New York unveiled a new guide to expanding access to low-cost bank accounts for New Yorkers in recognition of National Financial Literacy Month, Governor Kathy Hochul announced Friday.
New DFS guidance encourages state-regulated banks to offer certified accounts”Bank On” to meet the state’s affordable banking requirements.
The bills Bank On they eliminate overdraft fees and are instrumental in bringing people from underserved communities into the banking system. These reforms are critical to helping low-income New Yorkers access affordable, FDIC-insured banking options that protect and grow their hard-earned savings.
This builds on the Governor’s financial inclusion agenda that includes addressing debt and surprise billing, helping families and graduates with student loans, strong consumer protection and transparency requirements for financial products, and other recent actions to help New Yorkers gain financial security.
According to a survey conducted by the FDIC, an estimated 7.1 million households in the US were unbanked in 2019, meaning no one in the household had a checking or savings account at a bank or credit union. Consumers in low- and middle-income communities have often had to pay bank account fees if they overdraw their account, fall below a balance limit, or don’t use their account regularly. Under current law, banking institutions are required to offer lower-cost banking services either through New York Basic Banking accounts or through an alternative that is equally advantageous to consumers. These accounts eliminate costly fees to expand access to bank accounts among low- and middle-income communities.
make the accounts Bank On An alternative to the existing offering of New York Basic Banking accounts is a critical step in improving financial access and improving financial literacy across the state. The bills “Bank On” are nationally recognized and widely available. Affordable bank accounts like “Bank On“that eliminate overdraft, account activation, closing, dormancy, and low balance fees are critical to bringing people from these underserved communities into the banking system. The program Bank On has inspired millions of consumers across the country to open new bank accounts, and this action will help make these accounts more accessible throughout New York State.
A 2020 study by the Federal Reserve Bank of St. Louis found that 80% of consumers who opened accounts Bank On they were new to that institution, and nearly 60% opened in largely minority neighborhoods. The regulatory guideto extend account availability Bank On nationally recognized by allowing New York banking institutions to offer those accounts as an alternative to the existing Basic Bank account. The bills Bank On follow a standard established to offer account features with low or no fees, including overdraft fees.
find a copy of Bank On Guidance in it DFS website.
“Financial literacy is a life skill essential to everyone’s financial well-being, which is why New York State continues to take bold steps to increase access to affordable banking services,” Governor Hochul said. “The COVID-19 pandemic has shown how important financial security is for all New Yorkers, and access to low-cost banking services is critical to managing and securing their financial needs. These new accounts will help hard-working people in underserved communities get the affordable and accessible banking options they need and is a crucial step in ensuring a more inclusive economy for all.”