A program designed to draw thousands of residents out from the financial shadows has come to Newark, N.J. after proving successful in cities throughout the country. Mayor Cory Booker and officials from Newark Now announced "Bank on Newark" this week, a program that encourages residents with spotty banking histories and illegal immigrant status to start bank accounts and get counseling on healthy financial practices. "Today we are planting seeds that will help make the wealth and financial infrastructure of our community grow," the moderate-liberal Democratic mayor said this week at a City Hall press conference.
City officials estimate that nearly 15,000 Newark residents do not have checking accounts, relying instead on costly check cashing services that can result in poor credit, higher rates on loans and mortgages, and in many cases physical danger. Deputy Mayor Stefan Pryor estimates that residents participating in the program will save upwards of $2,000 a year, not including the benefits of improved credit.
Eleven banks and credit unions, with over 35 branches throughout the city, are partnering with Newark and offering checking accounts to residents who would otherwise be barred from opening accounts. Residents who may have written bad checks in the past normally go on a registry and are forbidden from starting over at other banks. Now banks like Citi, Wachovia and PNC will help people pay restitution or in some cases forgive debts altogether to individuals who have not committed "blatant fraud." Participating banks are required to accept a $25 minimum opening balance and no monthly minimum balance. Banks also provide one free money order a month and a one time fee waiver for overdrafts.
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