The Financial Journey is a unique series focused on financial education and opportunities. These stories have been created through a strategic partnership between Wells Fargo and Word In Black.
Nearly 5.9 million people in the United States are living outside of the traditional banking system. For many, it’s by choice. Recessions of the past have caused mistrust in global financial institutions, so cash – and only cash – seems safe. There’s the income problem, too. When income is unsteady, it’s hard to maintain a bank account balance. Some people resort to high-risk payday loans and check cashing, among other services. Workers with strong ties outside the country might also prefer to maintain accounts there.
A collaboration between Wells Fargo and Operation HOPE, a national non-profit dedicated to financial empowerment for underserved communities, is expanding HOPE Inside and together will launch 50 HOPE Inside centers, serving over 150 Wells Fargo branches by the end of 2026. Community members visiting HOPE Inside centers can receive free financial coaching including how to manage money and improve credit. There are currently 20 HOPE Inside centers across the Wells Fargo footprint, including in Atlanta, Houston, Oakland, Los Angeles, New York, and Minneapolis. Launched in 2022, HOPE Inside is part of a long-term strategy for Wells Fargo called the Banking Inclusion Initiative, which aims to get more people in the banking system.
Since inception, “of the clients served, 64% percent improved their credit by 10 points,” says Darlene Goins, President of the Wells Fargo Foundation. “Thirty-one percent reduced their debt by a median of over $2000. Those are situation-changing numbers for a lot of households.”
The number of people without a traditional bank account – called “the unbanked” – has made a significant shift within the past decade. It was at its highest level in 2011 when lawmakers were exploring the effects of raising the debt ceiling. Joblessness and student debt rates were plaguing workforce morale. Subprime lending tactics had hurt hopeful homeowners. Now, the unbanked rate is at its recorded lowest, with roughly 4.5 percent of people living in the United States living without a bank account.
But the COVID-19 pandemic changed who relies on the cash-only economy, and why. Drastic shifts in income forced people to close checking, savings, and investment accounts that they could no longer maintain. The expansion of HOPE Inside centers are designed to help communities recover financially by connecting people with live, in-person and virtual support. They will explain that the benefits of a checking or savings account are:
- Building up a credit history
A credit score is required for processes, such as securing a place to live or a loan.
- Paying lower fees for transactions
Pre-loaded debit cards don’t require their users to have a bank account. However, many of these products charge deposit and withdrawal fees.
- Accessing emergency funds immediately (mostly)
Having emergency savings is a best practice to help manage unexpected expenses. Bank accounts allow convenient access to funds through online banking or debit card.
- Being able to securely send and receive funds
Signing up for direct deposit is possible with a checking or saving account. Sending money to others immediately is also easy.
- Being able to monitor spending directly
This is useful for short- and long-term budgeting and can be done through online banking.
Read here for more information about this collaboration between Wells Fargo and Operation HOPE.
