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A more perfect Union serves the unbanked and underbanked

West Coast Expo: Business, Technology, Green & Health will be held at Los Angeles Convention Center, September 27 & 28, 2013.
West Coast Expo: Business, Technology, Green & Health will be held at Los Angeles Convention Center, September 27 & 28, 2013.

Union Bank of California has a successful history of fostering economic sustainability in the regions its serves, particularly providing financial services to so-called “underbanked” and even “unbanked” communities, including portions of south and east Los Angeles. The firm was recognized recently by the Greenlining Institute for implementing a new Access Account designed specifically for its low- and moderate-income customers.

The new banking program, or “checkless account,” is designed for low- and moderate-income residents and other consumers who may not qualify for a traditional bank account. Often, these persons must resort to costly check-cashing outlets—which can charge up to 20 percent at face value—or receive their wages in cash. The Access Account is said to minimize the likelihood of fees such as overdraft and nonsufficient funds, along with providing easier access to money via branch offices or through ATMs.

“We’re receiving positive responses to the new Access Account because it provides an opportunity for regular banking for low-income persons without the common high fees,” said Rogger Lacruz, retail product manager with Union Bank.

“The program is designed to meet the needs of persons who often have to resort to check-cashing centers which deduct needed money from persons already struggling to make ends meet. Every Union Bank branch in greater Los Angeles offers this new account and we encourage underbanked communities to take advantage of this opportunity to open an account and thereby help establish a good credit rating for the future.”

The program has caught the eye of advocacy groups who have surveyed banking practices in the inner city and have found various communities lacking in financial services. “We and other community groups have been urging banks to address the needs of these households, who have often found conventional bank accounts to be too expensive or too confusing,” said Sasha Werblin, economic equity director with Greenlining Institute, a policy-research organization based in Washington, D.C. “We’re glad Union Bank has moved closer toward meeting the needs of these families and expect other banks to do the same.”

With the innovative account, Union Bank customers can opt to use an ATM card to do point-of-sale transactions at participating merchants. “We’ve long been concerned about the 34 million U.S. households—disproportionately people of color—who are unbanked or underbanked, and who often end up paying much higher fees at check-cashing stores or other alternative services,” Werblin added.

Customers can open the account with minimum deposit of $25, and must maintain a minimum balance of at least $1. It offers basic banking services such as in-bank deposits/withdrawals, ATM access, online and mobile banking, discount money orders, no overdraft fees and, reportedly, all done at lower fees than a traditional checking account.

“This new account won’t work for everyone,” Werblin explained, “ but we think it will be useful for a meaningful number, including customers who have trouble maintaining a high minimum balance. There is a large market out there of customers who aren’t being served by the options now available, and we urge all banks to develop new and responsible ways to meet their needs.”

Union Bank provides a number of community outreach services. Among them are free financial education programs to diverse communities of need; connecting bank employees with community-based organizations to maximize volunteer opportunities, and coordination of senior-level officer board services with nonprofit organizations. Its “Bank On” initiative provides low-cost products, financial education and financial coaching to unbanked and underbanked communities. Also, the VolunteerMatch program helps Union Bank employees identify opportunities to volunteer in low-income communities.

In 2005, Union Bank increased its commitment from 4.5 percent to 6.5 percent of annual assets to return to the communities it serves, the allotment being in the form of loans to nonprofit organizations and businesses owned by women, minorities and disabled veterans. The bank also offers affordable housing loans and tax credits for community development organizations. Union Bank is in the midst of a 10-year community commitment initiative in which it has pledged 2 percent of its annual after-tax net profit to charitable organizations. It has raised $96 million during the first eight years of the plan and, in 2012, invested $12.6 million in grants, charitable contributions and scholarships to assist nonprofit organizations.

For more information about the new Access Account, call (800) 796-5656, or contact Union Bank via email at