Presented to: The FDIC Chairman’s Advisory Committee on Economic Inclusion Amalgamated Bank’s Products and Programs to Reach the Un-banked and Under-banked February 5, 2009 Presented by: Peter Mosbacher, Senior Vice President, Community Development Division
Bank Overview Amalgamated has a compelling and distinctive history that continues to influence its approach to banking and to serving its customers. The Bank was founded in 1923 to serve the banking and borrowing needs of union workers, and today continues to promote itself as a “bank for working people.” Because of its roots in the labor movement, Amalgamated’s product offerings and pricing decisions are characterized by sensitivity to the unique needs of unions, union members, immigrants and working class individuals and families.
Bank Overview Amalgamated Bank operates out of 13 branches in New York City. 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 is in a growth mode and plans to add additional branches in N.Y.C. and in other cities over the next few years.
Bank Overview The Bank has recently opened four branches in neighborhoods identified as Banking Development Districts (BDD) by the New York State Banking Department. These communities are underserved by the banking industry and are dominated by alternative service providers, which frequently charge high fees and minimal to no affordable banking products and services. • South Bronx • Long Island City, Queens • Bedford Stuyvesant, Brooklyn • Sunset Park, Brooklyn
Bank Overview Amalgamated was the first bank in the country to offer totally free checking long before “basic banking accounts” were legally required in New York. That tradition continues today through a consumer checking account that has no monthly minimum balance requirements, no per check or maintenance charges, and no limits on the number of withdrawals or checks.
Bank Overview Our Second Chance Account has been designed to help bring back into the fray individuals who have learned from previous mistakes. Features include: • No bounce protection • Direct deposit preferred • Minimum $.01 to open checking and $5 for savings • No minimum balance after opening • Only an ATM card will be issued • After one year of successful account use, customer can be upgraded to a full-service checking/savings account and receive a $50 credit for completing the Money Sense Financial Education Program
Partnerships with Government and CBO’ s “Bank on California” is a collaborative, voluntary initiative that brings together the Office of the Governor, selected Mayors’ offices, financial institutions, community organizations, regional United Ways, and federal and state regulatory agencies to help the unbanked of California open starter bank accounts and enter the financial mainstream, where they can begin saving, build a credit history, gain access to lower-cost sources of credit, and invest for their future. The Bank’s Pasadena Branch is participating using our Second Chance Account product.
Money Sense Financial Education In 2006, the Bank introduced Money Sense, an in-house branded financial education program developed in partnership with the Coalition for Debtor Education. The Coalition not only contributed to the creation of the Money Sense curriculum but also trains Bank employees to conduct sessions. Presented in 10 modules lasting 45-60 minutes each, the “core curriculum” focuses on behavioral finance and the psychology of money.
Money Sense Financial Education 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 often involve unions, local development corporations, or religious institutions. Upon completion of at least four Money Sense workshops, participants are eligible to receive a $50 coupon that can be redeemed at any Bank branch to establish a new savings account.
Money Sense Financial Education The Bank also offers Money Sense education classes to its audience of union members in a particular industry and delivers lunch time seminars at the workplace to improve convenience and accessibility. Outreach visits serve as an opportunity to inform them about Group Advantage Banking, a package of discounted products and services and specifically packaged for union members enrolling with direct deposit.
Group Advantage Banking Program Group Advantage Banking (GAB) is a valuable package of free and discounted banking services available at the customers’ place of business during business hours. Requires Direct Deposit enrollment and offers….. • Free checking • Savings and money market accounts with no minimum balance requirements • Online banking and bill pay • No-fee ATM banking at over 32,000 AB and Allpoint Network ATM’s nationwide • Reduced rates on personal and auto loans • Residential mortgages • Free “Lunch ‘N Learn” Money Sense Financial Education Workshops
Partnerships with Unions The Bank sponsors the Municipal Employees Housing Program with Neighborhood Housing Services of NYC providing place-based counseling for DC37 Union members. The Program offers first time homebuyer workshops including post-purchase counseling in the areas of early delinquency intervention, foreclosure and predatory lending intervention and reverse mortgage counseling for retirees who currently own their homes.
Partnership with Unions The Program allows DC37 members, and all NYC municipal workers, preference for 5% of units in city-sponsored lotteries for affordable homes and apartments and, as first time homebuyers, are eligible for down-payment grants of up to 6% of the purchase price through the NYC Department of Housing, Preservation & Development. The Bank also participates at the Union’s annual Housing Fair and establishes up to 100 new accounts each year.
Partnerships with Unions In its Las Vegas market area, Amalgamated Bank has launched a payroll card product. As hotels, casinos, and other major employers begin moving toward mandatory direct deposit of paychecks, the Culinary and Bartenders Union 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.
Partnerships with Unions The Bank also deployed an ATM at the Union’s headquarters, where payroll card customers pay a reduced surcharge to withdraw funds. The product will serve as an entry point for transitioning unbanked union members into deposit account customers and the economic mainstream.
Partnerships with Government and CBO’ s The Bank recently launched 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, the Bank signed an agreement with the Housing Authority to accept rent payments in cash for a small fee at branch locations, process the payments for remote capture, and transfer the payments to the Housing Authority.
Partnerships with Government and CBO’ s In collaboration with the East River Development Alliance (ERDA) and the New York City Housing Authority (NYCHA), our Long Island City BDD Branch has supplemented ERDA’s existing Wealth Building Academy with financial education programs that help unbanked individuals feel comfortable and welcome in bank branches. Each month, over 200 NYCHA residents come into the Bank to pay their rent and about half then proceed to open a basic banking, checking and/or savings account.