It’s not too late to fix this part of the COVID-19 crisis

As Congress hammers out the final details of the federal COVID-19 relief package, all eyes are on how much financial help will go directly to those in need. Additional one-time stimulus payments, extended unemployment, and even recurring monthly checks through an expanded child tax credit are all on the table. Now, the federal government is also thinking about how to get this money quickly and safely to those who need it most. Having a bank or credit union account simply can no longer be seen as a luxury.

For many, receiving these payments through direct deposit into a bank or credit union account seems automatic; and then managing and spending those funds is both free and able to be done remotely. However, recent federal statistics highlight that almost 36 million Americans didn’t have a bank or credit union account or relied on expensive and predatory alternative financial services like check cashers to access their money — a staggering number that surely got worse due to the financial strain of the COVID-19 pandemic. For people of color, the unbanked rate is literally twice as high. That’s particularly alarming when coupled with the pandemic’s similar disproportionate financial and health impacts on communities of color.

Our work together and with financial institution and community partners across the country in the national Bank On movement offers a large-scale, ready solution to this newly-frontline banking access emergency, and we urge the federal government to make use of Bank On’s national product certification and national grassroots network immediately.

Consumer advocates, financial institutions large and small, banking regulators, national nonprofit organizations, and local elected officials have reached consensus on what a safe, affordable, and genuinely useful basic bank or credit union account looks like. These accounts cost $5 or less a month; they don’t charge overdraft or insufficient fund or other surprise fees; they can be used for direct deposit, purchases, and paying bills; and they are federally insured.  Already, millions of people have opened these accounts and, according to the Federal Reserve Bank of St. Louis, the vast majority of those who have were new customers.

Here in Pittsburgh, we’re proud to work with banks and credit unions to make sure consumers have access to accounts that meet these standards. Through the recent launch of Bank On Allegheny, led by our great partners at Neighborhood Allies and with our local FDIC representatives offering support, we’ve brought together banking and community partners from all across our region to encourage financial institutions to join the movement, and it’s working! In a recent two-month period following our launch, we’ve had two new institutions create accounts that meet the standards; PNC, a large bank with branches all over our region, and TriValley, a single branch credit union serving a low- and moderate-income neighborhood.

During the first round of Economic Impact stimulus payments last summer, Bank On coalitions, governments, and financial institution partners worked together to demonstrate how consumers could use these accounts to receive their stimulus funds — faster than receiving and cashing a check, and with none of the fees that eat up these critical payments. The Federal Deposit Insurance Corporation, Internal Revenue Service, and Centers for Disease Control and Prevention all guided consumers to Bank On account options that could be opened online, as did mayors and other local leaders. In fact, there are now 65 banks and credit unions that have altered or newly developed accounts to receive Bank On certification, already comprising over 46 percent of the national deposit market share. The national American Bankers Association recently embraced this solution, as well, and urged its thousands of bank members to offer a Bank On certified account, and announced that nearly every single one of the nation’s core service processors had agreed to partner to make it easier than ever for financial institutions to offer Bank On-certified accounts. Bank On Allegheny is encouraging more and more bank and credit union partners to join the movement.

As the financial impact of the COVID pandemic continues to stretch on, it’s more critical than ever that we build on this powerful example of multi-sector collaboration to make sure that vulnerable residents can safely access, and safely spend, relief funds. Government outlays of support funds must do double duty, both offering support and creating safe and productive pathways for people outside the mainstream banking system to get in. The IRS and other federal agencies must make sure that residents can access and use newly-opened Bank On certified accounts to receive future relief payments; more local leaders should launch Bank On coalitions in their communities; and banks and credit unions should continue making Bank On certified accounts available to help residents access and spend funds and join the financial mainstream. The time to connect tens of million Americans to the vital benefits of safe banking is now. This is one part of the COVID-19 crisis we can solve immediately.

Jonathan Mintz is CEO of the nonprofit Cities for Financial Empowerment Fund (CFE Fund) and Bill Peduto is the mayor of Pittsburgh.