Gov. Arnold Schwarzenegger, mayors of five major cities and representatives for 32 financial institutions announced plans Friday to help thousands of low-income California families begin to build savings accounts.
The announcement under the Capitol dome came with former President Bill Clinton speaking on videotape to endorse the move "to get more people into the financial mainstream."
The program, called Bank on California, aims to enable as many as 100,000 California residents to open free or low-fee bank accounts and receive training on how to manage their money and build savings over the next two years.
"Today, California is taking a major action to help the hard-working families save some of their hard-earned dollars," Schwarzenegger said in announcing the program.
Five cities – Sacramento, Los Angeles, San Francisco, Oakland and Fresno – announced Friday they will participate in the program. Institutions supporting the effort include Bank of America and the Federal Deposit Insurance Corp.
Sacramento Mayor Kevin Johnson said the city will open its "Bank on Sacramento" version of the program in January.
An estimated 1.5 million California residents have neither savings nor checking accounts.
Though hundreds of thousands receive payroll checks or other employment income, many spend costly fees for check cashing services and are unable to put any money aside after paying living expenses.
Bank on California was inspired by a similar Bank on San Francisco effort launched two years ago along with the Federal Reserve Bank of San Francisco and a nonprofit group, EARN.
To date, San Francisco officials say, the initiative has helped 25,000 families bank more than $19 million in savings.
"The idea was simply to utilize a checking or savings account as a place to set aside assets to begin to change people's fundamental philosophy and move from a check-cashing mentality to a bank account mentality," said San Francisco Mayor Gavin Newsom.
Call Peter Hecht, Bee Capitol Bureau, (916) 326-5539.
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