By Sofia Baig, a Summer 2016 Leadership Conference Education Fund Intern
In consultation with members of the Asset Building Policy Network, including The Leadership Conference Education Fund, Citibank announced last week that it would be providing surcharge-free ATM access in Chicago, Los Angeles, Miami, New York, San Francisco, and Washington, D.C., to customers of some minority-owned banks and credit unions. The new initiative will give approximately 300,000 customers from partnering financial institutions access to around 2,400 ATMs at Citi branches across the country.
Cathie Mahon, CEO of the National Federation of Community Development Credit Unions, which serves low-income members, welcomed the announcement, saying that their “members will benefit from the convenience of Citi’s extensive ATM network while continuing to benefit from the safe and affordable products and services of their credit union.”
Customers of the partnering institutions should benefit by having more convenient access to ATMs, with no costs and improved security.
The need for steps like this was highlighted in a 2014 report by National CAPACD, National Urban League, and National Council of La Raza, which assessed how financially engaged low- and moderate-income communities of color are and how they’re accessing mainstream and alternative financial services and products. The findings of the report, “Banking in Color,” show that:
- 80 percent of survey responders use traditional banking services, however, 20 percent of responders are financial isolated with no use of traditional banking services.
- Customer service and location matter for banking. People prefer local access and personal relationships.
- Account fees and minimum balance requirements are also driving choices.
The report made recommendations to improve financial isolation and to facilitate economic integration for underserved families, especially lower-income and minority communities. Some of the recommendations were to increase bank account ownership among the underserved, to expand financial capability for the underserved, and to help the financially vulnerable from falling out of the banking system.
Since the issuance of the report, Citi and rival Bank of America took another significant step to address the problems outlined in the report by launching the “Access Account” and “SafeBalance” products, respectively, checkless accounts that guarantee no overdraft fees. Citi’s announcement on ATMs is an encouraging next step and can hopefully also serve as a model for future global bank and local institution collaboration to expand financial security for underserved communities that need it most.
Read the “Banking in Color” report here.