ST. LOUIS (7/25/14)--In her quest to connect unbanked residents with financial institutions, St. Louis' treasurer has called on a credit union to lend a hand.
Tishuara Jones, who said her top priority when first elected as the city's treasurer was to improve the financial health and literacy of local families, has asked 1st Financial FCU, Wentzville, Mo., to help her achieve her goal by offering free checking and savings accounts to youth in need (St. Louis Business Journal July 20).
The $203 million-asset credit union will provide free accounts to 700 participants--between the ages of 16 and 20--of the Summer Youth Employment Program that kicked off this week.
1st Financial also will offer financial education, with an emphasis on saving, during orientation. Further, the accounts will have no overdraft, checking or debit fees, Tracy Verner, 1st Financial brand ambassador, told the St. Louis Business Journal.
"Studies show that those with savings accounts are more likely to go to college," Jones said.
St. Louis has the third highest percentage of unbanked residents in the United States at 29% compared with the national average of 8.2%, according to a 2011 study by the Federal Deposit Insurance Corp. (St. Louis Business Journal).
The local impoverished, many of them minority residents, often turn to predatory lenders such as check cashers and payday loan businesses because they either don't trust or have access to traditional financial institutions.
The estimated cost of those alternative services in lost fees and interest, the St. Louis Business Journal reported, was $89 billion in 2012, according to Center for Financial Services Innovation numbers.
Other initiatives spearheaded by Jones include: