R. Michael Lee
In the early 1900s, credit unions were founded on the principal of “People Helping People” as a way to serve the financial needs of the underserved.
Operating as not-for-profit cooperatives, they are a reflection of the local community and focus on improving members’ financial well-being and advancing the communities they serve.
Currently, there are an estimated 355,000 unbanked households in Illinois, which represents 6.9% of the state’s total households. Unbanked households in Illinois are higher than both United States (5.4%) and Midwest (5%) households. Of the 355,000 unbanked households in Illinois, 50% are Black households, 26% are White households, and 22% are Hispanic households. Over 54% of unbanked households in Illinois have less than $15,000 of annual household income.
The Bank On Illinois initiative, sponsored by Illinois state Senator Cristina Castro and Illinois state Representative Debbie Meyers-Martin, was passed in order to meet the needs of the unbanked households in Illinois. Bank On Illinois, which is administered by the Illinois Comptroller Susana A. Mendoza, is a collaborative effort between the state of Illinois, community organizations and financial institutions to provide access to safe financial products and improve the financial stability of Illinois residents.
The Bank On Illinois program is managed by a commission of 13 members, which includes financial institutions, state and local elected officials, community/social service groups and financial regulators. The commission leads efforts to certify financial products in accordance with the Bank On National Account Standards, which includes low to no cost checking accounts without overdraft and non-sufficient funds (NSF) fees.
Bank On Illinois is committed to promote and encourage financial empowerment by providing residents with information about how to use these products effectively and how to navigate the consumer finance marketplace successfully. To date, over 380,000 accounts have been opened in Illinois.
The Bank On Illinois Commission is also committed to improving financial empowerment and with recent house resolution HR270, sponsored by Illinois state Representative Maura Hirschauer, the Governor’s Financial Empowerment Task Force was established in order to provide recommendations to Gov. J.B. Pritzker for enhancing the financial capacity of students attending Illinois public colleges and universities.
As President/CEO of KCT Credit Union, I sit on the Bank On Illinois Commission and Chair the Financial Empowerment Task Force. The task force consists of 33 participants from different state agencies, local governments, universities, community colleges and financial Institutions. Though this is not credit union specific, it is a great example of how credit unions can get involved to bring our philosophy of “People Helping People” into action. We encourage all Illinois financial institutions to get involved.
For more information on Bank On Illinois, please visit: Bank On Illinois — The Illinois Office of Comptroller (illinoiscomptroller.gov).
• R. Michael Lee is president and CEO of KCT Credit Union.