California Reinvestment Coalition

SafeMoney™ Account

CRC's consumer advocacy focuses on fighting for all households to have access to:

  • Safe and affordable mechanisms to store money (such as accounts that provide FDIC, anti-fraud and theft insurance); 
  • Safe and affordable ways to pay for purchases (such as through debit cards); and 
  • 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 standards for a truly affordable, functional bank account-- the SafeMoney™ standards -- to help lower income people and people of color save money, make purchases, pay bills and leverage future financing relationships. CRC is advocating that all banks and credit unions in California offer accounts that comply with these standards.

Click here (pdf) to see our chart of checking accounts offered by banks in California and how well they meet the SafeMoney™ standards.

The SafeMoney™ standards 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. With accounts that meet the SafeMoney™ standards, customers would be able to use Visa or MasterCard branded debit cards to pay for purchases at the register, online, and even to authorize future and recurring payments such as a monthly phone bill. Customers would 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 would not have to pay a fee each time they use the card to make purchases, go to an ATM or make a deposit.

Accounts that meet SafeMoney™ standards give consumers 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™ standards help customers safely avoid overdraft fees by not letting debit card purchases go through that would overdraw the account. SafeMoney™ calls on banks to provide information that makes money management clear and predictable with up to the minute information about balances and authorized transactions online or by phone.

Bank accounts- not prepaid cards- provide 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.

Click here (pdf) to see the most recent comparison.

To support the SafeMoney™ standards or to learn more, please contact Andrea Luquetta at aluquetta@calreinvest.org.

You may also be interested in CRC's report: Checking Out: How Big Banks Are Pushing Consumers Out of Basic Bank Accounts The nation's biggest banks have been increasing the cost of these bank accounts so that now the most basic banking account can cost a consumer anywhere from $84-144/year. Fee exclusions are only available to their wealthy customers, and their less fortunate customers are increasingly being pushed out of banking and towards prepaid card programs. CRC has developed a model bank account that is safe, reliable, and affordable-- the SafeMoney™ account-- that banks should adopt and offer to their customers.

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.