offered through the New York City 

Department of Consumer Affairs’ Office of Financial Empowerment (OFE). In spring 2007, the 

bank joined the Opportunity NYC program, the nation’s first conditional cash transfer program, in 

an effort to encourage account opening and enable individuals and families on public assistance to 

receive and safely access payments through direct deposit.8 Amalgamated Bank and seven other local 

banks and credit unions offer Opportunity NYC savings accounts, an entry-level account with no 

minimum opening balance, no monthly service fees, and a $50 bonus upon opening. In another joint 

effort with the OFE, Amalgamated Bank offers the Save NYC Club Account for residents 

receiving Earned Income Tax Credit (EITC). This interest-bearing account offers a 0.5 percent rate 

and a city-funded 50 percent match of initial deposits up to $250 to help low- to moderate-income 

families build savings. To qualify for the account and for the match, customers must save at least 

$100 for up to one year. When the pilot program first began in the 2008 tax season, Amalgamated 

Bank succeeded in opening 20 Save NYC Club Accounts. Based on this initial success, the bank 

plans to expand the program during the 2009 tax season. 

In October 2008, Amalgamated Bank will launch a pilot program for rent payments in partnership 

with the New York City Housing Authority. Unbanked residents often pay their rent by cashing 

checks at alternative service providers and incurring high fees to purchase money orders and make 

payments. To reduce service fees and make the process more affordable for residents, Amalgamated 

Bank and two other New York City-based financial institutions signed an agreement with New York 

City Housing Authority to accept rent payments in cash for a smaller fee at branch locations, 

process the payments for remote capture, and transfer the payments to New York City Housing 

Authority. To facilitate the process, New York City Housing Authority has provided the bank with 

two scanners. The bank will introduce the pilot program at its Long Island City BDD branch, and if 

successful, the bank will expand the program to additional branches in 2009. 

 

8 Conditional cash transfer (CCT) programs are designed to alleviate poverty in the short-term by providing additional income to poor families, and to 

break the intergenerational cycle of poverty in the long-term by promoting greater investments in human capital.
 290 Case Studies 

Union Outreach and Group Advantage Banking 

In an effort to serve its core customer base, Amalgamated Bank provides specific banking services 

that address the needs of union members. During outreach sessions, the bank combines education 

with financial incentives for establishing customer relationships. Amalgamated Bank tailors 

education classes to its audience of union members in a particular industry and delivers seminars at 

the workplace to improve convenience and accessibility. In addition, outreach visits serve as an 

opportunity to inform them about the Group Advantage Banking, a package of services specially 

priced and specifically packaged for union members with direct deposit. Group Advantage Banking 

offers benefits not available to the general public, including a free checking account with a $50 

bonus for direct deposit, free savings account with a $25 bonus for establishing automatic savings 

deductions from an Amalgamated checking account, unlimited check writing, free first order of 50 

checks, higher relationship rates on qualified savings accounts, and preferred rates on loan products. 

In its Las Vegas market area, Amalgamated Bank plans to launch a payroll card product in October 

2008. As hotels, casinos, and other major employers begin moving toward mandatory direct deposit 

of paychecks, UNITE HERE has expressed strong interest in the bank offering a payroll card 

product because it will provide workers with an alternative to deposit accounts while meeting direct 

deposit requirements. The bank developed the product in close communication with the union, 

informing union leadership of associated fees and pricing structure and providing them with 

opportunities to review and provide input for refining the product. In an effort to provide 

competitive and favorable pricing for union members, the bank also deployed an ATM at the 

UNITE HERE headquarters, where payroll card customers pay a reduced surcharge of 50 percent 

below market rates to withdraw funds. This enables workers to avoid using alternative service 

providers to cash paychecks without having to manage conventional deposit accounts. The product 

will serve as an entry point for transitioning unbanked union members into deposit account 

customers and the economic mainstream. 

III. Lessons Learned 

 Banks cannot effectively reach out to unbanked individuals without the support of a 

strategic nonprofit or government partner. Identifying, addressing, and serving this segment 

poses a daunting task for banks that choose to work independently. Community partnerships 

can provide critical assistance by helping banks navigate this complex and dynamic population. 

 Strong community partners are well-respected, fiscally sound, and have a solid 

reputation in the community. They must also recognize and understand the bank’s business 

needs and obligations. Community partnerships exhibiting these characteristics and founded on 

mutual understanding provide a strong platform for developing and delivering joint efforts to 

serve the unbanked and underbanked. 

 Providing education to unbanked individuals provides mutual benefit for consumers and 

institutions. Financial literacy training and banking education equip unbanked individuals with 

the knowledge to responsibly and comprehensively manage accounts and make informed 

financial decisions. Banks benefit from improved financial management practices, as it reduces 

risk and increases the number of customers and deposits. 
 291 Case Studies 

About Amalgamated Bank 

Amalgamated Bank, headquartered in New York, New York, was established in 1923. 

Originally chartered by the Amalgamated Clothing Workers of America Union (ACWA), 

the bank’s mission was to provide affordable banking services to working men and women. 

In 1995, the Amalgamated Clothing & Textile Workers Union and the International Ladies 

Garment Workers Union merged in order to form the Union of Needletrades, Industrial 

and Textile Employees (UNITE!). In 2004, UNITE! and the Hotel Employees and 

Restaurant Employees International Union (HERE) merged. The Bank is now owned by 

UNITE HERE. 

Currently, Amalgamated Bank operates out of 19 branches in New York, NY. The bank also 

maintains one branch in Lyndhurst, NJ; one branch in Pasadena, CA; one branch in Washington, 

D.C.; and three supermarket branches in Las Vegas, NV. The bank offers a variety of consumer and 

commercial credit and deposit products, as well as financial services. Available credit products 

include home equity loans, auto loans, personal loans and lines of credit, commercial mortgages, 

commercial loans and lines, as well as standby letters of credit. Examples of deposit account 

offerings include regular savings accounts, club accounts, checking accounts, money market 

accounts, CDs, and IRAs. Other provided services include direct deposit and safety deposit box 

rental, as well as the sale of travelers and gift checks, money orders, and United States Savings 

Bonds. The bank faces intense competition in its service areas from many large money-center 

institutions, national and regional banks, savings and loan associations, and mortgage brokers. 

Assets, $Th, as of September 30, 2008: $4,573,953 
 292 Case Studies 
 293 Case Studies 

Citibank, NA 

Citibank’s citizenship work in the United States focuses broadly on community revitalization and 

preservation, asset building, and financial education, particularly for unbanked and underbanked, 

and low- to moderate-income (LMI) individuals. To achieve these objectives, Citibank relies on 

partnerships with many local nonprofit and community organizations to deliver specialized services, 

education, and bank products to the people in these groups. Citibank also invests in market research 

to increase the banking industry’s understanding and awareness of unbanked and LMI populations 

and to inform and refine its strategies for serving these segments of the population. 

“Products and services do not make a difference if they’re not culturally relevant to the community you are serving.” 

 – Victor Ramirez, Citi Community Relations 

I. Target Population 

Citibank’s efforts through the Saving for the American Dream program focus on low-income, 

EITC-eligible residents of the Greater Los Angeles area, many of whom are unbanked. IDA 

participants can be EITC-eligible or earn less than 200 percent of the Federal Poverty guidelines, 

delineated by the Department of Health and Human Services (DHHS). In Los Angeles, that 

translates to approximately 60 percent to 80 percent of the area median income. Citibank makes 

appropriate products available to people in this group and works to facilitate their access to these 

products. For example, Citibank opens accounts at VITA sites, including community and 

neighborhood centers, libraries, schools, shopping malls, and other convenient locations. (VITA is 

the IRS’s Volunteer Income Tax Assistance Program for low-income, elderly, disabled, and limited 

English-speaking individuals.) 

As of August 30, 2008, Citibank had 463 IDA accounts in the Greater Los Angeles area that had 

been opened through the Saving for the American Dream program, as well as 77 Ramp Up 

Accounts. Citibank also offers the IDA program in other markets across the country. Nationally in 

2007, Citibank maintained over 50 separate IDA programs with about 4,000 IDA accounts active in 

its branches, exceeding $3 million. 

II. Initiatives 

One of Citibank’s primary partnerships in Los Angeles is with the United Way of Greater Los 

Angeles (UWGLA) in its Saving for the American Dream asset-building program. Saving for the 

American Dream promotes the Individual Development Account (IDA) to low-income working 

families that include unbanked recipients of the Earned Income Tax Credit (EITC), the refundable 

federal income tax credit for low-income working individuals and families. The IDA is a savings 

account, incentivized with matching funds provided by a variety of government and private sector 

sources, for “working poor” families who are building toward a specific asset goal, such as a home. 

IDA account holders also are offered financial education through the Saving for the American 

Dream program. This helps them understand the benefits of a mainstream savings account and 

teaches skills for responsible money management. 
 294 Case Studies 

Initial Efforts 

Citibank committed to participating in and raising awareness about the EITC and VITA programs in 

Los Angeles. Citi employees participate through VITA volunteer tax assistance and encourage EITC 

recipients to engage in mainstream banking by opening free checking accounts and direct-depositing 

their tax refunds. 

Initially, the bank’s strategy was to make its branch employees available to open accounts at VITA 

sites and to offer a $20 to $25 incentive for new deposit customers. However, Citibank employees 

faced difficulties in attracting interest and describe being hampered by the identification and due 

diligence process required for account opening. In 2005, Citibank’s first year working with 

EITC/VITA in Los Angeles, the bank opened only ten accounts. Further, these new customers 

withdrew all funds from their accounts soon after opening, resulting in account closure due to lack 

of use and insufficient deposit balance. 

Consequently, Citibank developed an approach that would more effectively promote the saving of 

EITC funds and the development of long-term banking relationships with recipients. This approach 

would be based on partnerships with established, local nonprofit organizations. 

Community Partnerships 

Citibank tapped into the resources of its primary partner in Los Angeles, the UWGLA, and their 

asset-building partnership collaborative. This partnership allows for a division of tasks that 

capitalizes on each partner’s respective strengths. UWGLA’s partners have substantial experience in 

case management and outreach work and, once trained about banking products, can comfortably 

present information and provide guidance to clients. For its part, Citibank takes responsibility for 

program management and provides educational materials and training to UWGLA staff and 

partners. 

Additionally, UWGLA—as a well-established and reputable community organization—can 

independently raise matching funds for IDAs. 

The benefits of Citibank’s partnership with UWGLA, and with third-party community organizations 

in general, go beyond process efficiency. The diverse demographics of Los Angeles County allowed 

the Los Angeles EITC Campaign Partnership to expand outreach to various ethnic communities 

through their partners, including the Chinese, Hispanic, Filipino, Armenian, and Korean 

communities. The local partner can help Citibank mitigate language and cultural barriers. Its staff 

can translate banking information and can build trust with immigrant clients. This helps Citibank 

establish a strong local community connection and deliver services and programs tailored to the 

needs and preferences of the local market segments. 

Citibank’s IDA-based asset-building initiative in the Greater Los Angeles area, which began in the 

1990s, is county-wide. The large-scale program is delivered through 19 local nonprofit organizations, 

with UWGLA serving as the lead coordinating agency of the program. UWGLA provides the 

participating nonprofits with training, capacity building, data collection, and account management 

for the program. Citibank offers financial support in the form of grants from Citi and the Citi 

Foundation, technical assistance, and overall program management. 
 295 Case Studies 

Challenges of the IDA Program 

In the past five years, Citibank identified new challenges facing program participants and the bank. 

For instance, participants in this federally funded IDA program were permitted to use accrued funds 

only toward the purchase of new homes, small businesses, and/or post-secondary education. While 

many participants initially planned to use the IDA to fund a home purchase, currently there are few 

affordable housing options in the Los Angeles area. After years of making regular deposits and 

participating in financial education courses, participants finally reached their savings goals only to 

find that the “qualified asset” they had in mind—a home—was unavailable to them due to a lack of 

affordable housing on the one hand and insufficient capital or credit on the other. Beyond the 

immediate setback this situation created, the concern to Citibank was that the clients’ 

discouragement would negatively affect their relationship with and perception of financial 

institutions in the future. 

Saving for the American Dream also incurred high administrative costs. Citibank reports that the 

annual costs for case management, tracking and recording of participants’ savings, and conducting 

education classes average $1,400 per account. 

To mitigate participants’ frustration and the program’s high overhead, Citibank helped developed a 

new kind of account, the Ramp Up Accelerated Savings Account. 

Ramp Up Accelerated Savings Accounts 

Ramp Up Accelerated Savings Accounts were introduced in the Greater Los Angeles area for the 

first time in May 2007. The savings account offers both a subsidized annual interest rate of up to 21 

percent on initial deposits and monthly contributions to the Ramp Up accounts as incentives for 

LMI individuals to save money. The Ramp Up account has a 15-month period, at the conclusion of 

which the account holders are encouraged to transfer their savings into an investment account, 

typically an IDA. Ramp Up accounts, as compared with the IDA, permit a greater range of asset 

types to be acquired from the accrued funds. In addition, the Ramp Up program, with average 

overhead of $300 per account, is more cost-effective than the IDA program. 

Case managers and tax preparers working under the auspices of Citibank’s nonprofit community 

partners promote Ramp Up Accounts to unbanked, EITC-eligible individuals at VITA sites. These 

workers can open accounts through Citi’s business banking online system using the CitiEscrow 

product. The direct deposit account information is then immediately entered on the participant’s tax 

forms so that, as a result of this streamlining and integration, the tax refunds can be sent directly to 

the new account. 

Ramp Up Accounts are a kind of “trustee account,” to be implemented in a nonprofit setting. The 

case managers serve as agents of Citibank and collect all identification and other necessary 

documentation (including representative payee forms and W9s), so the identification and verification 

process for account opening is streamlined and expedited. In addition, since the product is not a 

checking account, ChexSystems (a check verification service and consumer credit reporting agency 

for deposit accounts) is not consulted and any negative history on the ChexSystems database is not 

an impediment, as it was in earlier initiatives to open free checking accounts for unbanked 

individuals. 
 296 Case Studies 

Through the 2007 and 2008 tax seasons, Citibank opened a total of 77 Ramp Up accounts in the 

Los Angeles area. As of August 2008, the bank has 57 active Ramp Up Accounts in Greater Los 

Angeles amounting to $64,350 in cumulative deposits. Since introducing Ramp Up Accounts, 

Citibank has observed that participating account holders save more consistently and are less likely to 

withdraw all of their money after receiving their tax refunds. During the summer of 2007, the bank 

opened 42 accounts, with an average of $600 saved per account after the first 180 days and with 80 

percent of participants making regular monthly deposits. Because most Ramp Up participants are 

co-enrolled in an IDA program, they also receive that program’s financial literacy training. 

Citibank plans to survey Ramp Up accountholders as well as IDA account holders to determine 

asset-building and purchasing trends under the program. Anecdotally, bank employees and 

community organization staff observe that many EITC recipients spend their refund, which averages 

$4,000 to $5,000, on basic necessities such as food, clothing, and medical expenses. 

Market Research 

Citibank invests in market research to assess and refine its strategies for serving the unbanked and 

underbanked. For instance, the bank supported the Center for Financial Services Innovation’s 

(CFSI) Underbanked Consumer Study, which was the first comprehensive national segmentation 

study of the underbanked market. With a cohort of 2,800 unbanked and underbanked adults, the 

study revealed detailed behavior profiles that outline market size, current use of financial products 

and services, interest in financial products, preferred marketing and communication approaches, and 

desired financial experience. 

Citibank also supported the development of a research tool that goes beyond Census data to 

develop a picture of a community’s economic activity. This was accomplished through the services 

and tools developed by Social Compact, a nonprofit organization. The tool measures economic 

opportunity and investment incentive by looking at data from supermarkets and utility bills. This 

study helps identify effective approaches to bringing unbanked individuals into the economic 

mainstream. 

Future Initiatives 

Following their successful efforts on behalf of the unbanked and underbanked in the Los Angeles 

area, Citibank and UWGLA are exploring other markets in which to establish similar programs. 

Citibank also has begun working with other financial institutions nationwide, to share insights and 

best practices related to serving the unbanked and underbanked. 
 297 Case Studies 

III. Lessons Learned 

 Banks can rely on partners to deliver connections to the community by virtue of their 

local experience, subject matter expertise, staff resources, and fundraising capability. 

Leveraging strategic long-term partnerships with strong community organizations has been 

integral to the success of Citibank’s asset-building initiatives. 

 Honing the knowledge of regional and local markets guides the development and 

implementation of products and services that meet the needs of each market area. 

Offerings are only valuable if they address the specific needs of a target population. 

 Flexibility and a willingness to innovate help overcome the obstacles to serve 

traditionally unbanked communities. Tailoring products and services to lower-income 

communities ensures that their unique needs and preferences will be met. Identifying and 

addressing these nuances play an important role in a bank’s success in serving people in this 

population segment. 

About Citibank, NA 

Found in more than 100 countries, Citibank delivers a wide array of banking, lending and 

investment services to individual consumers, as well as to small businesses with up to $10 million in 

annual sales. Citibank also offers a full range of financial services products to serve the needs of 

small and large corporations, governments, and institutional and individual investors. The Financial 

Center Network is composed of local offices and complemented by electronic delivery systems, 

including ATMs and the Internet. 

Specific products and services include basic banking accounts, investment services through Citicorp 

Investment Services, life insurance, telephone banking, and accounts which integrate banking, 

borrowing, and investing services. Client Financial Analysts are available in branches and trained to 

use Citibank’s financial needs analysis tools that enable bank staff to recommend tailored solutions 

for every customer. 

Assets, $Th, as of September 30, 2008: $1,207,007,000 
 298 Case Studies 
 299 Case Studies 

The Commerce Bank of Washington 

The Commerce Bank of Washington transformed and modernized banking services offered by The 

Compass Center (TCC), a nonprofit homeless service provider. The Commerce Bank of 

Washington provides funding, technical assistance, and banking processing services for TCC for 

homeless clientele and individuals with permanent disabilities in Seattle. Clients also benefit from 

financial education and counseling resources, which can also help them move into the economic 

mainstream. 

“We thought outside-the-box and got everyone involved—from service providers to non-profit organizations to 

regulators.” – Ron Lynch, Chief Operating Officer 

I. Target Population 

The Compass Center (TCC) is a multi-service agency that assists homeless individuals in Seattle, 

with an estimated population of 8,000 individuals. Most TCC clients earn less than 30 percent of the 

service area’s median income and need assistance in seeking or maintaining housing, as they do not 

have a physical address or location to receive a check. In addition, some of TCC’s clients have been 

deemed by the state as mentally ill or incapable of handling their own finances, however, they can 

benefit from deposit accounts to receive government benefits. Because homeless individuals 

primarily operate in a cash economy, TCC recognized that they were a financially vulnerable 

population within a predatory environment. While most nonprofit organizations provide 

representative-payee services, homeless clients, who are not only unbanked but often deemed 

“unbankable,” use check cashing agencies that charge high fees for their services. TCC addresses 

one of their critical financial needs by providing assistance in cashing disability, Social Security, 

veterans’ benefits, and other assistance payment checks for clients without bank accounts. 

II. Initiatives 

The Commerce Bank of Washington began working with TCC in 1999 when a number of bank 

employees expressed interest in volunteerism and organized a community service effort to repaint 

and clean the TCC’s facility. During their visit, bank employees noticed that TCC provides “quasibanking services” to Seattle’s homeless community. These services were arranged by case managers 

and social workers in response to clients’ needs. At the time, the U.S. Treasury Department 

announced that recipients of federal government benefit checks would be paid electronically unless 

they could submit documentation that explained why payments could not be received through 

electronic methods. This presented challenges to homeless and other disadvantaged individuals who 

did not qualify for bank accounts or did not feel comfortable with this payment method. 

Recognizing the community’s need and TCC’s concerns about this federal mandate, The Commerce 

Bank of Washington worked with local organizations and the Federal Reserve Board to develop a 

solution. They devised an approach that would allow The Commerce Bank of Washington to act as 

a conduit for TCC’s financial services. In establishing TCC Bank, The Commerce Bank of 

Washington would enable it to receive electronic payments from the government on behalf of 

homeless individuals and allow them to maintain accounts for their funds. TCC would have access 

to the banking system and platform, the Federal Reserve, and knowledgeable personnel without 

having to handle overhead costs and regulatory issues. 
 300 Case Studies 

The bank helped TCC set up their systems to allow customers to receive ACH9 payments through a 

second ABA Routing Transit Number10 for The Commerce Bank of Washington and assigned 

specifically to TCC, which would allow transactions to route through that number and post to 

individual accounts in the institution. The bank also gave TCC access to the necessary hardware 

platform and core banking software to enable it to efficiently manage accounts and provide banking 

services. By partitioning part of its mainframe, creating a separate cable and firewalled data network 

within the bank’s existing infrastructure, TCC could utilize The Commerce Bank of Washington’s 

core demand deposit account (DDA)11 banking system. With support from a second bank, The 

Commerce Bank of Washington equipped TCC with an automated cash dispensing unit purchased 

at wholesale from the manufacturer and maintained by services donated by an armored car 

company. Bank employees trained TCC staff to properly verify customers and checks, operate the 

machine, and open individual accounts for clients. 

While The Commerce Bank of Washington provides back-office systems and support, TCC staff 

and case workers perform the front-office functions, such as opening accounts, verifying 

identification, and cashing checks. New TCC clients must provide a form of identification when 

seeking banking services for the first time, and a photograph of the individual is placed in a book 

linking the individual to their account. Accounts offered to TCC clients are similar to passbook 

savings accounts in that clients can verify their balance and withdraw cash but are prohibited from 

writing checks. As part of its assistance services, TCC staff help clients determine account 

restrictions, which typically allow one withdrawal per day for a predetermined amount. Since most 

clients receive recurring government and benefit payments on a monthly basis, building parameters 

enables clients to spend their money incrementally and prevent impulsive withdrawals, with 

sufficient funds to subsist before receiving their next payment. While clients with extenuating 

circumstances, such as mental illness-related issues, emergencies, and other case management-related 

exceptions, are afforded flexibility at the discretion of TCC’s personnel, those who no longer wish to 

abide by these conditions can dissolve their account relationship with TCC at any time. To date, 

TCC has opened 1,600 accounts for its clients. 

Clients who do not have accounts either have experienced account closure, typically due to inability 

to maintain their account balance, or solely prefer to use check cashing services. Decisions on the 

types of checks accepted for check cashing services are made at the discretion of TCC staff. In 

general, government and payroll checks are commonly accepted and cashed for a fee of 2 percent 

for checks over $300. Although the bank acknowledges the inherent risks involved in check cashing 

operations, the bank cites that losses incurred from providing these services have been fewer than 

expected. 

From the bank’s perspective, partnering with TCC provided mutual benefits. TCC staff have deep 

understanding and knowledge of its client base and a strong foundation in case management, which 

creates a strong position from which TCC and the bank can jointly outreach and assist homeless 

 

9 The Automated Clearing House (ACH) Network is a nationwide batch-oriented electronic funds transfer system. ACH payments include: direct 

deposit of payroll, Social Security and other government benefits, and tax refunds; direct payment of consumer bills such as mortgages, loans, utility 

bills and insurance premiums; business-to-business payments; e-checks; e-commerce payments; and federal, state and local tax payments. 

10 The ABA Routing Transit Number (ABA/RTN) serves to identify the specific financial institution responsible for the payment of a negotiable 

instrument. Originally designed to identify only check processing endpoints, the ABA Routing Number has evolved to designate participants in 

automated clearinghouses, electronic funds transfer, and online banking. 

11 An account from which a depositor may withdraw funds immediately without prior notice, commonly known as a checking account 
 301 Case Studies 

individuals. Employees note that new clients often hear about TCC by word-of-mouth, which also 

reflects its impact on the community. On the other hand, The Commerce Bank of Washington’s 

capabilities as a financial institution provide valuable services to TCC’s clients, in addition to 

credibility and reputation for this community organization. The bank also cites its culture of 

community involvement and investment as important drivers for this initiative. The Commerce 

Bank of Washington and its employees dedicate time and effort to provide staff support, IT 

support, accounting and reporting, bank processing, data processing, and mainframe updates for 

TCC. In 2006, this amounted to $18,000 of hard cost to The Commerce Bank of Washington. 

Other service providers have also contributed to TCC, including donations from vendors of teller 

software, courier services, and armored car services. 

The bank believes that its work with TCC has been successful from both a social assistance and a 

community reinvestment perspective and continues to seek new and innovative ways to serve its 

local community. Currently, the bank is exploring the possibility of establishing a similar relationship 

with The Chief Seattle Club, which provides assistance for homeless and at-risk Native American 

individuals, and extending its work with TCC to serving the needs of this population. 

III. Lessons Learned 

 The bank’s partnership with TCC leveraged core competencies of each organization to 

create a more valuable approach to serving the unbanked community. Using the bank’s 

unutilized capacity core banking system and available software enabled the automation of TCC’s 

manual check cashing process, improving access and efficiency for unbankable individuals. 

Concurrently, TCC’s case workers support account opening and the identification and 

verification process, facilitating compliance with Know Your Customer regulations. 

 Banks can address common needs for banking services among homeless populations in 

every major city and market. The Commerce Bank of Washington met with a group of CRA 

officers, all of whom identified similar problems facing homeless individuals, who are often 

unable to open bank accounts and have no means for safe-keeping the funds they receive from 

benefit payments. Providing services for these individuals has a significant impact in serving the 

unbanked. 

 Developing and executing a successful strategy requires innovative approaches 

involving stakeholders both within and outside of the bank. Support from other nonprofit 

organizations and businesses enabled The Commerce Bank of Washington to equip TCC with a 

broad range of capabilities, which helped to improve the agency’s effectiveness and efficiency. 

Collaborating with regulators, such as the Federal Reserve Board, not only provided valuable 

insight but also credibility when exploring approaches that diverge from conventional methods 

of outreach and assistance to the unbanked and underbanked. 
 302 Case Studies 

About The Commerce Bank of Washington 

The Commerce Bank is the Washington banking subsidiary of Zion’s Bancorporation. The bank is a 

$900 million institution, operating out of a single office in downtown Seattle. Its single office 

organization is enhanced by a courier service which in effect gives it a “messenger service branch” 

wherever its customers have local offices, or needs. This concept was approved by the Office of the 

Comptroller of the Currency (OCC) in 1993. Since its opening on July 1, 1988, The Commerce Bank 

has maintained a primary market focus on locally owned businesses and their principals, in the 

greater Seattle, Bellevue, Mercer Island, and Kirkland metropolitan areas (and to a lesser extent the 

rest of King County). Primarily a commercial bank, relationship managers handle all sizes of 

businesses, bringing their experience and skills to bear on the business with less than $1 million in 

revenues as well as to one with $50 million. The bank’s relationship managers are senior 

professionals with an average of 25+ years experience in commercial lending. 

Assets, $Th, as of September 30, 2008: $846,491 
 303 Case Studies 

Fort Morgan State Bank 

Fort Morgan State Bank opened a branch at the Cargill Meat Solutions facility to provide banking 

services and education to its 2,000 employees, many of whom are unbanked and/or new 

immigrants. The bank tailors its workplace branch operations to specific needs and behaviors of the 

employees and provides a package of targeted products and services to serve this population and to 

compete with alternative service providers. 

“While we expected that challenges would arise, our approach to serving the unbanked was to remain flexible, 

accommodate the process, and learn.” - John Sneed, President and CEO 

I. Target Population 

For its workplace branch, Fort Morgan State Bank targets Cargill employees, many of whom are 

new immigrants lacking financial literacy and banking relationships. The bank reports that 

approximately 60 percent of Cargill’s employees are immigrants with high turnover rates, and there 

is a constant cycle of new employees of different nationalities and ethnicities, including 

Guatemalans, Puerto Ricans, and Somalians. The remaining 40 percent is composed of long-term 

employees, many of whom were customers of Fort Morgan State Bank prior to the opening of its 

Cargill branch. 

II. Initiatives 

Market Research 

In 2002, Fort Morgan State Bank began investigating ways to better serve unbanked individuals 

through a variety of research initiatives. The bank researched other banks’ approaches, successes, 

and failures by visiting a bank in Scotts Bluff, Nebraska that had opened a Hispanic-focused branch 

in its service area and consulting with banks that had established workplace branches in packing 

plants. In addition, the bank conducted a focus group to identify the needs of underbanked 

individuals in its service area and met with Hispanic community leaders to gain their perspective on 

what products and services banks should offer to the community. 

Research participants emphasized the importance of utilizing bilingual branch employees to 

encourage and assist unbanked immigrants in the bank’s service area by providing education about 

bank products and services. In response, the bank hired three bilingual employees and notes that 

this addition to its staff has resulted in a significant improvement in its ability to outreach and serve 

unbanked, immigrant individuals. Fort Morgan State Bank reports that while its research did not 

define a complete and clear strategy for effectively serving the unbanked and underbanked, it 

provided helpful insight and ideas for further consideration. 
 304 Case Studies 

Workplace Branch 

As the bank continued to evaluate potential strategies based on its informative research findings, the 

large Cargill facility presented an opportunity to establish a workplace banking program for 

unbanked and underbanked employees. In 2006, Cargill contacted Fort Morgan State Bank about 

the possibility of opening a branch at the local facility and providing banking services to its 

employees. Cargill observed that during the course of the workday, employees tend to damage paper 

checks. This causes inconvenience to the employer’s payroll staff, which must then reissue paper 

checks to replace damaged ones unfit for deposit or cashing. Cargill sought to reduce distribution of 

paper checks by encouraging direct deposit and promoting the convenience and benefit of banking 

relationships. The bank capitalized on the opportunity to reach a ready-made customer base of 

unbanked employees through a partnership with Fort Morgan State Bank. 

In 2007, the bank opened a two-station branch at the Cargill plant in a hallway that employees 

frequent at the beginning of each shift. Unlike Fort Morgan State Bank’s main branch, the Cargill 

branch operates 25 hours per week, with hours accommodating employees’ lunch and break periods 

and the influx of payday transactions on Thursday afternoons and Fridays. Deposit customers can 

access funds through teller services during operating hours or through the on-site ATM 24 hours a 

day, seven days a week. Due to the size of Cargill’s facility, the bank plans to deploy another ATM at 

the other end of the plant, improving accessibility and convenience for employees who usually walk 

a long distance to the branch to conduct transactions during their lunch break. The bank also offers 

fee-based check cashing for non-deposit customers, with an average of 200 checks cashed per 

month. 

Fort Morgan State Bank presents its services as part of Cargill’s orientation program for new 

employees. Cargill allocates 20 to 30 minutes for the bank to explain the Cargill Banking Benefit 

Plan. The package of banking services available to employees includes a free checking account, a 

complementary first box of checks, free debit card transactions for the first year, an additional 0.5 

percent interest rate bonus for savings accounts, and a prepaid debit card. At the conclusion of the 

presentation, the bank gathers information from employees who would like to open deposit 

accounts. Since employers verify customer identity, direct deposit is the only eligibility requirement 

for account opening, regardless of the individual’s ChexSystems record. The bank activates new 

accounts upon the direct deposit of employees’ first paychecks. The bank reports that high visibility 

among Cargill employees, convenience of the branch, and trust built through its partnership with the 

employer has been helpful in establishing customer relationships. 

Among new employees, few have had prior relationships with financial institutions, and most are 

not familiar with the banking system. To improve financial literacy and provide basic banking 

education, the bank offers financial education classes for Cargill employees and is currently 

developing a joint initiative with One Morgan County, a grant-funded assistance organization for 

new immigrants, to provide a financial training program using the FDIC Money Smart curriculum. 
 305 Case Studies 

At its Cargill branch, Fort Morgan State Bank reports 400 active accounts as of August 2008, 

representing about 20 percent of Cargill’s 2,000 total employees. While slower than expected, the 

Cargill branch has steadily increased the number of accounts opened. The bank continues to 

evaluate and develop approaches to make the Cargill operation a more profitable enterprise, but it is 

satisfied that the branch has broken even in its first year of operation. 

The bank attributes profitability challenges to a number of concurrent factors. The rapid turnover of 

employees at Cargill results in a high number of closures within six months of account opening, as 

employees end their relationship with the bank upon leaving the company. In addition, the majority 

of accounts have low balances due to the prevalence of low-income workers living paycheck to 

paycheck, and many employees still use a combination of financial service providers (such as check 

cashers), depending on their immediate needs. These factors limit bank revenues from these new 

accounts. Although account closures due to negative balances occur more frequently at the Cargill 

branch than at the bank’s main location, the bank makes a concerted effort to collect charge-offs to 

limit losses incurred. 

Fort Morgan State Bank emphasizes that although these initiatives have not translated into profits in 

the short term, serving this segment will have a significant, long-term effect on its bottom line 

because providing banking services presents a clear value proposition to unbanked and underbanked 

employees and will gradually build a strong customer base. By establishing a relationship with their 

employer, the bank can also offer better flexibility and accommodation to customers by providing 

quicker funds availability than from alternative financial providers. The bank prices its products and 

services below that of alternative service providers as another competitive measure. In addition to 

offering the same services available from check cashers, payday lenders, and other providers, the 

bank also offers mechanisms for Cargill employees to enter the economic mainstream by providing 

information and applications for its loan and credit products at the workplace branch. (Bank 

employees can then transfer applications received at the workplace branch to the main branch for 

approval and processing.) Fort Morgan State Bank observes that its partnership with Cargill has 

increased traffic at the bank’s main branch, signifying that some of its Cargill customers have been 

transitioning into more extensive banking relationships. 

III. Lessons Learned 

 Offering banking services through their employers can be an effective approach to 

serving unbanked individuals. Through employers, banks can access a pool of potential 

customers with steady income and a specific set of financial needs, which allows banks to tailor 

offerings accordingly. Banks can also leverage its relationship with an employer to build trust 

with unbanked employees and improve its ability to establish customer relationships. 

 Building a customer base in the unbanked and underbanked population requires 

patience and management of expectations. Profitability issues may challenge banks in the 

short term, but raising financial awareness and developing customer relationships over time 

eventually leads to long-term benefits to both banks and customers. 
 306 Case Studies 

 Banks can more effectively compete with alternative service providers by becoming 

knowledgeable about the unbanked segment and being willing to adapt and adjust in 

accordance to their needs. Fort Morgan State Bank developed and refined its products, 

pricing, and procedures as a conscious effort to challenge check cashing services and payday 

lenders and to provide greater benefits and incentives to unbanked individuals. As a result, it has 

gradually built a customer base both among unbanked Cargill employees and within the wider 

community. 

About Fort Morgan State Bank 

Fort Morgan State Bank is a one-office institution located in the town of Fort Morgan in Morgan 

County, Colorado. With $48.8 million in assets, the bank also operates six ATMs in its service area. 

Fort Morgan State Bank focuses primarily on residential and commercial lending but has a welldiversified portfolio. Morgan Capital Corporation, a one-bank holding company, owns 100 percent 

of the institution’s stock. 

Assets, $Th, as of September 30, 2008: $50,994 
 307 Case Studies 

International Ba nk of Commerce 

International Bank of Commerce (IBC) strives to improve access to banking services by providing 

full-service, seven-day-a-week banking in grocery stores and shopping malls. IBC has reported 

success with outreach efforts, particularly in the Hispanic community. The bank visits high schools, 

vocational schools and colleges, workplaces, community-based organizations, and has two branch 

locations that operate mock banking services as part of an educational program at elementary 

schools. 

“Each of the products we offer accomplishes a particular goal. Together, they help build awareness and trust in the 

community.” - George E. Daves, First Vice President and Corporate Compliance Officer 

I. Target Population 

Serving the Mexican Community 

International Bank of Commerce (IBC) serves a large and growing Mexican immigrant community. 

In Laredo, Texas, where the bank’s main office and 17 of its branches are located, the local 

community is bilingual and transacts business in English and Spanish. Communities in IBC’s other 

markets share similar cultural and social characteristics to Laredo, and for this reason, many branch 

employees of IBC are bilingual, and of Hispanic descent. 

The cultural and demographic makeup of its service areas presents particular challenges for IBC. 

First, the bank encounters mistrust of financial institutions within the Mexican immigrant 

community. Branch employees use IBC’s community outreach efforts as opportunities to build trust 

among the target population. Second, in some markets, such as Laredo and the Rio Grande Valley, 

many members of the community operate primarily with cash due to the prevalence of lower wage 

manual labor jobs. Workers often live paycheck to paycheck, so they need immediate access to 

funds. On payday, workers proceed to their nearest check cashing business and are charged 1 to 3 

percent of their check to obtain the funds to pay bills and buy groceries. IBC instead offers to cash 

on-us checks free-of-charge for both customers and non-customers. Although non-customers 

cannot cash checks not drawn on IBC, tellers encourage non-customers to open an account with 

direct deposit so payroll can be accessed the morning of payday, rather than at the end of the day 

when receiving paper checks. Free Check Card access is available at IBC’s ATMs, as well as pointof-sale locations. 
 308 Case Studies 

II. Initiatives 

Free Banking Services 

As part of its initiative to serve the unbanked and underbanked, in November of 1998 IBC’s 

executive management decided to bundle a range of banking services and offer them free-of-charge, 

making them accessible to individuals who have not had a banking relationship. IBC’s checking 

account product, which is free for customers, includes access to free bill pay, online banking, ATM 

use at all of its more than 400 ATMs, IBC Voice (a free 24/7 telephone banking service that allows 

customers to check their account balance and the last ten deposits and checks written), and IBC 

Mobile Banking. The program has been a successful strategy for serving the unbanked and 

underbanked community. 

Because IBC attracts individuals who come in to cash on-us checks, the bank has also trained and 

mobilized its retail force to seek opportunities to establish banking relationships with noncustomers, promote the free services package, and to cross-sell other products to existing customers. 

Micro-Community Program 

In 1995, IBC partnered with an elementary school to provide resources and guidance for the 

creation and operation of a student-run micro-community. This community’s economy operates on 

a mock financial currency, “Cougar Cash.” Students elect public officials, apply for jobs, earn wages, 

purchase goods, and pay taxes. The centerpiece of the micro-community is the on-campus IBC 

bank, where students can open accounts, make deposits, write checks, balance checkbooks, and 

withdraw their “Cougar Cash.” Trained by IBC employees, students run the micro-community’s 

branch and determine the bank’s policies, operations, and procedures. At a young age, students gain 

exposure to financial institutions and education on personal finance in addition to leadership skills 

and responsibility. IBC’s strong relationship with the school has also provided opportunities for 

outreach to parents, and branch employees have given financial education presentations to parents 

at PTA meetings. 

IBC has developed micro-communities in three other schools, with each establishing and following 

its own curriculum. In the fall of 2008, IBC implemented a corporate-wide micro-community 

initiative to expand the program to one micro-community in each of its 11 regions. 

Education and Outreach 

IBC offers a variety of education and outreach programs in its service areas. 

Like its micro-community program, Money Buzz educates children about personal finance. The 

bank conducts at least one free public seminar, which is based partly on FDIC Money Smart 

modules, in every market at local branches and malls. During the Money Buzz seminar, branch 

employees teach lessons on currency and the importance of savings. In addition, children learn 

through hands-on exercises and receive beehive-shaped coin banks with which they can begin 

saving. Money Buzz events attract good turnout and media attention that helps expose the 

community to the financial institution and its services. 
 309 Case Studies 

In 2007, the bank conducted 30 FDIC Money Smart presentations. In addition, the bank sends 

employees into the community and surrounding businesses to make personal contact, deliver 

presentations to local employees about the benefits of banking services, and encourage account 

opening. Customers must visit one of the bank’s branches to open an account. Branch employees 

have found that these outreach programs have been successful in acquiring new customers. As of 

July 2008, IBC has made 5,870 presentations to 28,492 local employees, many of whom were 

unbanked or underbanked individuals. 

Extended Hours and Convenient Branch Locations 

In focus groups conducted by IBC every 12 to 18 months, participants commonly cite 

“convenience” as the primary factor in determining which bank they select. To meet this need, in 

1997, the bank launched seven-day banking in Laredo and McAllen, and customers responded 

positively to the extended hours, citing the convenience of the branches being open longer and 

more often. In markets where the bank has just recently expanded hours, branch employees have 

noted that building awareness of the branch’s extended hours can be difficult. However, once 

customers are accustomed to having banking services available seven days a week, use and retention 

are very high. 

Seven-day branches located in grocery stores, Wal-Mart stores, and shopping centers expand the 

accessibility and convenience of IBC’s services. Customers who work late on weekdays can bank at 

those store locations during the weekend. For unbanked and underbanked customers, these 

locations also tend to be a more comfortable setting than the conventional brick-and-mortar 

financial institution. Bank employees also help create a welcoming environment by informally 

interacting and connecting with customers, walking the aisles of grocery stores, and offering to help 

them bag groceries. Making these potential customers comfortable is a key to getting them to open 

bank accounts. 

Mobile ATMs 

IBC operates four mobile ATMs that travel to different locations within its assessment areas, 

including street festivals and county fairs. The service enables customers to withdraw cash free-ofcharge at the ATM van’s location. Some of the newer models have ATMs on both sides of the van 

and are handicap accessible. 

Mobile Banking 

In June 2008, IBC introduced a free mobile banking service to help customers manage their finances 

and prevent overdrafts. Customers register for the service online or by phone and receive alerts via 

text message when their account balance falls below a specific amount determined by the customer. 
 310 Case Studies 

III. Lessons Learned 

 Employing bilingual staff who understand the challenges and complexities of a bicultural community improves the effectiveness and impact of the bank’s outreach to the 

unbanked and underbanked. The bank uses education and outreach in a variety of forums, 

such as schools and workplaces, to familiarize the community with the institution and the 

benefits of developing a banking relationship.

 Offering education and outreach along with a bundle of free banking services can 

provide the unbanked with tools to enter and remain in the banking mainstream. When 

equipped with available tools and timely account information provided by the bank, customers 

can take full advantage of the bank’s products and services. 

 According to the bank’s research and experience, customers value the convenience of 

extended hours and branch locations in grocery stores and malls. IBC accommodates the 

needs of its customers by providing services when practical and where customers are most 

comfortable. Once they become aware of and accustomed to these conveniences, the bank 

reports success in achieving customer satisfaction and retention. 

About IBC 

IBC was founded in 1966 to meet the needs of the small businesses of Laredo, Texas. Since its 

opening 40+ years ago, IBC has grown from less than $1 million in assets to $11.5 billion in assets. 

IBC serves over 100 communities throughout Texas and Oklahoma with more than 260 branches 

and over 400 ATMs. IBC is the largest minority-owned bank in the United States. 

IBC's motto is “We Do More,” and it has opened full-service, seven-day-a-week banks in grocery 

stores and shopping malls with the goal of improving customer access. IBC is a leader in delivering 

post-North American Free Trade Agreement (NAFTA) banking services in Texas, with 30 percent 

of the company's deposits coming from clients in northern Mexico. The bank strives to provide a 

quality banking experience and environment for anyone who walks in the door, regardless of 

whether they are a banked, unbanked, or underbanked individual. 

Assets, $Th, as of September 30, 2008: $9,821,668 
 311 Case Studies 

Mitchell Bank 

Mitchell Bank responded to changing demographics in its service area by establishing a branch, 

branded as Cardinal Bank, in a high school located in a predominantly Latino neighborhood. 

Cardinal Bank is a student-operated branch now open four days a week. Through this branch, 

Mitchell Bank is able to successfully provide products and financial education to both students and 

parents. Since it began, Cardinal Bank has opened more than 800 new accounts, of which 90 percent 

are from unbanked households. 

“In order for a product to be successful, you must remove the barriers that prevent the unbanked from becoming 

customers.”- James P. Maloney, Chairman 

I. Target Population 

When an influx of immigrants from Mexico and Central America began moving into the bank’s 

urban Milwaukee markets in the 1990s, Mitchell Bank decided to continue serving the area and 

adapt by targeting its marketing and outreach efforts to the Latino community. The bank also 

changed its focus to serve the unbanked and underbanked, the vast majority of whom were Latino. 

This focus put the bank in direct competition with check cashers and payday lenders. According to 

the 2000 Census, residents of Latino descent or origin comprise 75 percent of the population in 

Mitchell Bank’s service area. The bank estimates that 50 percent to 60 percent of the population in 

its service area is unbanked and 70 percent to 80 percent is underbanked, with alternative service 

providers conducting the vast majority of financial transactions prior to Mitchell Bank’s involvement 

in outreach. 

The bank aims to position itself as the primary destination for all individuals seeking financial 

services. With 50,000 residents within a two-square mile area surrounding the bank, the heavy 

concentration of consumers and alternative service providers presents valuable opportunities for the 

bank to understand and serve the market. Mitchell Bank identified the types of services offered by 

alternative providers—such as check cashing, lending, and sale of bus passes and phones cards—and 

tailored and augmented its services accordingly. By offering the services available from alternative 

providers at lower cost, Mitchell Bank improved its ability to market and capture the business of the 

unbanked and underbanked population. As of June 30, 2007 and for the past several years, the bank 

has and maintains the largest deposit market share in its service area. 

II. Initiatives 

Outreach to Latino Community 

Because the bank had little experience in working with the Latino community, bank management 

and employees reached out to community groups and formed relationships with nonprofit 

organizations, nongovernmental organizations, community organizations, politicians, and religious 

leaders to determine what products and services community leaders believed the bank should offer 

to best serve the Latino community. Community groups and representatives identified three primary 

obstacles hindering the unbanked population’s relationship with financial institutions: 1) lack of 
 312 Case Studies 

trust, 2) identification and documentation issues, and 3) readily available access to alternative 

financial service providers in a cash economy. 

Based on this feedback, Mitchell Bank developed a targeted approach. The bank sought to create a 

more inviting environment at its branches, both internally and externally. In addition to adorning 

branches with Spanish-language banners promoting banking services, the bank also offered an open 

invitation to the community, welcoming them to the bank, and displayed cultural symbols 

important to many in the Latino community, including the bank's lobby shrine to the Virgen de 

Guadalupe. The bank also hired a fully bilingual staff to remove language barriers. 

The bank has found that once individuals recognize that the bank could offer the same services as 

alternative financial service providers, and at a lower cost, they are generally more amenable to 

exploring other banking products and services. Branch employees cross-sell products, provide faceto-face counseling, and explain how and why developing a banking relationship is a more beneficial, 

cost-effective, and safer way to conduct financial transactions. For example, non-customers pay 

higher fees for remittance services than customers, and after a non-customer uses the service once 

or twice, bank staff will encourage them to open a small bank account, which allows them to pay 

lower fees and eliminates restrictions on the amount of money they can send per transaction. 

However, the bank understood that these initial changes alone were not enough to overcome the 

community’s mistrust of financial institutions and held community meetings to determine other 

ways to outreach and serve the needs of the Latino population. 

Cardinal Bank 

Introduced in 2000, Cardinal Bank is a full-service branch of Mitchell Bank located on the campus 

of a local high school with a need for education in and exposure to personal finance and banking 

services. The branch is operated by eight to ten students trained and supervised by Mitchell Bank 

employees. Most of the school's students were earning money working in co-op programs with 

employers or other part-time work. Many of the students used check cashers instead of banks to 

cash their paychecks, so the school requested that Mitchell Bank open a branch at the school where 

students could open deposit accounts. This allowed the bank to develop banking relationships with 

students and staff at the school and also provided a point of entry to the rest of the community by 

leveraging its partnership with the school. The community’s trust in the school and its 

administration presented a valuable opportunity for the bank to build trust within the community. 

Furthermore, Cardinal Bank’s physical location at the school created an atmosphere that was 

viewed as less intimidating than that of traditional banks. 

Through its presence at the school, Mitchell Bank teaches students about financial literacy and 

reaches parents in a more amenable way than through conventional outreach methods. The bank is 

in contact with the school’s administration on a regular basis to organize events and education 

sessions for the community. The generational dynamics within immigrant families have also been an 

important avenue for outreach to the unbanked, albeit indirectly. High school students from the 

second generation tend to be more acclimated and acculturated than their first generation immigrant 

parents and often become de facto financial advisors to their families. Equipped with education and 

regular banking habits through their experience with Cardinal Bank, students encourage parents to 

become part of the financial mainstream. 
 313 Case Studies 

During Cardinal Bank’s opening week, one student’s parent arrived at the branch with cash 

wrapped in aluminum foil, which had been stored in the family’s freezer for safekeeping. Although 

the parent wanted to open an account at Cardinal Bank, branch employees had to wait until the 

money thawed before it could be deposited. This experience, and other similar observations, 

exemplifies the need for banking services that can provide financial benefit and mitigate issues of 

theft and safety for the Latino community. 

In the eight years since Cardinal Bank’s inception, Mitchell Bank has opened more than 800 

accounts for students and staff. Minors can open accounts without parental approval but are 

restricted from debit card access. Once students graduate from high school, they can request an 

upgrade to a regular checking product at Mitchell Bank’s office, which transfers the account to the 

main bank rather than Cardinal Bank. The bank has not suffered any loss and is not aware of any 

incidents of account misuse. 

Identification and Documentation Assistance 

In response to the obstacle of documentation requirements noted by community groups, Mitchell 

Bank actively sought to assist individuals in the Latino community obtain forms of identification 

that would allow them to open accounts and establish banking relationships. In 2003, the bank 

began tackling this problem by providing Spanish-language brochures and conducting community 

events to inform potential customers about ways to obtain identification. Potential customers who 

did not have sufficient documentation for account opening were encouraged to obtain state-issued 

identification since they were eligible for drivers’ licenses even without Social Security numbers 

under state law. 

Rather than turning away individuals who did not meet the bank’s identification requirements, 

Mitchell Bank took initiative to help them obtain the identification they needed. The bank 

communicated with the Department of Motor Vehicles (DMV) to confirm eligibility rules and 

relayed information and provided relevant forms to customers. This program successfully addressed 

a primary concern of the community and built awareness and trust in the institution. Mitchell Bank 

continued the program until a new law was enacted in March 2007, which stipulated that Social 

Security numbers were required in order to apply for state-issued identification. 

Adapting to its market, Mitchell Bank also modified its own identification requirements for banking 

services. The bank began accepting the Matrícula Consular card and sponsored the Mexican 

Consulate to visit its Milwaukee location and issue Matrícula Consular cards. The event attracted 

over 1,500 individuals to the branch, and many opened bank accounts during their visit. Mitchell 

Bank was also one of the first financial institutions in the nation to become a certifying Individual 

Tax Payer Identification Number (ITIN) acceptance agent. As an agent for IRS, the bank will 

process an ITIN application, without charge, to allow individuals without a Social Security number 

to open an interest-bearing account and pay their taxes. From 2003 through September 2008, the 

bank processed over 3,200 ITIN applications, each representing a new account for a formerly 

unbanked consumer. Offering these services to the community has been critical to bring unbanked 

individuals into the banking system. 
 314 Case Studies 

Remittances 

Mitchell Bank participates in Appleseed’s Fair Exchange program,12 and since 2005 the bank has 

been and remains the largest volume user of Directo á Mexico,13 in the nation. The bank prides itself 

on its transparency and disclosure practices, particularly due to the prevalence of hidden fees and 

high rates among alternative service providers. On a daily basis, the bank posts foreign exchange 

rates for all of its products and that of its competitors in branch lobbies, which informs customers 

of how much money their family will receive upon transfer and allows them to comparison shop for 

the most favorable product and provider. The bank’s transparency has been well-received, and the 

community has appreciated that the bank provides information on fees, charges, and rates upfront. 

Small Dollar Loan Program 

Mitchell Bank participates in the FDIC’s Small Dollar Loan Program Pilot Program.14 Initially, the 

bank limited its Small Dollar Loan product to customers with at least a six-month relationship with 

Mitchell Bank due to concerns regarding the customer’s ability to repay and lack of collateral. 

However, the institution recently decided to begin a pilot program that will offer small dollar loans 

to ITIN borrowers and non-customers in order to increase volume and exposure in the market. To 

mitigate its increased risk, the bank reduced the size of the loan to non-customers and ITIN 

borrowers from $1000 to $500. This change has provided new marketing avenues and the bank has 

experienced an increase in loan inquires and activity. 

III. Lessons Learned 

 The bank employed an effective and informative strategy for determining how to best 

serve the unbanked and underbanked by asking community members and organizations 

for their insight on the types of products needed and how the bank should provide these 

offerings. Mitchell Bank also gained immediate acceptance from the community because the 

bank demonstrated a willingness to listen, modify their offerings, and execute successfully. 

 Once the bank gained the community’s trust, customers became more willing to open 

depository accounts and develop deeper banking relationships. The bank is able to 

leverage this trust as an opportunity to suggest other ways to conduct financial transactions that 

are more affordable, safer, and effective. Employing a knowledgeable bilingual staff has helped 

the bank become a source of information for banking products, guidance, identification 

assistance, and financial management to the community. 

 

12 In 2007, Appleseed, a national legacy advocacy organization, partnered with financial institutions to develop a “Fair Exchange” brand that designates 

services that voluntarily disclose all fees, exchange rates, and other services that enable consumers to make informed decisions. Consumers can then 

identify the most favorable remittance fees and exchange rates and participating institutions who present clear, up-front information on their 

remittance products are rewarded for their transparency with greater market share. 

13 “Directo a México” is a payment system established by the Federal Reserve and Banco de México that enables consumers to transfer funds from a 

bank account in the United States to any bank account in Mexico. 

14 Key features of the FDIC Small Dollar Loan Pilot Program may include: loan amounts up to $1,000, amortization periods longer than a single pay 

cycle and up to 36 months for closed-end credit or minimum payments that reduce principle (that do not result in negative amortization) for openend credit, no prepayment penalties, origination and/or maintenance fees limited to the amount necessary to cover actual costs, and an automatic 

savings component. (See: http://www.fdic.gov/smalldollarloans/index.html.) 
 315 Case Studies 

 Continually evaluating and developing products and services enables the bank to meet 

the changing needs of its market. Despite its success in outreach to the unbanked and 

underbanked, Mitchell Bank seeks new and better ways to serve the community, learning 

constantly from its past experiences and those of other institutions. 

About Mitchell Bank 

Founded in 1907, Mitchell Bank is an $81.8 million family-owned community bank that is wholly 

owned by Mitchell Bank Holding Company, a one-bank holding company located in Milwaukee, 

Wisconsin. The bank operates out of 11 banking offices in Milwaukee County and Waukesha 

County. Mitchell Bank is at the forefront of the push to reach Latino communities and is a leader in 

reaching unbanked individuals. 

Assets, $Th, as of September 30, 2008: $78,750 
 316 Case Studies 
 317 Case Studies 

Monroe Bank & Trust 

Monroe Bank & Trust has developed a strong community presence in its service area through its 

extensive employee volunteer program, which assists over 100 nonprofit organizations in its local 

market. By leveraging relationships with local agencies and community organizations, the bank is 

currently expanding its education and outreach efforts to include financial education programs 

delivered in neighborhoods with high unbanked populations and a “Learning Bank” to provide 

financial literacy training for low-income individuals. In addition, the bank offers a transitional, 

second chance deposit account, Opportunity Checking, for customers ineligible for standard 

checking accounts. 

“Being a publicly conscious organization has motivated us to expand and tailor our education and outreach efforts and 

to offer a targeted product for the unbanked.” – H. Douglas Chaffin, President and CEO 

I. Target Population 

Monroe Bank & Trust’s primary service area is Monroe County, Michigan, where 20 of its branches 

are located. The bank also has five additional branches in Wayne County. Some of these branches 

serve low- to moderate-income Census tracts, where minorities represent a significant portion of the 

population; in one specific zone known as Orchard East, African Americans represent 31 percent 

and a growing Hispanic community represents 5.2 percent, according to 2000 Census tract data. 

The bank cites local economic and employment issues as main drivers for population trends, and 

long-time residents have begun leaving the area in response to rising unemployment and plant 

closings in the automobile industry. 

II. Initiatives 

Volunteer Organization: ENLIST 

To encourage bank employees to serve their local communities, Monroe Bank & Trust established

Employees Now Linked in Service Together (ENLIST), a unique bank-sponsored volunteer 

organization that rewards employees with additional time-off for participation. For every 25 hours 

employees volunteer for bank-approved projects in the community, they receive one vacation day up 

to a maximum of five days per year. Currently, out of the bank’s 380 total employees, 300 participate 

in ENLIST and volunteer their time assisting about 100 different nonprofit agencies for a total of 

approximately 9,000 man hours annually. 

Monroe Bank & Trust leverages its strong community relationships to develop, refine, and validate 

its approaches. Community leaders have identified financial literacy as a primary need in low- to 

moderate-income areas, and in response, the bank has made financial education a priority in its 

efforts to serve the unbanked and underbanked. For many years, the bank has provided educational 

sessions on basic banking, home ownership and mortgage products, and savings programs both at 

the bank and through outreach programs at high schools, employer sites, public events, and 

community organizations, either on a scheduled or ad hoc basis. 

As an extension of ENLIST, Monroe Bank & Trust is currently developing MBTeach, a financial 

literacy program that would provide similar incentives for bank employees to volunteer. Designed as 
 318 Case Studies 

a formalized approach to the bank’s existing educational outreach programs, bank employees 

participating in MBTeach will deliver seminars based on the FDIC Money Smart curriculum in 

market areas where such programs would be most valuable, such as faith-based organizations, 

service agencies, and high schools in low- to moderate-income Census tracts. Topics will expand 

upon those covered in previously offered seminars, such as basic banking, mortgages, and first-time 

home purchases. 

In addition, the bank is working with local agencies, city officials, community centers, and a 

community college, to convert a former branch facility into a “Learning Bank,” which will offer 

adult continuing education courses, including financial literacy training, for low-income residents. 

The “Learning Bank” will also serve as a platform for marketing the bank’s entry-level checking 

product, which is described in greater detail below. Monroe Bank & Trust reports receiving support 

and positive feedback from the community throughout the developmental and planning stages, and 

plans to launch the center in 2009. 

Bank at Work 

Branch managers leverage their close ties to commercial and business customers in the community 

to deliver education and services to employees, at the employer’s request or via the bank’s initiative. 

On occasion, Monroe Bank & Trust sends branch employees to facilitate Bank at Work programs 

at employer sites where they conduct informational sessions, market relevant products to employees, 

and open accounts on-site. Bank employees observe that Bank at Work programs have been 

somewhat successful in initiating new customer relationships; however, statistics have not been 

systematically tracked. 

Opportunity Checking 

After attending presentations on entry-level and second chance deposit accounts, Monroe Bank & 

Trust decided to design their own formal checking product for unbanked and underbanked 

customers seeking to enter the economic mainstream. The bank launched its Opportunity 

Checking product in January 2008. At the discretion of branch managers, Opportunity Checking

may be offered to customers, who would otherwise have been automatically rejected based on 

ChexSystems, as a stepping stone in transitioning to a more traditional checking account. 

Restrictions placed on these accounts include no overdraft privileges, no deposit transactions 

through ATM or debit cards, $10 monthly service fee, and $300 maximum ATM withdrawal. After 

12 months, customers exhibiting proper account management can request an upgrade to the bank’s 

standard checking product. 

As of August 2008, the bank has 28 active Opportunity Checking accounts. While the bank does 

not engage in advertising this second chance checking product, branch employees are expected to 

determine customer needs and refer products, such as Opportunity Checking, when appropriate. 

The bank also seeks to expand customer acquisition through its planned educational outreach efforts 

in unbanked and underbanked communities. 

III. Lessons Learned 

 Strong relationships with community leaders and organizations can help banks build 

trust among unbanked populations and maximize the impact of their outreach efforts. 
 319 Case Studies 

In response to feedback from community leadership, the bank expanded and formalized its 

financial education offerings and is developing a financial literacy training center specifically for 

low-income residents. These educational efforts have been developed and will be delivered in 

close partnership with community organizations, which the bank believes will improve their 

effectiveness and reach among unbanked populations. 

 Banks must develop broad and varied strategies to reach out and deliver education and 

services in the neighborhoods where unbanked and underserved consumers reside and 

frequent. Banks cannot expect to successfully outreach these individuals by utilizing a single 

approach or single location. Instead, a variety of outreach and educational approaches adapted to 

the community can enable banks to deliver information and services relevant to specific 

segments of unbanked populations and be more effective in encouraging them to establish 

banking relationships. A product like Opportunity Checking in the bank’s product portfolio 

can help unbanked individuals ease back into the banking system. 

About Monroe Bank & Trust 

Monroe Bank & Trust is a commercial bank headquartered in Monroe, Michigan. It is wholly owned 

by MBT Financial Corporation, a one-bank holding company also located in Monroe, Michigan. 

Monroe Bank & Trust opened a mortgage subsidiary, MBT Credit Company, Inc. on February 25, 

2002. MBT Credit Company, Inc. is 100 percent owned by the bank. Monroe Bank & Trust operates 

25 full-service offices and 41 ATMs. 

Monroe Bank & Trust’s customer base consists primarily of consumer and residential borrowers and 

area small- and medium-sized businesses. The bank’s primary business strategy is that of a 

“community bank” with a primary business focus on residential real estate mortgages and small 

business lending. All branches offer full lines of deposit products and loans, such as commercial 

loans, mortgage and home improvement loans, lines of credit, and consumer installment loans. The 

bank is also active in the secondary mortgage market through the sale of qualified residential real 

estate mortgages with its mortgage subsidiary MBT Credit Company, Inc. 

Assets, $Th, as of September 30, 2008: $1,504,721 
 320 Case Studies 
 321 Case Studies 

Banks’ Efforts to Addr ess Obstacles and Access 

Objective 1 – Chapter 4

Education and Outreach 

Objective 2 – Chapters 5-7

Obstacles and Access 

Objective 3 – Chapters 8-11

Products and Services 

Identify and quantify the extent to 

which insured depository 

institutions outreach, serve, and 

meet the banking needs of the 

unbanked and underbanked. 

Identify challenges affecting 

the ability of insured 

depository institutions to 

serve the unbanked and 

underbanked, including but 

not limited to cultural, 

language, identification 

issues, and spatial/location 

issues. 

Identify innovative efforts 

depository institutions use to 

serve the un/underbanked, 

including small dollar loans, 

basic banking accounts, 

remittances, and other lowcost accounts, products and 

services used by the 

un/underbanked. 

• Retail Branch Information 

• Services Provided to NonCustomers 

• Account Opening & 

Onboarding 

• Deposit Products 

• Savings Accounts 

• Payment Products 

• Credit Products 

Case Study 

Examples 

Case Study 

Examples 

Case Study 

Examples 
 322 Case Studies 

Obstacles and Access 

The four case study banks highlighted in this section utilize a variety of approaches to mitigate 

barriers and overcome obstacles faced by unbanked and underbanked individuals in their service 

areas. 

Institution Target Population Initiative 

Bangor Savings Bank 

(Bangor, ME) 

Low- to moderate-income 

individuals in primarily rural 

areas 

Mitigates geographic barriers and improves accessibility of 

banking services by offering extended service hours, 

account access via Web and telephone, and full refunds on 

surcharges incurred when using any bank’s ATM 

Citizens Union Bank 

 of Shelbyville 

(Shelbyville, KY) 

Hispanic community in 

Kentucky MSAs 

Opened Hispanic-focused branch, Nuestro Banco, which 

accommodates customers by employing bilingual staff, 

operating during non-traditional hours, and adopting a 

more casual and culturally-sensitive environment 

Ridgewood Savings Bank 

(Ridgewood, NY) 

Diverse immigrant and retiree 

populations in Queens and 

Bronx boroughs of New York 

City 

Hires bilingual staff, publishes bilingual marketing 

materials, and advertises in local ethnic newspapers 

according to demographics of each branch’s market area; 

provides full range of banking services in mobile branch 

that regularly visits elderly communities and other 

locations with limited access to branches 

Second Federal Saving 

(Chicago, IL) 

Mexican immigrant and 

Mexican-American population 

in Chicago’s South Side 

Helps undocumented individuals obtain identification 

required to open accounts by sponsoring visits by the 

Mexican Consulate to issue Matrícula Consular cards at the 

bank and by becoming an Individual Taxpayer 

Identification Number (ITIN) acceptance agent 

Common Lessons Learned 

 Recognize changes in customer demographics, assess obstacles in your market, and address them accordingly. 

 Offering banking services in a less formal setting or more convenient location can help the unbanked and underbanked 

feel more comfortable with financial institutions. 

 Providing greater and more varied means of access (e.g., extended hours, web/phone access) also encourages 

unbanked and underbanked individuals to become customers. 

 Bank employees play an important role in welcoming unbanked customers and making them feel at ease by assuaging 

misperceptions about banks, showing sensitivity to their needs, and communicating in their native languages. 
 323 Case Studies 

Bangor Savings Bank 

Bangor Savings Bank has developed a business model that encourages inclusion, lowers barriers for 

developing customer relationships, and provides opportunities to help unbanked and underbanked 

individuals enter the mainstream banking system. In particular, the bank focuses on providing its 

regular products with greater accessibility and improved service as part of a sustainable model for 

outreach and inclusion. 

“Overcoming the barriers of time, geography, and access and connecting customers to today’s economy are essential to 

the prosperity of our communities and the sustainability and growth of our institution.” 

- John Moore, Senior Vice President of Community Development Lending 

I. Target Population 

Bangor Savings Bank serves more than 125,000 households across Maine, representing about 20 

percent of the state. The bank’s geographic service area incorporates the State of Maine including 

three metropolitan statistical areas: Bangor, Lewiston- Auburn, and Portland. However, most of the 

16 Maine counties represented are rural, characterized by economies based on natural resources and 

modest household incomes. The bank notes that while the state reports low- to moderate-income 

overall, rural communities typically exhibit incomes lower than the state average, with many 

unbanked and underbanked residents within that demographic. Furthermore, rising energy costs and 

an aging population have had a notable effect on the state’s economy and the financial situation of 

its residents. Unbanked and underbanked individuals served by the bank include clients served by 

social service programs, youth, Native Americans, and other low-income individuals. 

II. Initiatives 

Increased Accessibility 

Given its rural customer base, Bangor Savings Bank has sought to mitigate geographic barriers and 

other customer considerations, such as disabilities or nontraditional working hours, by offering 

multiple methods of access to the bank and its services free-of-charge. Bangor Savings Bank 

emphasizes that its customers need not visit one of its bank branches in order to access their funds. 

Nevertheless, for customers who prefer face-to-face interaction, branches in certain markets have 

extended hours up to 60 hours per week, open from 7:30 a.m. to 5:30 p.m. on weekdays and until 

5:30 p.m. on Saturdays to accommodate commuters and full-time workers. The bank also offers the 

option of free ATM banking and drive-up windows at most retail branch locations. 

The bank has found that offering account access through electronic banking services is an important 

tool for providing services to customers and for encouraging unbanked and underbanked individuals 

to become customers. Bangor Savings Bank reports that electronic banking, specifically direct 

deposit, promotes savings because customers can allocate and deposit a portion of their paycheck 

into a savings account before they receive the money in a tangible form. This capability is 

particularly important for individuals of low- to moderate-income who are less likely to save on a 

regular basis, as it helps them easily create a personal savings plan that requires minimal effort. 
 324 Case Studies 

To further facilitate access, the bank offers free ATM access anywhere in the world. Not only does 

Bangor Savings Bank not charge fees to customers who use other bank ATMs, it refunds surcharges 

assessed by the other banks. Free ATM services are available to all customers, with no limitation on 

type of account, frequency of use, or amount of ATM fees. Customers can use banking services 

where it is most convenient for them without having to visit a Bangor Savings Bank branch or 

ATM. The bank incurs costs of over $1 million per year to support this service. 

The bank also regards its Web portal as an “electronic branch” where customers can obtain 

information and access services. Online capabilities are available free-of-charge to all customers and 

include bill payment, credit approval, and consumer and mortgage information. The bank has found 

that retired customers, in particular, have benefited from online access, citing that it allows them to 

stay connected while using contemporary banking services. 

Automated phone services are available toll-free 24 hours a day and enable customers without access 

to online banking to conduct basic banking transactions and inquiries, such as transferring funds and 

checking balances. For customers in need of more personalized service, a voice-to-voice phone call 

connects them directly to a customer service representative who can provide live assistance for their 

banking needs six days a week. The bank has found that phone-accessible services are particularly 

helpful for customers with disabilities or geographic limitations. 

Reducing Overdrafts and Fees 

The bank also emphasizes its efforts to lower barriers through its business practices and customer 

service, rather than offering specialized products, as a way to respectfully and purposefully 

encourage unbanked individuals to develop a customer relationship. For example, the bank 

encourages direct deposit by offering a no-service-charge checking account. In total, Bangor Savings 

Bank provides direct deposit and free online banking to 70,000 Social Security and SSI recipients. 

Bangor Savings Bank offers products and services to help minimize overdrafts, which is a common 

obstacle for unbanked and underbanked individuals. Overdraft protection programs include 

StandBy Money Line of Credit, which offers up to $1,000 to cover overdrafts, and Savings 

Account Link, which automatically transfers funds from savings accounts to cover the overdraft 

amount. The Bank also offers No Return Benefit (NRB), a courtesy overdraft program that allows 

customers to pay checks in excess of their balance up to a predetermined limit. The bank also 

systematically identifies accounts with excessive overdrafts in order to provide personal coaching 

and improve financial management. Customers can also enroll in a Fresh Start Program to repay 

their overdraft balances, which allows them to maintain checking account privileges while receiving 

coaching from a bank employee. 

Observing that competing banks may process items in order of largest to smallest check amounts, 

Bangor Savings Bank elects to pay checks sequentially, in the order in which they were written. The 

bank believes that ordering checks paid by amount can create more overdraft situations and cause 

overdraft fees to be incurred on more checks. By using a sequential order, the bank hopes to reduce 

the number of bounced checks and respect the intent of the customer. 

Benefit Checking 

Benefit Checking is an entry-level account geared to students and customers who tend to maintain 

lower balance or earn lower incomes. For this product, the bank lowered the opening deposit 
 325 Case Studies 

requirement from $100 to $25, and waived minimum balance restrictions, service charges, and 

monthly fees. However, Benefit Checking customers still have access to all of the same services 

and methods of access, including online banking and billpay, as other Bangor Savings Bank 

customers. The bank cites this product as one way in which it lowers financial obstacles that prohibit 

unbanked and underbanked individuals from opening an account. 

Bangor Workplace Advantage 

As part of its outreach efforts, the bank offers Bangor Workplace Advantage to employees of its 

business customers, bringing information, education, and banking services to the workplace. For 

employees who do not have an existing banking relationship with Bangor Savings Bank, the bank 

offers to open a free Benefit Plus Checking (i.e., premium NOW account) account on-site and 

provides the initial $25 required as an opening deposit. Customers benefit from direct deposit of 

their paychecks. The bank reports that since the program’s inception, more than 175 workplace 

outreach efforts have been conducted resulting in nearly 600 new accounts. Employees realize that 

they qualify for an account and can becoming a banking customer. 

Individual Development Accounts (IDA) 

Bangor Savings Bank partners with other organizations in Maine that provide financial literacy and 

career development training. Through relationships with local community groups, foundations, and 

nonprofit organizations, the bank initiates, sponsors, and runs the IDA program. This provides 

another opportunity for these organizations to assist their clients. In turn, the bank gains a foothold 

in the community as a trusted partner and service provider for both the organization and for 

unbanked individuals. 

The bank’s IDA programs span a variety of target groups. The Maine Youth Opportunities initiative 

focuses on adolescents in foster care and provides them with access to checking accounts, free 

ATM, and online banking services. The Jobs for Maine Graduates organization incorporates Bangor 

Savings Bank’s IDA into its financial literacy and career development program. Aspiring first-time 

home owners can also participate in the IDA program through local community organizations. 

Partnerships with Third-Party Organizations 

Community outreach efforts are primarily delivered through third-party organizations that already 

have relationships and connections with a particular population segment. The community groups 

include Coastal Enterprises Inc., Women Work & Community, Four Directions Development 

Corporation, and Jobs for Maine Graduates. As part of the bank’s relationships with these 

organizations, bank employees support and participate in the community group’s educational 

outreach programs. In turn, the organizations inform and encourage their clients to bank with 

Bangor Savings Bank, which then becomes the face of the banking industry for these groups. 

Bangor Savings Bank opens several hundred accounts annually as a result of community outreach 

efforts through third-party partnerships. 

Bangor Savings Bank also helps nonprofit organizations operate their programs by providing 

technical assistance and financial services to streamline and manage their operations. For example, 

the bank set up a cash management system for an organization that provides financial literacy 

training and matched savings for youth receiving foster care services. The system includes ACH 
 326 Case Studies 

origination capacity that allows the organization to efficiently send out electronic stipends to 

participants at any financial institution statewide instead of writing a high volume of small checks. 

As a result, funds can be easily moved, tracked, and recorded from the organization to program 

participants. By utilizing electronic banking services to optimize efficiency, nonprofit organizations 

can improve their ability to serve a broader rural geography. Bangor Savings Bank regards this as a 

sustainable approach since it helps community organizations increase their client base and provides 

the bank with more opportunities to build customer relationships with unbanked and underbanked 

individuals. 

Needs assessment and feedback from nonprofit community partners have also resulted in the bank 

developing new services to improve access. For example, the bank is working to provide and 

coordinate multiple language translation and interpretive services and provide support for both 

hearing impaired and visually impaired customers. 

III. Lessons Learned 

 Providing greater and more varied means of access to dispersed, rural communities 

encourage unbanked and underbanked individuals to become customers. The bank has 

expanded branch hours, free ATM, free Electronic Benefits Transfer (EBT) ATM access, free 

online banking, and services via Web and telephone to overcome common barriers for using 

banking services and to improve convenience and comfort level to potential customers. 

 Implementing business strategies that bring value to the unbanked and underbanked 

is integral to the bank’s ability to grow and sustain its customer base. Increased 

accessibility and improved banking products and services not only serve the unbanked and 

underbanked, but also the bank’s entire customer base. Furthermore, the bank views this as a 

more respectful and effective approach to bringing unbanked individuals into the economic 

mainstream. 

 Forming mutually beneficial partnerships with nonprofit organizations promotes a 

sustainable business model for serving unbanked and underbanked individuals. The 

bank leverages established organizations’ connection and presence in the community to 

maximize the effectiveness of its outreach efforts. Its nonprofit partners, on the other hand, 

benefit from improved operational efficiency through the bank’s technical assistance and 

financial services. 
 327 Case Studies 

About Bangor Savings Bank 

Bangor Savings Bank, headquartered in Bangor, Maine, is a $2.3 billion retail financial institution 

that operates as a state mutual savings bank. It offers retail banking and trust services to Maine 

consumers as well as large commercial, corporate, and small business banking services to Maine 

businesses at its 51 deposit branches. Established in 1852, the institution expanded its service area 

throughout the state through mergers with regional banks and acquisition of offices. In its most 

recent FDIC CRA Public Performance Evaluation, the bank received the highest possible 

“Outstanding” rating. 

Assets, $Th, as of September 30, 2008: $2,318,810 
 328 Case Studies 
 329 Case Studies 

Citizens Union Bank of Shelbyville 

In July 2007, Citizens Union Bank opened a branch called Nuestro Banco (“Our Bank”), a Division 

of Citizens Union Bank, to target the Hispanic community. A major component of their strategy to 

reach the Hispanic market is its branch configuration. Nuestro Banco provides a welcoming 

environment to enhance the banking experience. It competes with small check cashers and large 

payday lenders. Citizens Union Bank also offers two affordable small dollar loan programs and 

provides extensive outreach to underserved populations. 

“The more we learn about our market, the more we try to reach out and cater to their needs. It’s a good business 

decision to do this, but more importantly, as an organization we believe it is the right thing to do.” 

- Kimberly Davis, First Vice President 

I. Target Population 

Serving the Hispanic Community 

In 2004, the bank started seeking better ways to serve its local Hispanic population and has 

significantly expanded its efforts in recent years. This effort came about, in part, due to observations 

by bank employees suggesting that members of the Hispanic community in Shelbyville, Kentucky, 

used high-cost alternative financial service providers, such as check cashers, and obtained financing 

through used car dealerships. In addition, a review of local population trends by the bank revealed 

that the Hispanic community was the largest unbanked demographic in its service area. Armed with 

this information, bank staff took the initiative to develop specific outreach strategies to address the 

financial product and service needs within Shelbyville’s Hispanic community. After three years, the 

bank decided to expand its efforts beyond Shelbyville, beginning with Louisville. Today, Citizens 

Union Bank has Hispanic-targeted outreach strategies across its 20 branches. 

The bank also recognizes that Hispanics are not the only populations that are unbanked and 

underbanked within its service area. To become more inclusive in their outreach efforts, the bank 

has included additional programs that address the diverse needs of the wider community, including 

African Americans, single parents, U.S. military personnel, and any other unbanked and 

underbanked residents. 

II. Initiatives 

Nuestro Banco 

In July 2007, Citizens Union Bank opened the first known Hispanic-focused branch in Kentucky. 

The branch, Nuestro Banco, a Division of Citizens Union Bank, is completely bilingual; employees 

answer telephones in Spanish. Operating hours differ from that of other branches, staying open until 

7:00 p.m. on Friday and from 9:00 a.m. to noon on Saturday. In addition, Citizens Union Bank paid 

attention and care to the physical aspects of Nuestro Banco, which looks markedly different than 

Citizens Union Bank’s other branches. With the help of its Hispanic employees, the bank decorated 

Nuestro Banco with familiar cultural objects and a traditional color scheme to create a casual and 

welcoming environment for its customers. 
 330 Case Studies 

The bank introduced new banking products that were responsive to the banking needs of the 

Hispanic community. Aware that some in the Hispanic community are unable to open accounts 

because of the lack of traditional identification, the bank offers check cashing services as an 

alternative. If the bank can verify the check presented, non-customers can cash the check at a lower 

fee than at local check cashers. If an individual opens or already has a bank account, they can utilize 

Directo a México, in which Citizens Union Bank is enrolled, to send money.15 Using Directo a 

México, customers can transfer money from their bank account to that of their relatives in Mexico 

at a better exchange rate than elsewhere in the community and for a smaller fee ($2.50 to transfer 

less than $400, and 2.5 percent for amounts above $400). 

Due to the range of valuable services provided to the Hispanic community, Nuestro Banco has 

succeeded in opening more new accounts than any other branch in the Citizen Union Bank’s 

network since its opening. The branch averages 65 account openings per month, totaling 1,861 

checking and savings accounts through June 2008. Only three accounts have been closed in the 11 

months since the branch’s opening. 

Education and Outreach 

To increase the reach of its financial education programs, Citizens Union Bank partners with 

community organizations, including local churches, Catholic Charities, the Kentucky Council on 

Economic Education, Centro Latino, the Housing Partnership, and Kentucky Housing. Bank 

employees meet with community organizers to determine how the bank’s programs can best meet 

the needs of its organization’s members. Bank employees help the organizations determine which 

classes from the FDIC Money Smart curriculum the bank offers. Financial education sessions are 

frequently held off-site to encourage attendance in a more comfortable setting. In addition to 

education, the bank also conducts extensive outreach efforts in the communities it serves to 

promote account opening and offers to open accounts off-site. 

Financial education programs are well-attended, with classes normally attracting 12 to 20 people. 

Some classes, such as one geared to school teachers seeking guidance on how to educate students on 

personal finance, has attracted nearly 400 attendees. The bank found that the FDIC Money Smart 

program works well because it provides all materials needed to teach the course. Attendees receive 

handouts and participate in a Q&A session at the conclusion of the class. 

Organizing these financial education programs is a joint effort between the bank and local 

community organizations. While the bank often reaches out to organizations to offer its services and 

programs, community members also take initiative to request help from the bank. For example, 

customers may come into the branch to inquire about a local event that would benefit from a 

financial education session, or community members may approach branch personnel during other 

events, such as community fairs. To gain further insight into the needs of different constituencies 

within the community on how to tailor the bank’s education programs, the bank works closely with 

members of both the bank’s Hispanic Advisory Council and the African-American Advisory 

Council. 

 

15 Directo a México is a payment system established by the Federal Reserve and Banco de México that enables consumers to transfer funds from a bank 

account in the United States to any bank account in Mexico. 
 331 Case Studies 

Secured Checking Account 

In February 2003, Citizens Union Bank of Shelbyville began offering Secured Checking Accounts 

to help people who have mismanaged past accounts or are in ChexSystems re-establish themselves 

in the banking mainstream. Working in tandem with branch personnel for counseling and education, 

customers must demonstrate an intention and willingness to work toward restoring a good history. 

With cash or direct deposit of $100 and a $10 monthly service charge, they can open a Secured 

Checking Account that allows unlimited transactions, no minimum balance, access to a Citizens 

Union Bank Check Card, and free internet banking. However, the account does not allow online bill 

pay or check writing. After six months in Secured Checking, customers can transition to Freedom 

Checking Accounts, the bank’s regular checking account product. Secured Checking provides a 

valuable opportunity to bring customers back to creditworthy standing. As of June 2008, the bank 

had 185 Secured Checking Accounts outstanding. 

Fresh Start Program 

If a customer continually has a negative balance, they can transition to Fresh Start, a repayment 

program for overdrafts on accounts. Customers usually request assistance to correct their account, 

and after review, branch personnel may refer them to the program. Payments are made over the 

course of six months on a monthly, semi-monthly, bi-weekly, or weekly basis, depending on 

customer preference. At any time, customers can pay the remaining balance. Fresh Start does not 

charge fees or interest, so the customer pays only the principal balance due while their account 

remains open and active. The bank currently has 322 active accounts in Fresh Start.

Neither Secured Checking nor Fresh Start is actively marketed by the bank. Instead, customers 

are informed of the programs’ availability by employees when they come in to open an account or 

are referred on a case-by-case basis. 

FDIC Small Dollar Loan Pilot Program 

Citizens Union Bank has been selected to participate in the FDIC’s Small Dollar Loan Pilot 

Program, a project intended to identify ways in which banks can incorporate affordable, small dollar 

loans into their menu of banking services.16 As part of this program, the bank designed Payday

Alternative Loans (PAL) around the FDIC’s affordable small dollar loan guidelines. These loans

are available for customers looking for smaller loans but who do not qualify for regular loans. PAL

allows first-time borrowers to borrow $300 to $600, which is repaid over the course of six months. 

Each customer can receive a maximum of three loans per year but can only have one PAL

outstanding at a time. The bank takes borrowers through counseling prior to getting the loan, but if 

a borrower exhibits a pattern of continual mismanagement, branch personnel will offer financial 

education and one-on-one budget counseling. Since the program’s launch in June 2007, the bank has 

closed one PAL. 

 

16 Key features of the FDIC Small Dollar Loan Pilot Program may include: loan amounts up to $1,000, amortization periods longer than a single pay 

cycle and up to 36 months for closed-end credit or minimum payments that reduce principle (that do not result in negative amortization) for openend credit, no prepayment penalties, origination and/or maintenance fees limited to the amount necessary to cover actual costs, and an automatic 

savings component. (For more information, see: http://www.fdic.gov/smalldollarloans/index.html.) 
 332 Case Studies 

Outreach to Military Personnel 

In May 2007, Citizens Union Bank acquired Fort Knox National Bank, now rebranded Fort Knox 

Bank, a Division of Citizens Union Bank. Seeking opportunities to serve members of the military at Fort 

Knox, the bank has begun offering small PALs at the branch. They have also created the Hero 

Rewards Account, designed specifically for members of the military. This interest-bearing checking 

account requires no minimum opening deposit, offers unlimited rebates on other bank’s ATM fees, 

provides direct deposit from Defense Finance and Accounting Service (DFAS) payroll accounts, and 

charges a $5 fee for balances below $100. As of June 10, 2008, the bank has opened 814 Hero 

Rewards Accounts. 

Financial Counseling for Mortgage Programs 

The bank offers mortgage programs to help otherwise ineligible homebuyers become qualified for 

home loans. Through a series of step-by-step educational programs, the bank provides applicants 

with vital information on how to handle loan products while assuring the bank that applicants 

possess the necessary financial understanding when considering their mortgage applications. 

The bank has also begun a pilot program which offers financial counseling to single parents seeking 

to become eligible for a home owner’s loan. As of June 2008, four single mothers have participated 

in the pilot program’s financial counseling program to qualify them to become homebuyers, and 

eight more applications to the counseling program are in progress. 

Regulatory Challenges 

Because the bank serves a community that includes a sizeable population of undocumented 

residents, bank employees face some challenges in providing the community with valuable financial 

services while continuing to respect the regulatory considerations and sensitivities involved. In 

accordance with the Bank Secrecy Act (BSA) and the U.S. Patriot Act, particularly the Customer 

Identification Program (CIP), the bank follows strict guidelines for identification and verification of 

potential customers. However, the bank recognizes the variety of identification types that exist and 

accepts Matrícula Consular cards, foreign government identifications, and Individual Taxpayer 

Identification Number (ITIN), in addition to more traditional forms of identification, for account 

opening. Citizens Union Bank also partners with its local consulates to help potential customers 

obtain Matrícula Consular cards and has sponsored consulate visits to the bank. 

Citizens Union Bank has also become an ITIN Acceptance Agent to help customers without Social 

Security numbers obtain an ITIN. Once customers have opened an interest-bearing account, they 

can obtain an ITIN through the bank without paying a fee for the service. 

III. Lessons Learned 

 Having bilingual employees has been the lynchpin of the bank’s success. Regardless of 

the products and services a bank has to offer, the ability to connect with the community and 

speak to them determines how well the products are received, understood, and handled. 
 333 Case Studies 

 Offering banking services in a more casual or convenient setting can help the 

unbanked and underbanked feel more comfortable using banking services. In addition 

to the specially designed and decorated Nuestro Banco, the bank also has a branch at a local 

Wal-Mart store in Shelbyville, which is a more convenient and comfortable setting to reach out 

to the unbanked and underbanked. The bank is also rebranding one of their current branch 

locations as a Citizens Union Bank and a Nuestro Banco, a Division of Citizens Union Bank. 

 Working with businesses and employers can present more opportunities to learn 

about, outreach, and cater to the needs of the community. The bank’s next area of focus 

is to work with local Hispanic businesses to help them with their unique funding needs and 

those of their employees. This will enable the bank to gain further traction and trust within the 

community and utilize another outlet to provide education and information. 

About Citizens Union Bank of Shelbyville 

Citizens Union Bank of Shelbyville is a $764 million financial institution headquartered in 

Shelbyville, Kentucky, a community of 10,085. The institution presently operates from 20 offices in 

seven counties throughout the Commonwealth of Kentucky, and is currently constructing its 21st

location in another county. Additionally, the bank operates 19 ATMs throughout its service area. 

The bank’s primary lending focus is construction, home mortgage, and commercial. 

Assets, $Th, as of September 30, 2008: $595,124 
 334 Case Studies 
 335 Case Studies 

Ridgewood Savings Bank 

Ridgewood Savings Bank’s approach to serving unbanked and underbanked communities focuses 

on increasing access to banking services and conducting outreach and education. Since 2006, the 

bank has opened two branches in Bronx neighborhoods with significant populations of unbanked 

and underbanked residents. In May 2005, Ridgewood launched a full-service mobile branch that 

brings banking services to people and places that otherwise would not have them, such as assisted 

living facilities. In addition, the bank offers an array of educational programs targeting first-time 

homebuyers, low-income residents, and students. 

“Our decisions are driven by a mutual philosophy to do what is right for our customers and community.” 

– Edward F. O’ Brien, Vice President and CRA Officer 

I. Target Population 

Until mid-2006, Ridgewood Savings Bank had 23 branches, all located on geographic Long Island 

(Brooklyn, Queens, Nassau, and Suffolk counties). As a result of long-range strategic planning, 

increased lending, and business opportunities, the footprint of the bank has expanded as of early 

2008. Specifically, the bank now has 36 branches spread among seven counties, including the 

additional Manhattan, Bronx, and Westchester branches. 

These changes required the bank to be proactive in its efforts to address the underbanked and 

unbanked. Ridgewood has always been sensitive to diversity since their service area included ethnic 

communities of African, African-American, Chinese, Croatian, German, Hispanic, Italian, Polish, 

and Romanian, Russian and Serbian immigrants. In consideration of the aforementioned expansion, 

the bank broadened its innovative approach via the strategies and initiatives described below, paying 

special attention to the Bronx, whose residents are largely of low- to moderate-income and where 

many neighborhoods are underbanked or unbanked. 

II. Initiatives 

New York State Banking Development District (BDD) Program 

In an effort to enhance service and access to unbanked/underbanked communities, Ridgewood 

Savings Bank participates in the New York State Banking Department’s Banking Development 

District (“BDD”) program. BDD designations are given to unbanked/underbanked communities 

with significant unemployment rates and a majority of Census tracts classified as low- to moderateincome. The objective of BDD branches is to bring banking services to these underserved areas and 

help banks effectively compete with alternative service providers as well as to provide avenues for 

unbanked individuals to enter the financial mainstream and stimulate long-term economic and 

community development. The New York State BDD designation provides participating banks 

throughout New York City with state and local incentives, allocating more than $100 million in 

public funds deposits for new BDD branches, property tax reductions for the branches, and 

assistance in locating suitable commercial space. 
 336 Case Studies 

Responding to this opportunity to serve unbanked and underbanked communities with support 

from local stakeholders such as the Borough President’s Office and Community Boards, Ridgewood 

Savings Bank successfully applied for the BDD Initiative. As a result, Ridgewood Savings Bank 

received two of the three BDD designations granted in the Bronx service area and opened two 

branches. In September 2006, the bank opened its White Plains Road Branch, followed by its 

Soundview Branch in April 2007. The Bank continues to build upon its presence in the market and 

increase its customer base but notes that it faces a “challenging environment.” These branches are 

located in a low- to moderate-income level area, which consequently results in low balances in 

checking and savings accounts. Nevertheless, Ridgewood Savings Bank emphasizes that it maintains 

a long-term commitment to developing its BDD branches and to serving these communities. 

Mobile Banking Center 

In May 2005, Ridgewood Savings Bank introduced a Mobile Banking Center to serve residents who 

are unable to access banking services due to mobility constraints or distance from brick-and-mortar 

branches. The Mobile Banking Center’s motto, “Bringing the Branch to You,” encapsulates its 

objectives and capabilities. Customers can open accounts and conduct transactions at the full service 

Mobile Banking Center, which is also equipped with an ATM. In order to offer a full range of 

products and services, the bank submitted a branch application with the FDIC and the New York 

State Banking Department for approval. As a result, the Mobile Banking Center is considered an 

official branch of Ridgewood Savings Bank and has $3 million in deposits as of July 2008. The 

custom-built, handicap-accessible Mobile Banking Center currently visits 15 sites, mainly senior 

citizens’ residences, on a bi-weekly basis. Visits by the Mobile Banking Center will vary from 90 to 

120 minutes, depending on the amount of banking activity at each facility. Occasionally, a facility is 

selected due to the close proximity to a full-service branch and, therefore, many residents can 

continue to enjoy a banking relationship with Ridgewood by means of the Mobile Banking Center. 

Residents are made aware of the Mobile Banking Center’s scheduled visits through weekly 

announcements made by the facility. The branch employs a full-time staff of one assistant manager 

and two savings counselors. While the Mobile Banking Center is not very profitable, bank 

management believes that the value delivered to the community justifies and validates the continued 

investment. Mobile branch employees note that customers appreciate having their “financial 

independence” and the ability to access the many banking services. As a result, the Mobile Banking 

Center staff has developed a strong relationship with the residents as well as the staff members of 

these facilities. 

Financial Literacy and Outreach Programs 

Beginning in 1999, Ridgewood Savings Bank has offered First Time Homebuyers’ Workshops to 

help individuals make informed decisions regarding mortgages and home purchases. To market its 

workshops, the bank places advertisements in local community newspapers, inviting individuals to 

attend regardless of their banking relationship. The bank also provides free refreshments and 

giveaways to attract attendees. Each two-hour workshop includes presentations from an attorney on 

the legal aspects of home ownership, an engineer on home inspections, and a mortgage consultant 

on the application and qualification process. Workshops conclude with a question and answer 

session, and attendees receive informational booklets and bilingual materials created by Ridgewood 

Savings Bank. The Bank has conducted over 75 workshops, with an average of 35 attendees in lowto moderate-income communities and 15 attendees in more affluent neighborhoods. 
 337 Case Studies 

Since 2005, Ridgewood Savings Bank has partnered with local elementary, middle, and high schools 

to educate students about personal finance and savings through the ABA Education Foundation’s 

“Teach Children to Save Day.” To date, these outreach efforts have reached 3,200 students in 27 

public and private schools in the bank’s service area. The bank has also implemented a banking 

program at a number of schools to teach students how to manage bank accounts and to encourage 

regular deposit and savings habits. Through this program, students can open a savings account with 

no minimum deposit. Teachers collect students’ deposits on a periodic basis, and bank messengers 

transfer them to the local branch for deposit into student accounts. As of August 2008, Ridgewood 

Savings Bank maintains over 3,220 accounts through its school banking program, amounting to 

$1.15 million. In addition, the bank has taken opportunities to conduct outreach sessions for 

parents. Leveraging its relationship with local schools, Ridgewood Savings Bank has conducted 

educational programs for parents during PTA meetings. 

In 2008, the bank began a partnership with ARIVA, a Bronx-based nonprofit organization 

specializing in financial services and education for low-income residents. Ridgewood Savings Bank 

hosted ARIVA Free Tax Preparation Day at its two Bronx BDD branches. ARIVA provided IRScertified tax preparation professionals to offer free services to Bronx residents earning annual 

income of $45,000 or less. The bank assigned three employees at each location to develop rapport 

with attendees, cross-sell relevant banking products, and engage in subtle marketing for the bank. 

As a result of these events, ARIVA staff processed a total 80 tax returns amounting to $120,000 in 

refunds. Encouraged by the program’s success and the potential outreach opportunities, Ridgewood 

Savings Bank plans to offer ARIVA Free Tax Preparation Day in three or four branches in 2009. 

Ridgewood Savings Bank also offers “Money Matters” workshops to the general public. During 

these one-hour educational sessions, branch employees present information on the benefits of 

deposit accounts in comparison to check cashing services, the importance of savings in reaching 

financial goals, account management, and information about obtaining a mortgage. Introduced in 

early 2008, the bank has conducted four workshops at branches located in low- to moderate- income 

areas, attracting an average of 25 attendees per session. 

Multicultural Marketing 

Ridgewood Savings Bank’s branch locations span a diverse array of ethnic communities throughout 

the New York City metropolitan area, with significant populations of immigrant families in its 

service areas. In order to provide services for these non-English speaking communities, the bank 

creates in-language print ads for various local ethnic newspapers. Additionally, the bank has created 

Spanish radio and cable TV commercials which are broadcast on Spanish radio and cable TV 

stations. Telephone and ATM banking services, as well as its website, are also available in Spanish. 

The bank currently has employees who speak a total of eight foreign languages. However, changing 

demographic trends and greater emphasis on outreach to unbanked immigrants has resulted in the 

need for even more bilingual staff. In response, Ridgewood Savings Bank has modified requirements 

for new hiring at branches located in ethnic neighborhoods or areas with sizeable immigrant 

communities. Job applicants must speak the language of the predominant ethnic population in a 

particular branch’s footprint. The bank cites these efforts as an integral part of its outreach and 

service to the unbanked and underbanked. 
 338 Case Studies 

III. Lessons Learned 

 Opening branches in underserved communities improves access to banking services. By 

establishing a physical presence in these neighborhoods, the bank has increased its visibility and 

convenience of providing products and services. The bank can demonstrate the benefits of 

establishing banking relationships in direct competition to alternative service providers in the 

branch’s footprint. 

 Combining local and state initiatives with internal business strategies to reach 

underbanked populations can help banks establish relationships with unbanked 

individuals. The bank’s BDD branch designation is a critical component in its efforts to deliver 

beneficial banking services to underserved consumers and provide additional government 

resources and guidance that facilitate bank profitability and presence in these communities. 

 Maintaining ongoing dialogue with the community helps the bank assess and evaluate 

the effectiveness of its programs and offerings within each branch footprint. The bank 

relies on its strong relationships with community organizations and neighborhood presence to 

identify each community’s needs and to address them accordingly. 

 Flexibility to continually adapt to changing demographics is necessary in order to offer 

valuable and relevant services to its customers. In a dynamic setting like the New York City 

metropolitan area, the ability to remain attuned and flexible to change helps the bank attract new 

groups of unbanked and underbanked individuals. 

 

About Ridgewood Savings Bank 

The largest mutual savings bank in New York State and the second largest in the nation, Ridgewood 

Savings Bank was established in 1921. Headquartered in Ridgewood New York, the bank operates 

36 branches in Queens, Brooklyn, the Bronx, Manhattan, Nassau, Suffolk, and Westchester 

Counties. This network includes a Mobile Banking Center introduced in 2005 and 12 branches 

resulting from the acquisition of City and Suburban Federal Savings in July 2007. In addition, the 

bank operates a consumer loan center, two mortgage loan centers, and a retirement plan service 

center. 

The bank offers a variety of consumer and commercial credit and deposit products, as well as 

financial services. Available loan products include one to four family residential mortgages, multifamily mortgages, cooperative loans, commercial real estate loans, home equity loans, and consumer 

loans. Examples of deposit account offerings include regular savings, club accounts, checking 

accounts, money market accounts, certificates of deposit, and individual retirement accounts. Other 

services include direct deposit and safe deposit box rental, as well as, the sale of travelers’ checks, 

money orders, and United States Savings Bonds. The bank faces intense competition in its service 

area from many large money-center institutions, national and regional banks, savings and loan 

associations, credit unions and mortgage brokers. 

Assets, $Th, as of September 30, 2008: $4,101,225 
 339 Case Studies 

Second Federal Savings of Chicago 

Headquartered in the South Side of Chicago, Second Federal targets the Mexican immigrant 

community. Second Federal was one of the first banking institutions in the United States to accept 

the Matrícula Consular card as a valid form of identification. In order to serve unbanked and 

underbanked populations, the bank provides money transfer and bill payment services to nondeposit customers. Second Federal also developed a remittance product based on a dual ATM card 

program. 

“We are focused on understanding and serving the changing needs of our community; we have the ability to recognize 

when outside influences affect us and transition with them.” - Mark T. Doyle, CEO and Chair 

I. Target Population 

Understanding the Mexican Immigrant Population 

In 1992, Second Federal’s management determined that there was an adequate business case for 

targeting its marketing efforts solely to the Mexican immigrant community, which now comprises its 

primary customer base. The bank closed two branches located in more affluent, less diverse 

neighborhoods and opened a new branch in the suburb of Cicero, which has a significant Mexican 

immigrant population that has increased from 40 percent Mexican to 80 percent since the branch’s 

opening. 

In an effort to deepen its understanding of this segment, the bank engaged a research firm to study 

the changing demographics of the Chicago Metropolitan Area and consequently discovered that 48 

percent of residents within its branch network were undocumented immigrants, and therefore 

unlikely to be banked. Through its knowledge and understanding of the market, Second Federal is 

more responsive to the needs of its community. As a result, free services such as money orders and 

utility bill payments have become principal offerings to bank customers. 

In the past five years, bank employees have noted that the Mexican immigrant community has 

become increasingly aware of banking services and their value. The education and assimilation of 

second and third generation immigrants have contributed to the community’s increased 

understanding of and receptiveness to banking. Increased competition has also played a major role 

in driving this change. In a community of 175,000 residents, several larger banks have entered the 

market. These banks have undertaken initiatives to provide education, targeted marketing, and 

product offerings to the local Mexican immigrant population, thereby escalating the community’s 

level of sophistication toward banking services. In response, Second Federal has also begun to offer 

a broader range of services, including internet banking, interest bearing checking accounts, bill pay 

services, and credit cards, while continuing to cater to first generation immigrants and those who are 

still unbanked and underbanked. 
 340 Case Studies 

II. Initiatives 

Matrícula Consular 

Obtaining a Matrícula Consular card is a top priority for undocumented individuals because it is a 

form of identification they can use to open deposit accounts and to obtain an Individual Taxpayer 

Identification Number (ITIN). Understanding the importance of the Matrícula Consular card to the 

community, Second Federal has built a strong relationship with the Consulate to facilitate the 

identification process and invites the Mexican Consul to its branch locations for the purpose of 

issuing Matrícula Consular cards. 

Individual Taxpayer Identification Number (ITIN) 

Second Federal has also registered with the IRS to become an ITIN acceptance agent. Customers 

who have an account at the bank can obtain an ITIN at bank branches free of charge. The Mexican 

immigrant community has responded positively to this initiative. Within the first year of offering this 

service, the bank opened nearly 600 bank accounts. Although, many clients already obtained ITIN 

numbers, the vast majority were a result of the acceptance agreement with the IRS. These customers 

have since become part of Second Federal’s regular customer base. The program’s success garnered 

attention in the wider banking community, and Second Federal participated in the Federal Reserve 

Bank of Chicago’s monthly seminars to inform other banks about ways to reach out to the 

unbanked population. 

Extended Hours 

Second Federal’s locations are open seven days a week. Through the addition of walk-up and drivethru operations at its facilities, the bank serves customers until 7:00 p.m. Monday through Thursday, 

8:00 p.m. on Friday, 4:00 p.m. on Saturday and 2:00 p.m. on Sunday. The extended business hours 

accommodate customers who cash payroll checks on Friday evenings and Saturday, when volumes 

tend to be highest. Although the bank’s extended hours cater to customer banking preferences, it 

has not differentiated Second Federal in its service area because many of its competitors are also 

open every day of the week. 

Dual ATM Card Program 

In 2001, Second Federal introduced a lower cost method to send money to Mexico and other 

countries through the use of dual ATM cards, believed to be the first program of its kind in the 

United States. Customers can send one ATM card to relatives in their home country, which enable 

them to withdraw funds directly from the account and eliminate the need to use wire transfers. 

Second Federal’s fee ranges from $1.50 to $2.00, substantially lower than the $20 to $30 typically 

charged by alternative providers.
 341 Case Studies 

Check Cashing 

Although Second Federal offers check cashing for individuals without account relationships, the 

bank recognized that many residents in the community prefer to cash their checks at local 

businesses, such as grocery stores. Second Federal has begun to receive more business from small 

businesses and is now registering them as money service businesses, with the bank accepting double 

endorsed checks. 

ITIN Loans 

Second Federal began to aggressively market ITIN loans in the first quarter of 2004. At that time, 

private mortgage insurers would not provide coverage for this product. Moreover, there was not a 

secondary market available to buy them. The bank believed, however, that the market was 

composed of creditworthy borrowers. When the bank first added ITIN loans to its portfolio, it 

faced a number of challenges. First, they needed to design the program and underwrite the loan, 

which required six hours per loan. Second, the product was so well-received by the community that 

the number of loan applications overwhelmed the bank. With over $40 million in its pipeline for 

applications, the bank was unable to handle the volume. Finally, the rapid growth of product 

originations and corresponding regulatory scrutiny necessitated discussions between the bank and its 

regulator with regard to the purpose and direction of the product. The bank’s ability to resolve these 

issues allows them to continue offering ITIN lending today, which currently totals $70 million in its 

portfolio. However, because of factors relating to the uncertainty of immigration reform, as well as 

economic factors, delinquencies are expected to become a major concern. As unemployment rises, 

many undocumented borrowers may be unable to keep their mortgages current. This market is not 

insolated from the many problems in today’s economy. 

Education and Outreach 

In addition to outreach efforts to non-English speakers and first generation immigrants, the bank 

has also begun focusing on the large and emerging second generation, who tend to be bilingual and 

have a better grasp of banking concepts. Targeting this more educated and more assimilated 

generation has become an important part of the bank’s outreach efforts, as it represents a market for 

which the bank wants to develop products and services that will bring immigrants into the banking 

mainstream. 

While their parents and grandparents may come from a culture where a very large percentage of the 

population is unbanked and not familiar with basic banking concepts, the second and third 

generations are more likely to be accustomed to the idea that finances should be handled through 

bank accounts and hence to ultimately become part of the banking mainstream. Furthermore, the 

younger generation’s access to and skills in using technology create more avenues to utilize banking 

products and services. Adapting to the community’s increased gentrification and technology savvy, 

the bank has worked with community groups to develop a Spanish-language curriculum for teaching 

individuals to use internet banking services. The evolution of education and outreach programs is 

driven by Second Federal’s larger goal to offer the types of services and products needed by the 

community. 
 342 Case Studies 

Regulatory Challenges 

Second Federal determined that for their market a crucial part in understanding their customer base 

was recognizing that the unbanked and the undocumented were virtually the same. As a result of 

local municipalities passing their own immigration regulations, the bank reports that many 

immigrants have become reluctant to save money in banks and use banking services. 

III. Lessons Learned 

 The first and most important step in serving the unbanked and underbanked is to 

understand the needs of your market. For Second Federal Savings, hiring a research firm to 

study its market area provided valuable insight that informed the types of products and services 

that should be offered.

 Recognize changes and obstacles in your market and address them accordingly. Shifting 

demographics as well as external factors (e.g., economic, state, and federal regulations, 

competition) can dramatically change the marketplace and affect a bank’s ability to serve its 

community. The ability to remain cognizant, flexible, and innovative enables banks to 

effectively modify their focus and better serve their communities. 

 A major part of Second Federal’s success has been its efforts to assist the broad range of 

unbanked immigrants who want to have a banking relationship. For Mexican immigrants, 

obtaining the Matrícula Consular card and ITIN is a crucial step in the path to becoming 

banked. The bank’s willingness to facilitate the issuance of these important forms of 

identification on-site at no charge and to accept them as sufficient identification for new account 

opening removes significant obstacles for the unbanked. 

About Second Federal Savings of Chicago 

Second Federal Savings is a $256 million financial institution with five offices and seven ATMs 

located in Chicago. It has served the financial needs of its local communities for the past 125 years, 

and the Mexican immigrant population since their arrival in the late 1960s. In 1992, the bank 

officially decided to market its services solely to the immigrant population, both documented and 

undocumented. 

Assets, $Th, as of September 30, 2008: $258,896 
 343 Case Studies 

Banks’ Efforts to Provide Products and Services 

Objective 1 – Chapter 4

Education and Outreach 

Objective 2 – Chapters 5-7

Obstacles and Access 

Objective 3 – Chapters 8-11

Products and Services 

Identify and quantify the extent to 

which insured depository 

institutions outreach, serve, and 

meet the banking needs of the 

unbanked and underbanked. 

Identify challenges affecting 

the ability of insured 

depository institutions to 

serve the unbanked and 

underbanked, including but 

not limited to cultural, 

language, identification 

issues, and spatial/location 

issues. 

Identify innovative efforts 

depository institutions use to 

serve the un/underbanked, 

including small dollar loans, 

basic banking accounts, 

remittances, and other lowcost accounts, products and 

services used by the 

un/underbanked. 

• Retail Branch Information 

• Services Provided to NonCustomers 

• Account Opening & 

Onboarding 

• Deposit Products 

• Savings Accounts 

• Payment Products 

• Credit Products 

Case Study 

Examples 

Case Study 

Examples 

Case Study 

Examples 
 344 Case Studies 

Products and Services 

Five case study banks offer innovative transaction products, credit, and asset-building products that 

meet the needs of unbanked individuals and serve as a mechanism for entering the economic 

mainstream. 

Institution Target Population Products 

Artisans’ Bank 

(Wilmington, DE) 

Low- to moderate-income 

individuals in their area with 

poor credit history or past 

experience with financial 

mismanagement 

 Credit Builder Program provides a 12-month loan while 

customers place proceeds in deposit account held as 

collateral and replay loan from cash flow. 

 Delawareans Save IDA helps customers set and achieve 

monthly savings goals over three-year period and 

provide up to a 3:1 match if savings targets are met. 

Bancorp South 

(Tupelo, MS) 

African American and 

Hispanic American 

communities of urban and 

rural markets in the South 

 Second Chance Checking restricts access (check writing 

and debit cards) for customers ineligible for standard 

checking product. 

 Smart Saver IDA combines a mortgage and a savings 

product with eight hours of financial education to 

provide resources toward purchase of home. 

Carver State Bank 

(Savannah, GA) 

Multi-cultural community in 

Savannah, including African 

Americans, Hispanics, 

Iranians, and Chinese 

 Small Business IDA provides 4:1 match to local 

entrepreneurs and requires applicants to take classes and 

develop business plan to qualify. 

 Credit Rebuilder Loan pairs loan of $1,000 to $10,000 

with CD; approval based on debt to income ratio rather 

than credit history. 

Central Bank of Kansas 

City 

Kansas City, MO) 

Diverse immigrant and 

minority population, including 

African Americans, 

Vietnamese, Sudanese, and 

Mexicans 

 Payroll Cards allow low- to moderate-income employees 

to receive income without needing to cash checks or 

access to direct deposit while preventing them from 

overdrawing on account and incurring NSF or merchant 

fees. 

KeyBank 

(Cleveland, OH) 

Low- to moderate-income 

populations, including African 

Americans, Hispanic 

Americans, working poor, and 

urban residents 

 Low-cost (1.5 percent up to $22.50) check cashing 

services for non-depository clients bring unbanked into 

branches and create opportunities to transition them to 

deposit accounts; biometric technology verifies 

customer identity, lowering cost and increasing 

efficiency. 

Common Lessons Learned 

 Entry-level products provide valuable opportunities for unbanked individuals to re-establish credit-worthiness and reenter the economic mainstream while increasing control and reducing risk to banks. 

 Rather than closing accounts due to mismanagement, second chance accounts help banks retain existing customers. 

 The advantages of beneficial and relevant banking products, when compared to alternative service providers, pose an 

important value proposition for unbanked individuals. 

 Banks can better serve unbanked and underbanked consumers by developing debit card-based accounts and prepaid 

cards to meet their needs. 
 345 Case Studies 

Artisans’ Bank 

Artisans’ Bank offers a Credit Builders Program targeted to low- and moderate-income borrowers 

with less than perfect credit. The proceeds of a small dollar loan are deposited into an Artisans’ 

Bank savings account, which serves as the collateral. Artisans’ Bank also offers free checking 

accounts and individual development accounts for low- and moderate-income consumers. In 2003, 

the bank started a “branch” at an elementary school where fourth graders learn about savings and 

make weekly deposits. Artisans’ Bank is also active in providing financial education through its 

partnerships with the City of Wilmington and the Delaware Money School. 

“We take a hard look at what we can do to make a difference in our community; even though we lack the ability as a 

small bank to say ‘yes’ to every request that comes our way.” – Joel Schiller, CRA Officer

I. Target Population 

Artisans’ Bank does not engage in targeted marketing and direct outreach to the unbanked and 

underbanked. Instead, the bank promotes its innovative products and services through partnerships 

with community organizations and assistance agencies, such as the YWCA of Delaware, Boys and 

Girls Clubs, and the Delaware CRA Council, that serve the unbanked and underbanked populations. 

Artisans’ Bank provides general banking information and personnel support on financial education 

and banking products to the organizations, which refer potential clients to the bank. This 

partnership model enables Artisans’ Bank to develop relevant products while utilizing community 

organizations’ deep relationships and experience with the target population to effectively educate 

and outreach to unbanked and underbanked individuals. 

II. Initiatives 

Credit Builder Program 

Artisans’ Bank designed a Credit Builder Program for potential homebuyers needing assistance to 

become creditworthy. The Credit Builder Program enables individuals to build savings and 

accumulate funds to meet down payment or settlement cost responsibilities. Artisans’ Bank funds a 

12-month loan between $500 and $2,000 and places the proceeds in a deposit account, which is held 

as collateral. Customers repay the loans on a monthly basis from their cash flow. Interest is fixed at a 

flat 9 percent rate, and the bank waives all other fees. By making loan payments to their savings 

account, customers develop a routine of saving. At the end of the year, customers receive their 

deposit principal plus accrued interest earned on the deposit account. To date, Artisans’ Bank has 

not reported any defaults on Credit Builder Program accounts. 

When the product matures and the loan is paid off, customers are encouraged to maintain their 

banking relationship and continue building assets through regular savings habits. Branch personnel 

make the effort to contact each Credit Builder Program customer individually by letter or by 

phone. In most cases, the bank has found that spending a few minutes with customers to inform 

them of both the opportunities and benefits of continuing their banking relationship has been 

successful in retaining customers. 
 346 Case Studies 

Artisans’ Bank does not market its Credit Builder Program directly to the public. Instead, the bank 

promotes the product through community organizations and social service agencies that work with 

financially challenged individuals. The bank provides information to the organizations about the 

products and services available to the unbanked and underbanked and leverages these relationships 

to receive referrals for potential customers. For example, Credit Builder Program’s initial 

customers were individuals who were working toward first-time home ownership and were referred 

by housing counseling agencies in the community. The bank also encourages agencies to establish 

and maintain mentoring relationships and to educate their clientele about fiscal responsibility and the 

importance of saving. Strong relationships with community agencies have helped Artisans’ Bank 

outreach to the unbanked and underbanked, and as a result, the Credit Builder Program product 

has been well-received, averaging 25 to 50 accounts per year. 

Artisans’ Bank credits the product’s success to three main factors. First, customers are required to 

become educated on Credit Builder Program before opening an account. Second, community 

agencies play a crucial role in referring clients whom they deem to have the potential to use the 

product successfully. Third, the bank recently shifted its focus to giving customers with no credit or 

severely damaged credit the opportunity to establish or restore a more positive record on their 

consumer report. Credit Builder Program provides customers who intend to return to the banking 

mainstream an opportunity to re-establish disciplined and structured banking habits. 

SEED Accounts 

In a partnership with a local inner-city Boys and Girls Club, Artisans’ Bank sponsors a youth savings 

program, called the SEED Initiative (Saving for Education, Entrepreneurship, and Development). 

Led by the Corporation for Economic Development (CFED), the Center for Social Development at 

Washington University in St. Louis, the Initiative on Financial Security of the Aspen Institute, the 

New America Foundation, and the University of Kansas School of Social Welfare, the program 

began as a national pilot program operated by the Boys and Girls’ Club with an investment banking 

house. When that institution found the program to be too burdensome to continue, Artisans’ Bank 

assumed administrative responsibilities for the accounts in 2006, accepting and housing the 65 youth 

accounts in the program. Similar to an IDA, SEED Accounts are deposit accounts geared to 

middle school students that encourage regular deposits and restrict withdrawals. Upon reaching the 

age of 18, the students will receive matching funds of deposits made over the course of their school 

years. The SEED Initiative is funded by the Ford Foundation, the Schwab Foundation, and nine 

other foundations. 

Delawareans Save IDA 

Through the Delawareans Save IDA initiative, Artisans’ Bank will process over $1.5 million of 

public and private sector money in matching funds to low- and moderate-income savers who have 

participated in this structured asset-building savings program conducted by the First State 

Community Loan Fund. Previously offered by the bank in conjunction with the YWCA, the 

Delawareans Save initiative involves consumers who agree to participate in financial literacy 

classes, save between $1,500 and $3,000 over a three-year period, make monthly deposits, and 

refrain from withdrawing money unless for emergencies, which require dual authorization from local 

agency and bank personnel. Many of the product’s customers are minorities based in urban settings, 

including single parents. 
 347 Case Studies 

If customers achieve their pre-established savings goal, they receive additional funding at the end of 

three years, up to a 3:1 match. Thus, customers have an additional incentive to save on a monthly 

basis. If customers fail to save monthly, they are removed from the program. Delawareans Save 

IDA has been met with great success, and the bank has received three more rounds of government 

funding due to the volume of account openings. Now in its fourth IDA round, the program has 

served over 1,000 consumers. 

The bank has also created a parallel savings account for IDA customers. This enables IDA 

customers to deposit into a savings account other than their IDA. In emergency situations, 

customers can obtain funds by tapping their parallel savings account instead of withdrawing money 

from their IDA and thereby violating the terms of the Delawareans Save IDA program. 

Education and Outreach 

Like other small community banks, Artisans’ Bank faces the challenge of not having a full-time CRA 

officer and limited internal resources to devote to market their CRA programs or perform consumer 

education. The bank recognizes the value and importance of education to the unbanked and 

underbanked community. Education and literacy programs provide the understanding and guidance 

that individuals need to properly handle the responsibilities of having a bank account and avoid 

fraud or mismanagement. 

Educational sessions are generally one-on-one. Employees involved in the retail and accountopening side of the bank, such as Customer Service Representatives or Managers, usually conduct 

the sessions and generally use materials created by other banking or community organizations. 

Artisans’ Bank relies on partnerships with third-party organizations in its education and outreach 

efforts, working with community agencies on different programs and local savings incentives such as 

the Delaware Financial Literacy Institute. To maximize the impact of these programs, the bank 

stresses the effectiveness of educational sessions held on a recurring basis, much like a school 

curriculum, rather than a single two-hour class. Repetition and reinforcement of knowledge over the 

course of many months and meetings increases the likelihood of raising awareness, and the bank 

actively seeks to partner with agencies that already have these types of programs in place. 

III. Lessons Learned 

 Offering education in a series of classes, rather than as a single session, is a more 

successful and effective approach to promoting financial literacy. Reinforcing information 

improves individuals’ ability to retain and apply it to financial decision-making.

 Incorporating education into targeted products for the unbanked and underbanked 

improves their potential for success. The bank requires an educational component to its loan 

and IDA products because education equips customers with the knowledge and discipline to 

responsibly handle products and to re-enter the banking mainstream. 
 348 Case Studies 

 Partnerships with other community organizations toward a common objective can 

supplement and complement bank initiatives to outreach and serve the community. 

Community agencies interact regularly with potential customers and become a valuable source 

for insight into the needs of the community. They can also be an important partner in education 

programs and provide referrals for tailored products offered by the bank. 

About Artisans’ Bank 

Artisans’ Bank is a mutually owned, full-service commercial bank. The bank is headquartered in 

Wilmington, New Castle County, Delaware. As of December 31, 2007, Artisans’ Bank’s assets 

totaled $592.4 million. The bank currently operates 13 branch locations in Delaware; nine branches, 

including the main office branch, are located in New Castle County, two branches are located in 

Kent County, and two branches are located in Sussex County. The bank also operates three loan 

production offices, with one in each county. 

Assets, $Th, as of September 30, 2008: $596,298 
 349 Case Studies 

BancorpSouth 

Outreach and financial education are at the core of BancorpSouth’s efforts to serve the local 

unbanked and underbanked population, with programs conducted in and tailored to each market. 

The bank also offers a Second Chance Checking product designed to assist people who have 

struggled with successfully maintaining a checking account in the past, affordable mortgage products 

targeted to customers with blemished credit, and free tax preparation at VITA sites. The bank 

employs bilingual, Spanish-speaking staff at branches located in areas with a sizable Spanishspeaking population. 

“We’re a community bank, and we’re very much focused on the communities that we’re in. That’s how we make a 

name for ourselves and carry out education programs.” 

- Monica Aldridge, First Vice President 

I. Target Population 

BancorpSouth focuses marketing and outreach efforts to urban, rural, African-American, and 

Hispanic-American segments in its service areas. The Hispanic population, in particular, has become 

an important demographic for the bank due to the growth of this community and its heavy 

concentration of unbanked and underbanked individuals. Within these population segments, 

BancorpSouth targets unbanked and underbanked adults with ties to community organizations, as 

most outreach efforts are conducted in partnership with and at the site of local nonprofit 

organizations, government assistance agencies, and adult education centers. 

II. Initiatives 

Education and Outreach 

BancorpSouth reports that it has been carrying out extensive outreach programs in its community 

since 1993. The bank states that it “desires to help the unbanked and underbanked obtain credit and 

become better banking citizens,” and basic financial education serves as the crucial first step in this 

process. Bank employees observe that many of these individuals do not use banks for their financial 

transactions because they are not aware of the products and services available to them. They do not 

know that banks offer more than just checking and savings accounts but also insurance, mortgages, 

and other loans. Bridging this information gap has become a primary focus in the bank’s efforts to 

bring the unbanked and underbanked into the economic mainstream. 

The bank’s education and outreach program began as a way to help first-time homebuyers attain the 

financial literacy certification required for some loan applications in BancorpSouth’s markets. By 

partnering with local governments and nonprofit organizations, the bank created an educational 

program that enabled people to successfully secure funds to purchase a home. 
 350 Case Studies 

Today, each of BancorpSouth’s main offices conducts at least two education programs annually, 

with many exceeding this minimum. More than 680 financial education programs reaching more 

than 40,000 individuals were conducted from September 2007 to June 2008. While the needs of each 

community within the institution’s service area vary, efforts usually focus on K-12 schools and adult 

education programs. Hundreds of employees across the organization are involved with education 

programs, with at least one employee working on these initiatives at each location. 

Because the FDIC’s Money Smart curriculum is written at a level that can be understood by a wide 

range of audiences and is readily accessible to banks, BancorpSouth uses the curriculum universally 

as the foundation of its educational programs for middle school and high school students as well as 

for adults. The bank’s own brochures, which are distributed as financial education materials, can also 

be used by audiences of varying ages and reading levels. The educational brochures detail products 

available to the unbanked and underbanked and also cover topics such as identity theft, fraud alerts, 

and online fraud. To serve the Spanish-speaking community, the bank also offers 11 Spanishlanguage educational brochures that provide information on checking and savings accounts, 

mortgage loans, bank fees, and other subjects. 

The bank asks all main locations to offer at least one education session focusing on home ownership 

in order to educate community members about down payment assistance and the bank’s IDA 

product. However, local branches also have flexibility to develop and conduct additional sessions on 

other topics, such as checking, savings, and identity theft prevention. 

BancorpSouth reports that a major key to its success in reaching out to adults has been the decision 

to hold more programs outside of bank branches. The bank has found that branch-based programs 

attract very few attendees, if any. Branch employees note that this is likely due to apprehension 

toward bank facilities felt by unbanked and underbanked individuals. By relocating education 

programs to churches and community centers, bank employees have experienced greater 

receptiveness and found more opportunities to educate the unbanked and underbanked. Typical 

outreach programs average 20 attendees, with some attracting nearly 400 people. 

Branch personnel coordinate with local pastors, work with the community’s Head Start Center to 

reach out to parents, collaborate with the Department of Human Services to identify people on 

temporary or welfare assistance, or partner with nonprofit organizations like Habitat for Humanity 

to introduce home ownership programs and other banking products and services to clients. Most 

programs include refreshments to accommodate attendees coming after work and offer door prizes, 

which can be helpful for encouraging attendance. 

Recently, the bank has begun working with employers to bring financial education to the workplace. 

During bank-sponsored lunches, branch personnel provide valuable information on topics for 

employees, such as investment and 401(k) plans, in a convenient time and place. These lunchtime 

sessions typically last 30 to 45 minutes and are held on a monthly or quarterly basis. Employers do 

not need to be business customers of BancorpSouth to arrange employee education sessions. The 

bank also works with local government groups, such as the police and fire departments, to offer 

similar educational programs. 
 351 Case Studies 

For youth outreach, branches work with local schools to organize “Teach Children to Save Day” 

and utilize a variety of materials from the American Bankers Association, National Jump$tart’s 

“Personal Finance Curriculum,” and Bank of America’s “Financial Fitness for Life.” Branch 

personnel may take the initiative to design more creative programs, using puppet shows, stories 

incorporating the Berenstein Bears, or skits starring the employees. BancorpSouth cites its longstanding relationship with local schools as an integral part of their success, since it enables branches 

to easily contact teachers and organize educational visits. 

Although the bank lacks a formal tracking system to measure the results of its outreach efforts, 

employees observe a general correlation to the bank’s success in customer acquisition, which further 

motivates their efforts to deliver value and benefit to the community. Furthermore, BancorpSouth 

cites that financial education and outreach allows the bank to make direct contact with potential 

customers and inform unbanked individuals of what BancorpSouth can offer them. These efforts 

play an integral role in expanding the bank’s customer base and, therefore, its business. 

Second Chance Checking 

In January 2007, BancorpSouth introduced a transitional checking product, Second Chance 

Checking, which sought to address the needs of a segment of the population that had mismanaged 

checking accounts in the past but wanted to return to the banking mainstream. 

When Customer Service Representatives find that a potential customer is ineligible for a standard 

checking account, they offer Second Chance Checking as a way to facilitate moving back into a 

regular checking product. Typically, Second Chance Checking customers have ChexSystems 

screenings that are not high enough to qualify for the bank’s standard checking product but have not 

had fraud, closures, or negative history in the past three years. For a $6.99 monthly fee, the product 

allows customers to write checks and use debit cards. After one year, Second Chance Checking

customers with good history are eligible for a standard free checking account. As of December 31, 

2007, the bank reported 1,537 Second Chance Checking accounts, with most customers 

transitioning to regular checking after one year. 

Loan Programs 

On the credit side, BancorpSouth helps unbanked and underbanked individuals borrow needed 

funds for home purchases through a combination of loans, counseling, and financial education. 

Once a customer is pre-approved for a home purchase loan, the bank will offer income-qualified 

customers the opportunity to also open a Smart Saver Individual Development Account (IDA), 

which is similar to a money market account. In addition to combining mortgage products with a 

savings product, the program also includes eight hours of financial education to ensure that 

customers understand how to handle the products. While there are restrictions tied to the account to 

discourage early withdrawal of funds, the account proves to be a useful tool in assisting customers 

with reaching their savings goals. A five-year deed restriction, which is a condition of receiving 

matching funds under the Smart Saver program, encourages customers to focus on long-term wealth 

building. 
 352 Case Studies 

Not only are customers eased back into the banking mainstream through improved awareness and 

responsibility, they also receive funds toward the purchase of a home. To further encourage 

customers to save and to make progress toward achieving their goals under the Smart Saver IDA, 

the bank offers a 3:1 match toward a home purchase to be used for down payment and/or closing 

costs once customers save $1,000 in 12 months. In 2007, ten customers participated in the loan 

program, and BancorpSouth has already exceeded this number through the first half of 2008. 

In addition, the loan program can be used in conjunction with the Federal Home Loan Bank HELP 

grant program in which a first-time homebuyer agrees to education and a five-year deed restriction. 

Customers applying for Federal Home Loan Bank HELP grant money can qualify for up to an 

additional $7,000 toward their down payment and closing costs. As of June 2008, the bank has 

already awarded all of the Federal Home Loan’s $60,000 allocation. (For 2008, Federal Home Loan 

Bank of Dallas allocated $60,000 to each Member Bank for HELP grant funding.) In some areas, 

customers can pair BancorpSouth’s products with state programs to secure more funds. In total, 

some homebuyers can potentially receive over $20,000 toward the purchase and closing of their new 

home. 

III. Lessons Learned 

 Unbanked and underbanked individuals do not use banking services because they are 

often unaware of what is available, and relying solely on marketing efforts often fails to 

address their needs. These individuals comprise an entire segment of the population that 

needs financial literacy training in order to make informed decisions. Targeted educational 

sessions best inform the unbanked and underbanked of what banks can offer them. 

 Partnering with other community organizations and conducting outreach visits help 

lay the groundwork for providing financial education programs and building trust 

within the community. Hosting education sessions in a comfortable and familiar 

environment outside of the branch is the best way to encourage attendance and interaction 

between the attendees and bank employees. 

 Targeted entry-level products provide opportunities for unbanked and underbanked 

customers to develop sound financial management practices and transition into the 

economic mainstream. The bank offers an array of deposit accounts, loans, and assetbuilding products that encourage and enable unbanked customers to achieve their financial 

goals. 

About BancorpSouth 

BancorpSouth, Inc. is a financial holding company headquartered in Tupelo, Mississippi, with 

approximately $13.3 billion in assets. BancorpSouth Bank, a wholly-owned subsidiary of 

BancorpSouth, Inc., operates approximately 300 commercial banking, mortgage, insurance, trust, 

and broker/dealer locations in Alabama, Arkansas, Florida, Louisiana, Mississippi, Missouri, 

Tennessee, and Texas. BancorpSouth Bank also operates an insurance location in Illinois. 

Assets, $Th, as of September 30, 2008: $13,293,708 
 353 Case Studies 

Carver State Bank 

Carver State Bank targets the unbanked and underbanked population in the Savannah, Georgia, area 

with active outreach, second chance checking products, a credit rebuilder program, first-time 

homebuyers’ seminars and individual development accounts. 

“We pride ourselves on building personal relationships with our customers and build our outreach around this 

philosophy. Our motto is, ‘Money matters, but people really count.’” 

- Claudia Clarke, Vice President and Senior Lending Officer 

I. Target Population 

Carver State Bank’s main office is one of only two commercial banking facilities located in one of 

Savannah’s three low-income Census tracts. This ultra modern banking facility is in an inner-city 

area near downtown Savannah, and serves primarily an African-American population. There are two 

large HUD-sponsored housing projects bordering this banking facility to the south and west. Even 

so, the demographic, social, and economic makeup of the community primarily on the north and 

east has changed in recent years, as the town has undergone gentrification. On December 11, 2007, 

the bank opened a branch in a diverse, multi-cultural neighborhood, which includes African 

Americans, Caucasians, Hispanics, Iranians, Chinese, and retirees. Carver State Bank is currently 

developing outreach programs targeting this new multi-cultural market and plans to hire multilingual 

staff. 

II. Initiatives 

Community Involvement and Outreach 

As a locally owned bank, Carver State Bank notes its strong ties to the community. Board members 

are long-time residents of Savannah, and the bank has worked closely with city officials to determine 

how to serve the community. For example, one of the mayor’s goals is to encourage more unbanked 

individuals to use financial services provided by banks rather than check cashers and other 

alternative service providers, a goal that aligns with Carver State Bank’s continuing initiatives. The 

bank’s President is currently serving as Treasurer of Savannah’s nationally acclaimed Step Up 

Poverty Reduction Program. 

Within the community, the bank conducts outreach and provides basic banking education as part of 

economic uplift and training programs sponsored by local government, nonprofit organizations, and 

faith-based groups. The bank reports that these efforts have been successful in encouraging 

attendees to open accounts at Carver State Bank. Outreach efforts also include working with firstyear students of Savannah State University and students at a local elementary school to improve 

financial literacy and awareness. The bank also actively promotes the personalized service it can 

provide to customers, especially senior citizens. 
 354 Case Studies 

Fresh Start Program 

To help ex-convicts re-integrate themselves into mainstream society, Carver State Bank partners 

with Savannah Impact to teach basic banking and financial management classes based on the FDIC 

Money Smart curriculum. Topics include opening and maintaining deposit accounts, managing 

credit, and budgeting. These classes are part of the financial education component of Savannah 

Impact’s Fresh Start Program, which provides ex-convicts with a wide range of educational 

courses upon their release. Additionally, the bank recently helped the Old Savannah City Mission 

receive a $250,000 award from the Federal Home Loan Bank to assist with the housing of the 

students who participate in the Mission’s program designed to help ex-offenders become productive 

members of society. 

First-Time Homebuyers Program 

Carver State Bank’s First-Time Homebuyers Program is offered through partnerships with the 

city government and neighborhood improvement agencies and provides assistance of up to $8,000 

for individuals who qualify. Informational seminars are provided on a quarterly basis in the lobby of 

the bank’s main office. The sessions typically reach capacity of 125 attendees. Carver State Bank 

markets the First-Time Homebuyers Program and seminar through advertisements in local 

newspapers. However, bank employees also cite Carver State Bank’s reputation in the community as 

a reason for the program’s success. 

Small Business IDA 

For start-up and small businesses, Carver State Bank offers Individual Development Accounts to 

local entrepreneurs. These IDAs are a joint effort between the bank, Economic Opportunity 

Authority, and the Savannah city government, which matches each participant’s savings at a 4:1 ratio 

up to a maximum of $4,000 per person. In order to qualify for the account, customers must take a 

series of classes and develop a business plan. The IDA is held at Carver State Bank, and the city 

provides matching funds when the IDA matures based on the amount saved over the course of the 

account. 

Second Chance Accounts 

Account-opening procedures at Carver State Bank include ChexSystems references, but individuals 

with a prior history of closure can qualify for a Second Chance Account at the discretion of the 

Customer Service Representative or Branch Manager. The Second Chance Account provides the 

same services and access available through a regular checking account product, but with additional 

monitoring by bank employees to ensure proper management and use. To facilitate this process, 

these accounts are opened with a special numbering system that allows bank employees to 

distinguish the accounts easily. However, individuals outside of the bank are not able to use the 

checks to identify these customers. The Carver State Bank customer service representatives provide 

one-on-one training on how to use the account, avoid overdraft and NSF fees, and all of the 

negative consequences of mismanaging the account. Since Carver introduced its Second Chance 

Account in September 2003, the bank reports that almost 70 percent of these accounts are still 

open. 
 355 Case Studies 

Credit Rebuilder Loan 

Another product offered to unbanked and underbanked customers is the Credit Rebuilder Loan, 

which the bank cites as one approach to transition these individuals from alternative service 

providers, such as payday lenders, to financial institutions. The Credit Rebuilder Loan deposits 

funds from the loan into a Certificate of Deposit (CD), which is used as collateral. The interest rates 

for both products are priced at the current CD rate plus 3 percent. The loan can range from $1,000 

to $10,000, and approval is based on the individual’s ability to repay the loan (i.e., debt to income 

ratio) rather than credit history or credit score. Customers can access the funds once the CD 

matures, which can range from one to five years. In many instances, the Credit Rebuilder Loan

customers use the savings as a stepping stone to home ownership by using the savings as a down 

payment for a mortgage or to cover home furnishing and other move-in costs. Furthermore, since 

the loans are secured by cash, Carver State Bank limits its risk of incurring a major loss if the 

customer fails to repay the loan. 

III. Lessons Learned 

 Developing a strong community presence through different outreach strategies enables 

the bank to attract unbanked individuals. Through its partnerships with local government 

agencies, nonprofit organizations, and community and faith-based groups, the bank positions 

itself as a trusted member of the community that serves the interest of its market. 

 Working with unbanked and underbanked customers requires devoting a significant 

amount of time and labor to counseling, assisting, and training customers. Carver State 

Bank emphasizes its focus on creating personal relationships with its customers, which helps 

them feel more comfortable in a traditional banking environment. The bank found that 

unbanked customers often prefer speaking to a bank employee in person or by phone rather 

than using online or automated phone services, even for routine inquiries. 

 Emphasizing the advantages of developing a customer relationship with a financial 

institution instead of using alternative service providers is an important value 

proposition for unbanked and underbanked individuals. The bank trains its employees to 

encourage account-opening so that customers can avoid the high fees charged by check cashing 

businesses. The bank’s new branch is directly across the street from two check cashing facilities, 

and the branch staff has already been able to convince many individuals of the advantages of 

openings accounts and using the bank instead of the more costly check cashing services. 

About Carver State Bank 

Carver State Bank opened in 1927 as a private bank for a small African-American community in 

Savannah. The bank is located in Chatham County, which contains the City of Savannah, and is 

predominantly urban. All 13 low-income Census tracts that the bank serves are located in or near 

downtown Savannah. Currently, Carver State Bank operates one full-service location and three 

ATMs: one ATM is located at its main office; one at the branch; and the other is located at the 

Savannah/Hilton Head International Airport. Carver State Bank reports that approximately 16 

percent of its current deposit account customers were previously unbanked. 

Assets, $Th, as of September 30, 2008: $40,750 
 356 Case Studies 
 357 Case Studies 

Central Bank of Kansas City 

Central Bank of Kansas City (CBKC) is a Community Development Financial Institution (CDFI) 

that works to develop products to serve the unbanked and underserved. Despite struggling in the 

past, CBKC remains committed to achieving its goal of developing programs that resonate with and 

deliver value to the community. As a result, the bank has created more effective approaches, 

including its payroll card program for low-income employees and participation in wider community 

events for educational outreach, informed by past experiences and continued insight into its 

dynamic market. 

“You better make sure you know your market and who you are serving.” – Bill Dana, CEO 

I. Target Population 

Serving a Diverse Immigrant Population 

When the bank was founded in 1951, it served the local Italian community, but since then, the 

demographic make-up of its market area has changed significantly. As one of the oldest suburban 

communities in its region, the immigrant and minority population has steadily grown and currently 

boasts a demographic mix that includes African Americans, Vietnamese, Sudanese, Somalians, and 

Mexicans. In response to the recent influx of Mexican immigrants, the bank hired eight Spanishspeaking tellers in its lobby as well as Spanish-speaking employees in its New Accounts and Loans 

departments. The diversity of cultures in CBKC’s community presents challenges in developing 

effective marketing approaches, as the bank continues to target and outreach to the variety of 

members in its community. 

II. Initiatives 

In response to the changing demographics of its market, CBKC has taken a number of approaches 

to serving unbanked individuals, including innovative product offerings and branch configuration 

strategies, and the bank continues to refine its programs, which have achieved varying degrees of 

success. 

Hispanic-Focused Branch and Offerings 

One of the bank’s initial efforts was to serve the growing Hispanic immigrant and HispanicAmerican community. In 2003, CBKC opened a Hispanic-focused branch and launched a multiproduct approach for transitioning this segment of unbanked individuals into the banking 

mainstream. The bank envisioned offering a prepaid card product with remittance functionalities 

that would form the foundation for establishing a deeper banking relationship. The bank anticipated 

that the prepaid card would meet immediate financial needs—accessing funds and transferring 

money to relatives quickly and affordably—while connecting customers with the banking system. 

Once customers felt comfortable with the institution, the bank could then promote deposit accounts 

and credit products. Despite this methodical approach, transaction volumes and adoption of prepaid 

cards did not meet the bank’s expectations, limiting customer acquisition at the branch. The bank 

decided to close its Hispanic-focused branch and realigned its strategy by focusing on products and 

outreach to the unbanked community. 
 358 Case Studies 

From its prepaid card product experience, CBKC has gained insight about the needs and behaviors 

of the Hispanic customer segments and has utilized this knowledge to improve subsequent offerings 

and initiatives. Cultural and social barriers, in particular, presented unforeseen challenges that the 

bank needed to address. Specifically, the bank had not anticipated the multiple sub-segments within 

the Hispanic community, which require identifying and responding to generational needs and ethnic 

nuances represented in the market. For example, the use of financial services differs greatly between 

first and second generation immigrants. Among first generation immigrants, mistrust of financial 

institutions, concerns around documentation, and financial dependence of family in their native 

country influence decisions about financial services and providers. In comparison, the second 

generation tends to be more acculturated and knowledgeable about banking services. CBKC 

currently applies this understanding about the diversity and complexity of the Hispanic community 

to provide more effective marketing and product development. 

Payroll Cards 

The bank successfully leveraged the knowledge gained from the initial prepaid card product offering 

into a new payroll card program, which was introduced in March 2007. This refined approach of 

reaching unbanked individuals at the workplace resulted from the bank’s joint efforts with 

employers to set up payroll accounts for low- to moderate-income employees. Although the 

program is fairly new, its initial success has been encouraging and has maintained a steady pace, 

which allows the bank to accurately predict volumes and transaction. As of September 2008, the 

bank has issued 1,500 payroll cards. 

In the bank’s payroll card program, employers become the de facto card distributor. Currently, 

payroll cards are distributed at 34 employer sites, with an average of 44 employees participating per 

site. Issuing and then reloading cards rather than issuing paychecks benefits employers, since they do 

not need to write weekly checks for unbanked employees who do not have access to direct deposit. 

For consumers, these payroll cards provide the major advantage of preventing individuals from 

overdrawing on their account. If a customer uses the payroll card at the point-of-sale, they do not 

get charged NSF fees or merchant fees. For the bank, offering payroll cards necessarily increases 

card volume, but because the bank does not charge any initiation or transaction fees to generate 

revenue, the bank faces concerns with regard to the program’s profitability and viability. 

Education and Outreach 

CBKC believes that education is a key component to helping the unbanked community, providing 

the requisite discipline, knowledge, and wherewithal to use banking products wisely. Although the 

bank has sought to increase its reach by providing educational programs through community 

services, churches, and social service organizations, it faced challenges in attracting attendees. Fewer 

than ten people attended the sessions, despite the bank’s efforts to partner with other community 

organizations and to provide the convenience of free meals and babysitting services. 
 359 Case Studies 

For this reason, the bank has taken initiative to modify its approach to education, working with 

different organizations and community groups to conduct more effective outreach. It participates in 

larger community events that attract a broader audience, such as the local “Get Smart About Credit 

Day” and “Financial Fitness Week,” which is led by the Federal Reserve Bank of Kansas City and 

the FDIC in partnership with CBKC, United Way, and the Mexican Consulate. The bank also began 

offering financial education classes at a home for abused women who lack the know-how to handle 

and manage finances. 

A statewide financial education requirement in high schools provides another channel through 

which to educate the community. CBKC was involved in advocacy efforts for mandatory financial 

education, and in 2005, the State Board of Education added a one-semester personal finance course 

to its graduation requirements for all public high school students, beginning with the Class of 2010. 

III. Lessons Learned 

 Multiple segments exist within the Hispanic market, which need to be addressed in 

order to successfully serve the unbanked. Many intricacies and complexities exist within 

the immigrant communities, which require a thorough understanding in order to tailor 

products to meet the specific needs of various generational and ethnic sub-segments. 

 There is no silver bullet that will resolve the various challenges in the unbanked and 

underbanked population. Banks should continually develop a variety of outreach programs 

and refine products and services which help unbanked individuals enter the banking 

mainstream. 

 Lack of financial literacy is often at the root of financial mismanagement, so education 

and outreach, particularly through community partnerships, are imperative to 

developing better banking customers. Immigrant sub-segments have different levels of 

understanding and comfort with the banking system, and banks must assess and address their 

financial literacy through partnerships with community organizations in order to build trust 

and provide understanding, which will encourage their use of banking services. 

About Central Bank of Kansas City 

Central Bank of Kansas City is a $162 million CDFI located in the Kansas City metropolitan area. 

Three of their six locations are in Kansas City’s urban core. Its Kansas City footprint is located on 

the east side of the city, a geography that produces a preponderance of low- to moderate-income or 

distressed Census tracts. The bank also operates six ATMs located at all of the locations except for 

its Archie facility. In addition, the bank operates three ATMs at off-premise locations—one at a 

local university in Kansas City’s urban core and two at convenience stores in distressed 

communities. The bank’s largest loan products by dollar volume are commercial loans, including 

commercial and industrial loans and commercial real estate loans, and residential real estate loans. 

The bank’s lending emphasis is on commercial and retail (small business) lending. Central Bank of 

Kansas City is owned by Central Bancshares of Kansas City, Inc., Kansas City, Missouri, a one-bank 

holding company. 

Assets, $Th, as of September 30, 2008: $165,010 
 360 Case Studies 
 361 Case Studies 

KeyBank 

KeyBank’s strategy for serving the unbanked and underbanked populations consists of an integrated 

approach that includes product development, technology, modified retail operations, outreach, 

financial education, and strong management support. The KeyBank Plus program offers low-cost 

check cashing and money orders for non-customers and was developed as a way to attract clients to 

the bank with the goal of converting them to deposit account customers over time. 

“We believe the unbanked/underbanked constitute a significant market and that we are able to meet their needs in a 

reasonably price, profitable and respectful way.” 

– Michael Griffin, SVP, Community Development Banking 

I. Target Population 

One-quarter of KeyBank’s branches are located in low- to moderate-income Census tracts, and the 

bank reports that its management team constantly seeks new and better ways to make those 

branches more effective and profitable. In addition, KeyBank has learned that many of their 

branches in middle and upper income areas can be productive locations for these programs. The 

unbanked and underbanked segments targeted include working poor, urban residents, African 

Americans, and Hispanic Americans. 

II. Initiatives 

KeyBank Plus Program 

KeyBank believes that unbanked and underbanked individuals in their service areas need different 

products and approaches than what is offered to mainstream customers. Bank executives initially 

planned to center outreach efforts on marketing savings accounts with a minimum balance and free 

checking accounts that would be affordable and easy to use. However, the bank quickly realized that 

it would first need to recognize and identify the reasons why individuals were unbanked. Employees 

observed that individuals often prefer alternative service providers to financial institutions either 

because they do not understand how bank accounts work or because they have had negative 

experiences with banks in the past. Based on this understanding, KeyBank decided to change its 

outreach approach by offering check cashing services at a low price, as a means to bringing the 

unbanked into branches. Check cashing is an important first step in establishing a comfort level 

between the unbanked and the financial institution before offering other, more economical banking 

products. 

In 2004, the bank began offering check cashing services through a pilot program for the KeyBank 

Plus Program, which involved five branches in Cleveland and soon expanded to 26 branches in 

and around the Cleveland area. KeyBank currently offers check cashing in 177 branches, branded as 

KeyBank Plus, in six different markets in Cleveland, Akron, Upstate New York, Colorado, and 

Oregon. The program provides fee-based check cashing to non-depository clients. In three of the 

markets, the fee is 1.5 percent with a $22.50 maximum fee and 1 percent in the remaining markets 

with a $25 maximum fee. Since its inception, the bank has enrolled over 22,000 people and cashed 

over $58 million in checks, with check size averaging about $700. 
 362 Case Studies 

To enable the bank to offer low-cost check cashing, KeyBank utilizes a biometric technology system 

for authentication of repeat check cashing customers to expedite the process and reduce risk for 

repeat check cashing customers. Enrolled check cashing customers simply swipe state-issued 

identification cards (e.g., drivers’ licenses) and place their finger on a scanning device to validate 

their identity for the bank teller. To use this service, customers must enroll in the program so that 

their checks can be cashed quickly, usually in about a minute. Customers have reacted positively to 

the authentication system because they feel it provides security for them and prevents other people 

from stealing and cashing their checks at the bank. The system will also alert tellers if a particular 

transaction deviates from a behavioral norm and allows the teller to determine whether or not the 

check should be cashed. For example, if a customer cashed checks for $500 every two weeks over a 

long period of time, the system would recognize that cashing a $1,000 check would be outside of the 

normal parameters. 

As KeyBank introduces check cashing services to more branches, one of the bank’s goals is to 

transition unbanked and underbanked customers from check cashing to mainstream banking 

products and services. However, the bank is cautious in its approach because “the reality of the 

situation is that some people are only comfortable with check cashing, so we need to manage our 

expectations and respect their preferences.” The bank refrains from pressuring check cashing 

customers to use other banking products if they feel uncomfortable with changing the way they 

handle their finances. As part of this approach, the bank also offers five free money orders for each 

check cashed, which provides an affordable and convenient way for customers to pay bills without a 

deposit account. 

Branch managers have observed that when new customers seeking check cashing services learn that 

they qualify for a checking account, the majority decide to open an account instead of cashing their 

check. (The bank does not record the number of accounts opened by new customers who come to 

the bank with the original intention of cashing their checks.) In addition, the bank estimates that 20 

percent of its check cashing customers also have an account at KeyBank, which classifies them as 

underbanked individuals. Bank employees explain that although these customers have accounts, they 

may cash some of their checks because it allows for an immediate availability of funds, an advantage 

relative to depositing funds in checking or savings accounts. 

Currently, KeyBank cashes government and payroll checks but does not accept third-party checks, 

with the possible exception of existing customers cashing checks issued by insurance companies. 

The general guidance is that checks should be pre-printed, but if branch managers or personnel have 

previous experience with a local employer who typically issues handwritten checks, they will permit 

those checks to be cashed. Importantly, the bank does not restrict check cashing to on-us checks. 
 363 Case Studies 

The bank reports that check cashing services have been a successful venture for KeyBank, and it has 

incurred a minimal loss compared to the standard check-cashing business. Branch managers have 

welcomed this approach because they view check cashing as income that feeds directly to their 

bottom line. Opportunity in the market exists because managers see the potential profitability and 

ability to attract new customers who would not otherwise come into the bank. Furthermore, because 

the bank already had the necessary brick-and-mortar branches and personnel, it was also able to 

make the business case to offer services at a lower price than traditional check cashers without major 

investment. New challenges in the marketplace compel KeyBank to evaluate and evolve its products 

and services, however. For instance, the state of Ohio recently passed a 28 percent interest rate cap 

on payday lending. Restricting interest rates may influence unbanked and underbanked individuals’ 

use of payday lending and alternative service providers overall, particularly check cashing behavior. 

While the implications of this new restriction have yet to be determined, it could potentially have a 

positive effect on KeyBank’s check cashing volumes and service to unbanked and underbanked 

populations in its Ohio markets. 

Education and Outreach 

KeyBank utilizes two different approaches in its efforts to reach out to the unbanked and 

underbanked. To target consumers, the bank advertises in radio, buses, transit stops, community 

newspapers, and neighborhood development group newsletters. To attract customers within the 

vicinity of bank locations, KeyBank Plus branches announce the availability of their check cashing 

service with banners stating “Check Cashing: No Account Required, ChexSystems Welcome.” 

Radio remotes are also scheduled inside some branches. KeyBank also partners with faith-based 

organizations, schools, and community development organizations to provide financial education 

and information about products and services at the organization’s location. 

On the payroll side, KeyBank utilizes a program called Key at Work to provide services to 

employees of employers that are KeyBank customers. In addition to providing free checking and 

savings accounts to employees, the bank also offers discounts on other bank products. For 

employees who do not have, or cannot establish, a traditional bank account, the bank offers 

PayWorks, a reloadable payroll card through which they can access their salary. 

One of the bank’s branches has a financial education center at the location. At the center, customers 

are encouraged to set financial goals and are given $250 to deposit once they achieve their goals. 

The center also provides IDA education, with a focus on home purchases and eligibility for Earned 

Income Tax Credits (EITC). In addition to informing people that they qualify for EITC and can 

avoid refund anticipation loans (RAL), the bank also offers free tax preparation services, in 

cooperation with EITC Coalitions across its footprint, when the customer opens an account. The 

bank also has staff on hand to open accounts for direct deposit and to present information about 

other bank products. For alternative service providers, tax season presents the most opportunities to 

acquire new clients for check cashing services. Over time, the bank hopes to increase awareness in 

the community so that individuals who come to the center for tax preparation services plan to set 

aside 25 percent of their tax refund toward savings rather than spending the entire amount. 
 364 Case Studies 

Future Products 

KeyBank plans to offer remittance products in the future and believes that it is something that they 

“need to offer” due to customer demand. 

KeyBank identified that offering bill payment services, while valuable to the community, is a more 

difficult endeavor for the bank. KeyBank offered utility bill payment in the past, but the service 

required that tellers undertake the daunting task of aggregating and tallying a large volume of bills at 

the end of each day. The bank is trying to find an alternative technology solution for bill payment, 

possibly full-service kiosks located in branches. 

Market Research 

To gain insight into the unbanked and underbanked population, KeyBank meets regularly with local 

nonprofit organizations and community development corporations and conducted several focus 

groups with customers and non-customers to determine whether KeyBank’s products and services 

meet the community’s needs. Findings from these research efforts helped form the bank’s outreach 

efforts and measure the effectiveness of current offerings, so as to help identify successes and 

concerns in the banks’ approach. Anecdotally, one focus group asked people to identify 

characteristics of check cashers and bankers. Respondents described check cashers as comfortable 

and familiar members of their communities and neighborhoods, while bank employees were 

perceived to be corporate outsiders who did not belong to their neighborhood and made them feel 

uncomfortable. To overcome client misperceptions, KeyBank encouraged unbanked customers to 

come into the branch, see that they can be comfortable with branch personnel, who often live in the 

community, and overcome their ideas of what the bank is and what kind of clientele the bank looks 

for. 

While the unbanked and underbanked had their own misperceptions of bank employees as 

unwelcoming and unfamiliar, some bank employees also had their own views of check cashing 

customers. Some employees had characterized these customers as less honest and less trustworthy 

than mainstream, conventional account-holding customers. To combat these notions and to 

improve their relationship with and understanding of customers, KeyBank’s leadership sought to 

change employees’ perceptions by holding training sessions on-site. 

KeyBank has also promoted research by and provided funding to other organizations. In 2007, it 

sponsored a study with the Ford Foundation and the Center for Financial Services Innovation to 

segment check cashing behavior, determine how likely customers would be interested in banking 

products, and identify whether these preferences were due to convenience or price sensitivity. In 

2007, the bank made investments in a fund that focuses on investing in technology and programs 

that develop products for the underbanked. 
 365 Case Studies 

III. Lessons Learned 

 Break down misperceptions on both the client and employee sides through education 

and awareness. KeyBank accomplished this by identifying unbanked individuals’ misgivings 

about financial institutions and their employees, addressing their concerns, and inviting them to 

branches to establish a personal connection with bank staff. On the other hand, the bank also 

educated its employees about check cashing customers in an effort to overcome negative 

misperceptions and to facilitate respectful customer interaction that would enable the bank to 

deliver value to unbanked individuals. 

 Check cashing clients represent a similar segment of the population as those who use 

deposit accounts but have simply chosen to manage their finances in a different way. 

Some prefer to use check cashers, despite the higher service fees, because they know the exact 

costs involved, can receive the money tangibly and immediately, and know how much they have 

available to use until they receive their next paycheck. Offering and marketing products and 

services, such as check cashing, that provide the same conveniences and benefits enables banks 

to provide immediate value to unbanked individuals, in addition to mechanisms for transitioning 

into the financial mainstream. 

 Financial education is essential to help the unbanked make informed decisions. Without 

knowledge of how banking products work, consumers may not be willing to deal with banks and 

will continue to use traditional check cashing services. 

About KeyBank 

KeyBank is a nationally-chartered bank headquartered in Cleveland, Ohio. The bank was formed in 

1994 through the merger of Society Corporation of Cleveland and KeyBank Albany, New York. 

KeyBank has approximately 18,400 employees and 2.2 million retail, small business, and corporate 

and investment clients. Its 965 branches and 1,444 ATMs are located in Alaska, Colorado, Idaho, 

Indiana, Kentucky, Maine, Michigan, New York, Ohio, Oregon, Utah, Vermont, and Washington. 

KeyBank is owned by KeyCorp. 

Assets, $Th, as of September 30, 2008: $97,811,238 
 366 Case Studies