Community Development Banking List
10-05-2010, 11:18 AM
Original message from: Barksdale.English@ci.austin.tx.us
Good morning!
I wanted to share with you all a legislative initiative launched by the City of Austin late last week.* Below you will find the press release and resolution calling on the City to increase the percentage of employees receiving pay through an electronic wage transfer to 98% by September 30, 2011.
Best wishes to you all,
Barksdale English
Policy Aide to Bill Spelman
Austin City Council, Place 5
512.974.2256 (office)
512.974.7655 (fax)
http://www.ci.austin.tx.us/council/spelman.htm ('http://www.ci.austin.tx.us/council/spelman.htm')
FOR IMMEDIATE RELEASE
October 5, 2010
Contact: Barksdale English, Policy Aide to Bill Spelman******************************************* ****************
512-974-2256 (Office)
barksdale.english@ci.austin.tx.us
City of Austin to Promote Paperless Pay for Employees
Austin, TX - Austin City Council Member Bill Spelman introduced a resolution at last Thursday's City Council meeting that will increase the percentage of City employees receiving pay through an electronic fund transfer to an average of 98% by September 30, 2011.* Currently, the City estimates that between 88% and 92% of its nearly 12,000 employees receive their salary through electronic fund transfer, such as direct deposit or prepaid debit card loading.* The measure, co-sponsored by Council Member Sheryl Cole, passed on a unanimous vote of the seven-member body.
"Every time someone goes to a check cashing company or takes out a money order to pay a bill, they can lose a significant portion of their salary to service fees," Spelman said.* "So over the next year, we are going to work with our employees to identify reasons why some of them may not be using bank accounts or prepaid debt cards to manage the money they earn from the City.* We can direct folks to products out there right now that can reduce their personal costs and help them save more of their hard-earned money."
The resolution calls on the City to partner with Bank on Central Texas, a project of the United Way Capital Area and PeopleFund, to create awareness among City employees of the importance of being banked, promote access to financial products tailored for those who do not have or do not use bank accounts, and provide them with financial education and capacity building.*
*"Bringing more Central Texans into the financial mainstream is a critical step in ensuring that families are financially stable," said Emily DeMaria, Vice President of Community Development for*United Way Capital Area. "We applaud council members and the City of Austin for recognizing the important role it can play in the Bank on Central Texas program and in helping ensure the financial stability of its workforce."
Spelman said the resolution is the first of a series of financial empowerment initiatives that his office will unveil over the next year.* "There's a domino effect at work: nearly 150,000 households in Austin rely on alternative financial services to manage their basic living expenses," he said.* "And more than a third of this group has to borrow just to pay their rent or utility bill.* With interest rates averaging around 400% APR, people are borrowing five or six times just to pay off that original utility bill.* So, it's important for the City of Austin to take a leadership position and create opportunities to break that cycle."
###
RESOLUTION NO. 20100930-025
WHEREAS, in December 2009, the Federal Deposit Insurance Corporation (FDIC) estimated that more than 20% of households (146,000 households) in the Austin-Round Rock Metropolitan Statistical Area (MSA) are "underbanked" and rely on alternative financial services, including non-bank money orders, non-bank check cashing, payday lending, or pawn shop lending; and
WHEREAS, racial and ethnic minorities, as well as lower-income households, were significantly more likely to be underbanked, according to the 2009 FDIC study; and
WHEREAS, the 2006-2008 American Community Survey 3-year Estimates found 13% of the total MSA population lived in poverty, and 22.8% of African Americans and 19.2% of Hispanics in the MSA lived in poverty; and
WHEREAS, a 2008 report by the Center for Financial Services Innovation estimated that 38% of the underbanked borrow to pay basic living expenses; and
WHEREAS, in 2008 the country's largest publicly-traded payday lending institution, QC Holdings, reported that its average loan over 2005-2008 was close to $360 with a term of 16 days and a fee of approximately $53 - a 400% annual percentage rate; and
WHEREAS, according to the Corporation for Enterprise Development, substantial research evidence indicates that building a household's assets "increases economic security, encourages initiative and risk-taking, increases economic confidence, increases home and business ownership, increases financial skills, strengthens families and communities, and improves the prospects of future generations"; and
WHEREAS, United Way Capital Area and PeopleFund launched the Bank on Central Texas program in June 2010 to create public awareness of the importance of being banked, promote access to financial products tailored for the underbanked or unbanked, and provide financial education and capacity building for the underbanked and unbanked; and
WHEREAS, a 2009 Center for Financial Services Innovation report indicated that workers enrolling in a direct deposit program can reduce transaction costs associated with converting paychecks into cash or money orders, can increase personal safety by not carrying large amounts of cash, and can build savings opportunities through their interactions with financial institutions; and
WHEREAS, on average 90% of City of Austin workforce is paid through direct deposit; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF AUSTIN:
The City Council accepts the invitation of the United Way Capital Area and PeopleFund to become a community partner and leader in the Bank on
Central Texas (BOCT) effort. The City Manager will designate a liaison from the city staff to collaborate on BOCT programs.
BE IT FURTHER RESOLVED:
The City Council directs the City of Austin to participate in the BOCT Employer Campaign, a program designed to highlight the commitments to and successes of financial empowerment programs of the largest employers in Central Texas.
As its first public commitment, the City Council directs the City Manager to use all necessary effort consistent with legal requirements to achieve a 98% electronic wage payment rate by September 30, 2011. Among these efforts, the City Manager should work with employees receiving paper checks to identify their individual barriers to receiving an electronic wage payment, and where appropriate:
1. Offer financial coaching to the employee, either through the City's Human Resources Department or in conjunction with existing programs offered by community organizations; and
2. Identify financial products through the BOCT program that may benefit the employee, whether they are BOCT accounts, prepaid card accounts, or more traditional bank or credit union accounts.
The City Manager should also develop procedures to encourage new employees to enroll in electronic wage payment. The City Manager will present the interim results of this initiative to Council by April 30, 2011 and the final results of the year-long effort by October 15, 2011.
BE IT FURTHER RESOLVED:
Over the course of Fiscal Year 2010-2011, the City Manager will work with BOCT leaders to help identify solutions to bring the electronic wage payment rate as close to 100% as is legitimately possible consistent with legal requirements within a reasonable but accelerated timeline.
BE IT FURTHER RESOLVED:
The City Manager will work with BOCT to create other Employer Campaign programs that can be offered to city employees and which serve as a leadership model for other Central Texas employers. These programs should be presented to the City Council for its review by April 30, 2011.
Good morning!
I wanted to share with you all a legislative initiative launched by the City of Austin late last week.* Below you will find the press release and resolution calling on the City to increase the percentage of employees receiving pay through an electronic wage transfer to 98% by September 30, 2011.
Best wishes to you all,
Barksdale English
Policy Aide to Bill Spelman
Austin City Council, Place 5
512.974.2256 (office)
512.974.7655 (fax)
http://www.ci.austin.tx.us/council/spelman.htm ('http://www.ci.austin.tx.us/council/spelman.htm')
FOR IMMEDIATE RELEASE
October 5, 2010
Contact: Barksdale English, Policy Aide to Bill Spelman******************************************* ****************
512-974-2256 (Office)
barksdale.english@ci.austin.tx.us
City of Austin to Promote Paperless Pay for Employees
Austin, TX - Austin City Council Member Bill Spelman introduced a resolution at last Thursday's City Council meeting that will increase the percentage of City employees receiving pay through an electronic fund transfer to an average of 98% by September 30, 2011.* Currently, the City estimates that between 88% and 92% of its nearly 12,000 employees receive their salary through electronic fund transfer, such as direct deposit or prepaid debit card loading.* The measure, co-sponsored by Council Member Sheryl Cole, passed on a unanimous vote of the seven-member body.
"Every time someone goes to a check cashing company or takes out a money order to pay a bill, they can lose a significant portion of their salary to service fees," Spelman said.* "So over the next year, we are going to work with our employees to identify reasons why some of them may not be using bank accounts or prepaid debt cards to manage the money they earn from the City.* We can direct folks to products out there right now that can reduce their personal costs and help them save more of their hard-earned money."
The resolution calls on the City to partner with Bank on Central Texas, a project of the United Way Capital Area and PeopleFund, to create awareness among City employees of the importance of being banked, promote access to financial products tailored for those who do not have or do not use bank accounts, and provide them with financial education and capacity building.*
*"Bringing more Central Texans into the financial mainstream is a critical step in ensuring that families are financially stable," said Emily DeMaria, Vice President of Community Development for*United Way Capital Area. "We applaud council members and the City of Austin for recognizing the important role it can play in the Bank on Central Texas program and in helping ensure the financial stability of its workforce."
Spelman said the resolution is the first of a series of financial empowerment initiatives that his office will unveil over the next year.* "There's a domino effect at work: nearly 150,000 households in Austin rely on alternative financial services to manage their basic living expenses," he said.* "And more than a third of this group has to borrow just to pay their rent or utility bill.* With interest rates averaging around 400% APR, people are borrowing five or six times just to pay off that original utility bill.* So, it's important for the City of Austin to take a leadership position and create opportunities to break that cycle."
###
RESOLUTION NO. 20100930-025
WHEREAS, in December 2009, the Federal Deposit Insurance Corporation (FDIC) estimated that more than 20% of households (146,000 households) in the Austin-Round Rock Metropolitan Statistical Area (MSA) are "underbanked" and rely on alternative financial services, including non-bank money orders, non-bank check cashing, payday lending, or pawn shop lending; and
WHEREAS, racial and ethnic minorities, as well as lower-income households, were significantly more likely to be underbanked, according to the 2009 FDIC study; and
WHEREAS, the 2006-2008 American Community Survey 3-year Estimates found 13% of the total MSA population lived in poverty, and 22.8% of African Americans and 19.2% of Hispanics in the MSA lived in poverty; and
WHEREAS, a 2008 report by the Center for Financial Services Innovation estimated that 38% of the underbanked borrow to pay basic living expenses; and
WHEREAS, in 2008 the country's largest publicly-traded payday lending institution, QC Holdings, reported that its average loan over 2005-2008 was close to $360 with a term of 16 days and a fee of approximately $53 - a 400% annual percentage rate; and
WHEREAS, according to the Corporation for Enterprise Development, substantial research evidence indicates that building a household's assets "increases economic security, encourages initiative and risk-taking, increases economic confidence, increases home and business ownership, increases financial skills, strengthens families and communities, and improves the prospects of future generations"; and
WHEREAS, United Way Capital Area and PeopleFund launched the Bank on Central Texas program in June 2010 to create public awareness of the importance of being banked, promote access to financial products tailored for the underbanked or unbanked, and provide financial education and capacity building for the underbanked and unbanked; and
WHEREAS, a 2009 Center for Financial Services Innovation report indicated that workers enrolling in a direct deposit program can reduce transaction costs associated with converting paychecks into cash or money orders, can increase personal safety by not carrying large amounts of cash, and can build savings opportunities through their interactions with financial institutions; and
WHEREAS, on average 90% of City of Austin workforce is paid through direct deposit; NOW, THEREFORE,
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF AUSTIN:
The City Council accepts the invitation of the United Way Capital Area and PeopleFund to become a community partner and leader in the Bank on
Central Texas (BOCT) effort. The City Manager will designate a liaison from the city staff to collaborate on BOCT programs.
BE IT FURTHER RESOLVED:
The City Council directs the City of Austin to participate in the BOCT Employer Campaign, a program designed to highlight the commitments to and successes of financial empowerment programs of the largest employers in Central Texas.
As its first public commitment, the City Council directs the City Manager to use all necessary effort consistent with legal requirements to achieve a 98% electronic wage payment rate by September 30, 2011. Among these efforts, the City Manager should work with employees receiving paper checks to identify their individual barriers to receiving an electronic wage payment, and where appropriate:
1. Offer financial coaching to the employee, either through the City's Human Resources Department or in conjunction with existing programs offered by community organizations; and
2. Identify financial products through the BOCT program that may benefit the employee, whether they are BOCT accounts, prepaid card accounts, or more traditional bank or credit union accounts.
The City Manager should also develop procedures to encourage new employees to enroll in electronic wage payment. The City Manager will present the interim results of this initiative to Council by April 30, 2011 and the final results of the year-long effort by October 15, 2011.
BE IT FURTHER RESOLVED:
Over the course of Fiscal Year 2010-2011, the City Manager will work with BOCT leaders to help identify solutions to bring the electronic wage payment rate as close to 100% as is legitimately possible consistent with legal requirements within a reasonable but accelerated timeline.
BE IT FURTHER RESOLVED:
The City Manager will work with BOCT to create other Employer Campaign programs that can be offered to city employees and which serve as a leadership model for other Central Texas employers. These programs should be presented to the City Council for its review by April 30, 2011.