Bank On Niagara County looks to boost financial outlooks

Dec. 5—One in five Niagara County residents are either unbanked, underbanked or not utilizing safe financial services. A group of regional institutions are looking to change that.

Parachute Credit Counseling, a West Seneca-based institution, has helped set up Bank On Niagara County, the first such coalition in Western New York providing safe and affordable banking services.

Parachute has had a presence in the county since 2013, offering financial education services and launching the Niagara County Financial Literacy Coalition. Noelle Carter, Parachute's president and CEO, said M&T Bank reached out to them a year ago about starting a Bank On coalition.

"We're still trying to congregate and get people together to work collaboratively," she said.

Carter added unbanked or underbanked residents can be financially distressed, unemployed or homeless. In that situation, they end up paying extra service fees for routine financial transactions, like at Buy Here, Pay Here dealerships.

Based on an FDIC survey in 2021, around 4.5% of U.S. households, or 5.9 million, are unbanked, with an estimated 14.1% of households, approximately 18.7 million, were underbanked.

In that survey, 5.9% of New Yorkers are unbanked.

David Rothstein, the leader of the national Bank On initiative, said that underbanked people spend between 5% and 10% of their money on financial services and paying bills.

"The main reason people say they don't have an account is it's too expensive," he said, referring to the FDIC survey.

Unlike standard bank accounts, these Bank On accounts are FDIC-certified and have low to no fees. These accounts can be obtained at M&T Bank, Key Bank, Citizens Bank, Bank of America and BankonBuffalo. Parachute can also direct people where they need to go for financial services.

There are currently 100 Bank On coalitions across the country, available in 60,000 bank branches and providing 420,000 certified accounts. Bank On Niagara County is the third in New York state.

Parachute hosted its first such round table discussion with bank representatives, nonprofit workers, and elected officials this past Thursday to brainstorm why people are underbanked and how to fix that.

Many of the issues brought up are a lack of trust in banks, unfamiliarity with how they work, service fees, transportation to banks, and whether classes about banking are taught in schools.

Samilka Sullivan, a director of the Niagara Falls Housing Authority, feels the services miss the mark because they do not always work with the community. She spoke with a nearly 60-year-old who just opened his first bank account, waiting for years to do it because he was afraid his money would be taken due to child support payments.

"The onus is on the financial institutions to work as hard as they can to try to bridge that divide," said Chiwuike Owunwanne, the corporate responsibility office and community relations manager for Key Bank, acknowledging they created that mistrust.

Carter said they plan on hosting more discussions like this to get the word out.