CRC's consumer advocacy focuses on fighting for all households to have access to a) safe and affordable mechanisms to store money (such as accounts that provide FDIC, anti-fraud and theft insurance), b) safe and affordable ways to pay for purchases (such as through debit cards) and c) safe and affordable ways to build their capacity to finance large goals. Households that are living from paycheck to paycheck-- a category that increasingly defines more of the American population-- need payment options that meet their cash flow and money management needs.
To that end, CRC has designed a truly affordable bank account-- the SafeMoney account-- to help lower income people and people of color save money, make purchases, pay bills and leverage future financing relationships. CRC is asking all banks and credit unions in California to offer the account, starting with the biggest banks in our state.
Click here (pdf) for a side-by-side comparison of the SafeMoney account, big bank checking accounts, and prepaid cards; and to learn more about how you can join our Call to Action to the banks!
Once it becomes available, the SafeMoney account will feature the most common payment and money management tools used by lower income households while avoiding expensive fee traps often found in other bank accounts and prepaid cards. Customers will be able to use the SafeMoney debit card to pay for purchases at the register, online, and even to authorize future and recurring payments such as a monthly phone bill. Unlike current big bank checking accounts, customers will not have to maintain a high balance in the account or sign up for direct deposit to avoid monthly fees. And unlike prepaid cards, customers will not have to pay a fee each time they use the card to make purchases, go to an ATM or make a deposit.
With the SafeMoney account, consumers will have the security of knowing that they will never be charged overdraft fees. Studies show that overdraft programs and fees are the leading reason that people leave banks. These fees typically cost $35 per paid item for most current checking accounts and $15 per paid item when offered by prepaid cards. Big banks also report overdrafts to ChexSystems – a private, largely unregulated reporting agency that can effectively blacklist the customer from opening a new bank account in the future. The SafeMoney™ account will not allow customers to overdraft their accounts through purchases, bill pay or electronic payments, making money management clear and predictable. Instead, the customer will get clear and reliable up to the minute information about balances and authorized transactions online or by phone, to help make money management easier.
Because SafeMoney will only be offered through banks and credit unions, customers will have the maximum protections allowed by law against theft and fraud if their debit card is stolen or used by an unauthorized person. Prepaid cards are not currently required to offer these protections and those that do are typically more expensive. Although they are targeted to households with bad bank experiences, prepaid cards do not help customers rehabilitate negative ChexSystems histories. The SafeMoney account will make it possible for households with ChexSystems reports to re-enter the mainstream banking system safely and affordably.
Customers will also be able to buy money orders affordably to pay for items that they cannot or choose not to pay for with debit card or cash. Customers will also be able to send money to people in other states or countries affordably. By forgoing checks, the account removes the possibility of forgotten, lost or bounced checks and the expensive fees associated with them.
Click here (pdf) for a side-by-side comparison of the SafeMoney account, big bank checking accounts, and prepaid cards, and to learn about how you can support SafeMoney and our call to action.
To support the SafeMoney account and join CRC's Call to Action, or to learn more, please contact Andrea Luquetta at email@example.com.
In September 2012, CRC published a report called "Checking Out: How Big Banks Are Pushing Consumers Out of Basic Bank Accounts." Click here to read it now.