California Business Minute™

Hi, I am Tim Johnson and welcome to the California Business Minute.

California is starting what banking experts call the nation’s largest, most ambitious effort
by a state government to enable people, especially immigrants and the poor, to open and
maintain bank accounts.

The program, Bank on California, which is to be announced Friday in Sacramento, will seek
to create 100,000 accounts over two years among residents here and in San Francisco,
Oakland, San Jose and Fresno. It is based on a two-year trial in San Francisco, where 31,000
accounts were opened by first-time users.

Under the program, more than 30 banks and credit unions will receive grants from the William J.
Clinton Foundation to enable them to offer residents low- or no-fee accounts, to train them how
to use banks and in many cases to waive overdraft fees the first few times.

Roughly 11 percent of California’s 25 million residents — most of them poor — do not have
checking or savings accounts. They cash paychecks at privately owned check-cashing
businesses and stores, placing their money under proverbial mattresses and in other places
that earn them no interest.

A Pew Charitable Trust  report -"Converting Basic Financial Services Fees into Prosperity:
An Untapped Wealth-Building Opportunity for Banks and Consumers"--found that 12 percent of
California households lack a bank account and pay fees to cash checks and pay bills, adding
up to $700 annually for the typical unbanked household. The majority of these households
appears to be qualified for bank accounts, but is either misinformed about the relative cost of
banks or distrustful of them. Download the full report at www.pewtrusts.org/safebanking.

I am Tim Johnson and this has been the California Business Minute.