Memphis residents to have alternative banking solutions

The city of Memphis announced this week a new venture that will help the underbanked receive financial support through alternative sources of credit. According to the Memphis Daily News, "Bank On Memphis" is the new directive put forth by Mayor AC Wharton that aims to get thousands of the city's underserved consumers into the financial management space. More than two dozen banks in western Tennessee received letters from Wharton that campaigned for their participation in the program. The initiative would not create a new bank, but allow existing institutions to participate in a social action plan that would support residents who struggle to receive credit or avoid banks altogether. "Right now, over 33,000 Memphis households do not have a checking account or savings account of any kind," Wharton said in his letter, according to the Daily News. The paper states that Mayor Wharton plans to meet with members of the city's banks and credit unions at the end of the month. In that meeting, officials will formulate programs that will provide low-cost solutions and consumer options for the underbanked. Currently, underbanked consumers choose short-term lending options and other short term solutions. However, the Memphis Commercial Appeal reports that more than 20 percent of the city lives below the poverty line, heightening the need for stable banking solutions for the underprivileged population. "There is no question that Memphis has a dire need for more and better wealth-building and financial literacy strategies," Wharton told the Daily News. "Combating poverty will require a sustained effort over many years, but that fight begins with programs like Bank On." Discussions will take place this month, but the Daily News reports that the program is not expected to be in place until the end of the year. Until then, officials will try to motivate underbanked residents to return to traditional financial outlets because they view them as a more stable option with long-term benefits. "Many of these people may have had a bad experience in the past," Bill Stemmler, vice president and community development officer at Cadence Bank, stated in an interview with the Daily News. "And part of this involves making products available to get them back into the financial arena instead of them doing it in a more costly way." City officials acknowledged that Bank of Memphis takes after similar programs instituted in other cities, including New York, Boston and San Francisco.