On its own, the simple action of certifying an account may not sound like a high-impact move, however the benefits of adding a Bank On-certified account to a credit union's product lineup can be substantial and lasting, according to the CFE Fund and Leagues. In particular, the CFE Fund works with over 100 Bank On coalitions nationwide, which include local governments and community organizations, and these coalitions can refer the under- and unbanked individuals they serve to local financial institutions with Bank On-certified accounts. While assisting individuals who they believe could benefit from joining a traditional financial institution, coalitions make recommendations from a list of Bank On banks and credit unions, knowing the certification signals the availability a safe and affordable account. And, credit unions on that list may unlock a new source of potential business – while fulfilling their mission of bringing mainstream financial services to the underserved.

Jonathan Mintz

"Creating a single national standard that was endorsed by regulators, financial institutions large and small, advocates, consumer organizations and elected officials, and having everybody on the same page with a single ask, was driven by the idea that this would make it easier for financial institutions to focus their efforts," CFE Fund President/CEO Jonathan Mintz said of the Bank On certification.

What's more, a partnership between the CFE Fund and the Federal Reserve Bank of St. Louis established the Bank On National Data Hub, which allows for the collection and analysis of data on Bank On accounts and account holders, such as account openings and usage and account holders' online banking activity. According to the Bank On National Data Hub's 2020 findings, 82% of consumers who had opened Bank On-certified accounts to date were new to the financial institution offering the account.

"These accounts aren't largely just something where an existing customer says, 'Oh that's better, I'll switch.' It's bringing in new blood," Mintz said.

Mintz also noted that the beauty of the data hub's report, which is published annually, is that it "not only helps individual organizations like credit unions take a look at how they're doing in their efforts, and how their new customers are performing, but allows them to benchmark their efforts against the rest of the community and their fields as a whole."

Since the Bank On project launched in 2017, 270 accounts have been certified nationwide, according to the CFE Fund's database. Of those accounts, approximately 13% are offered by credit unions, and over 50% are at financial institutions with $2 billion or more in assets, Mintz said.

The CFE Fund first connected with the California and Nevada Credit Union Leagues about four years ago, according to Mintz, and now that they've officially launched a push for Bank On certification in the two states, his organization is talking with local credit union leaders about the details of the certification, answering questions and sharing data.

The CFE Fund's database of Bank On accounts currently does not list any Nevada-based credit unions, but includes six California-based credit unions:

• The $2.3 billion, Rancho Cucamonga-based Arrowhead Credit Union's Arrowhead Spending Account
• The $2.1 billion, Downey-based Financial Partners Credit Union's EZ Card Checking Account
• The $1.2 billion, Glendale-based LAFCU's Connect Transaction Account
• The $3.4 billion, Chatsworth-based Premier America Credit Union's Smart Spending Account
• The $993 million, Irwindale-based SCE Federal Credit Union's Checkless Checking Account
• The $112 million, San Bernardino-based Thinkwise Federal Credit Union's Smart Start Checking

Diana Dykstra

Diana Dykstra, president/CEO of the Leagues, said her association will be discussing the benefits of Bank On certification during recurring calls with credit union CEOs, as well as enabling the region's existing Bank On credit unions to share their stories of why earning the certification has been worthwhile. She emphasized that the Bank On certification has the power to unify credit union deposit accounts catered to the under- and unbanked under a single, recognizable brand, generating awareness about credit unions as trusted financial partners for consumers who may feel they have been left behind by the financial system as a whole.

"[The Bank On certification] tells the consumer, once we can get the story out, that this is a place where they can go, and that they can go mainstream, instead of going to check cashers and all the other dubious suppliers in the market," Dykstra said. "It's really about explaining why you're a safe place for consumers who need access and don't know where to go."

And, Bank On certification means the account and the institution that provides it has earned a stamp of approval from public officials within Bank On's coalition.

"One of the other goals and benefits of a central national certification is it allows elected officials to be able to rely upon the Good Housekeeping-type seal, and integrate banking access into public programs," Mintz pointed out. "It allows the government to endorse it and to facilitate it."

When asked why credit unions might hesitate to pursue a Bank On certification, both Mintz and Dykstra indicated many believe they are already doing enough to serve underserved markets. Mintz also noted credit unions may assume they'll need to create an entirely new product to earn the certification, when in reality they may already offer an account that meets the requirements (or one that simply needs a few tweaks to meet the requirements).

"Credit unions don't need to be convinced that one important way to serve their communities is to bring people into the financial mainstream with the right products," Mintz said. "But they in many cases felt that they were already doing great stuff and didn't need the boost of a Bank On partnership."

He added it's important to note that earlier in the COVID-19 pandemic, when unemployment and stimulus payouts were being widely distributed, state governments and even the IRS connected under- and unbanked individuals receiving payments to financial institutions offering Bank On-certified accounts.

"Once credit unions have seen that the IRS, states and cities are endorsing certified accounts and connecting people with more than just messaging – actually connecting them literally through public programming and disbursement of money – added to the fact that 83% of people who sign up for a Bank On account are new, I think they will realize this is a win-win," Mintz said.

In a July 2022 interview posted to YouTube by the Leagues, Joe Brancucci, SVP and chief lending officer for Financial Partners (one of the six California-based Bank On credit unions), discussed his journey of implementing the credit union's Bank On-certified EZ Card product and its role in the credit union's long-term strategy of embracing underserved populations, such as immigrants and those targeted by predatory lenders. The credit union also encourages EZ Card holders to consider its Credit Builder Loan, a small loan of $600 or $1,200 that becomes available to borrowers after 12 months of on-time payments and helps them build credit history.

Brancucci said these products have provided a point of entry for the underbanked, helped these consumers feel comfortable going to the credit union for help, and taught them financial discipline.

"When you do something special for the person, they remember that. If you make them feel good about themselves, you can help them find success," he said.

Brancucci added that the impact of the EZ Card and Credit Builder Loan hasn't materialized in the form of account openings, but in the stories told, sometimes by individuals one wouldn't expect to need financial help because of their high-paying profession. In one instance, he said, a nurse found herself in financial trouble after falling victim to predatory lenders; after working with Financial Partners, she sent a note thanking the credit union for changing her life.

Those life-changing success stories represent the finish line of a credit union's journey with the underserved, and obtaining a Bank On certification is an important step to take along the way, according to Dykstra.

"Once you get someone into a traditional financial institution, they save money – they're not ­going to check cashers, they have access to credit and debit cards. So their financial life starts to build," she said. "[Bank On] gets people in the door because it's easy and gives them access to the services they need, but the whole end game is to improve their financial lives."