Bank Transfer Day with all its attention on high fees may havecome and gone but the kickoff this month for a locally sponsoredcampaign in Rapid City, S.D., against payday lenders is drawing newattention to the efforts of credit unions and community banks toaid the underserved.

But, city leaders say, it remains to be seen what impact the“Bank on Rapid City” venture will have in reducing payday dependence. The Dakota venture is modeled aftera League of U.S. Cities initiative which got its start in SanFrancisco and is now in 50 cities.

“We have been doing the preparation and the financial trainingfor nearly a year now and it just so happens” the launch by thecity's Community Development Division came in the midst of the BankTransfer Day media blitz, said Barb Garcia, coordinator for Bank onRapid City.

The city launched its program Nov. 14 with a goal “to increaseaccess to banks and credit unions and help citizens avoid high feesand interest rates that prevent them from building savings andbecoming financially stable.”

Four FCUs – Black Hills, Minuteman Community, Sentinel andHighmark – along with three banks signed on for the program,offering low-fee starter savings and checking accounts to“unbanked” and “underbanked” people, as well as “second chance”accounts for people who might otherwise be turned away but agree toparticipate in a financial education course, said Garcia.

Payday lenders, said Garcia, provide a needed service in quicklylending small amounts of money – $500 and under – to people whoneed it and these “are niches that traditional banks won'thandle.”

But the 400% rates that payday shops are charging in SouthDakota are harming the people they serve, Garcia said.

Officials of the $910 million Black Hills FCU, the state's largest, said it was activelysupporting the “Bank on Rapid City” program to serve the unbanked.They also also noted that Bank Transfer Day itself was mostly anon-event in western South Dakota, with negligible account movementreported.

Wells Fargo has a local presence and pulled out of the “Bank onRapid City” effort, Garcia said, adding that it was a decision “byits corporate managers outside of Rapid City” after it beganimplementing $3 debit fees.

The California bank later halted the fees in South Dakota andother states after Bank of America's planned new fees kicked offthe Bank Transfer Day phenomenon.

The 'Bank on Rapid City” program, said a release, is designed to“create relationships among local governments, citizens, localbanks and credit unions and community partners to ensure that allresidents have access to bank accounts, financial education andother asset-building opportunities.”