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Checking for the unbanked

By David McMillin · Bankrate.com
Monday, September 24, 2012
Posted: 6 am ET

The Federal Deposit Insurance Corp.'s latest survey indicates more households are becoming members of the unbanked population. As prepaid cards continue to gain popularity, many of these consumers may be unbanked by choice.

However, if you fall into the category and you do not want to be there, there may be hope. Some banks and credit unions offer checking accounts specifically aimed to consumers whose credit histories have prevented them from joining the mainstream banking industry.

A number of financial institutions offer these accounts, including one of the biggest banks --  Wells Fargo. Richele Messick, spokeswoman for the California-based bank, says that the bank's Opportunity Checking program is specifically geared to consumers who need a fresh start with their personal finances.

"The account is designed to help banking customers who might have gotten off on the wrong foot to re-establish their checking account history, manage their accounts and take advantage of the benefits of financial services," Messick says.

For those who qualify, I have a warning for you. The requirements for avoiding fees are tougher than the bank's standard accounts. While Wells Fargo customers can avoid monthly fees for carrying a $1,500 minimum daily balance or arrange a direct deposit of $500, previously unbanked customers must maintain a minimum balance of $2,000 or arrange direct deposits of $750.

Some banks with similar programs do not offer the option of waiving fees. Chicago-based First American Bank's Fresh Start Checking comes with a non-negotiable $9.95 per month.

Regardless of fee structures, only a select group of unbanked consumers can take advantage of these types of programs. Wells Fargo's and many similar accounts continue to exclude certain consumers from the banking system.

"Individuals who have previously mismanaged a Wells Fargo account resulting in a charged-off balance, have had a bankruptcy in the past 12 months or a record of fraudulent activity will not be allowed to open a deposit account," Messick says.

Still, for someone who made minor mistakes in the past, I think a second chance at checking is certainly worth consideration. The unbanked population can protect their money with FDIC insurance and enjoy the enhanced protection of standard debit cards.

Have you been using alternative financial services due to your personal history? Would you be interested in another chance to have a checking account?

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