News Column

U.S. Sen. Murphy wants to help New Haven residents get banking services

February 6, 2014

By Brian Charles, New Haven Register, Conn.

Feb. 06 -- NEW HAVEN -- U.S. Sen. Chris Murphy , D- Conn. , moved by a story in the Register, has asked for federal intervention to reduce the number of city households that don't have bank accounts and too often rely on check-cashing services. In a letter Murphy wrote to the Consumer Financial Protection Bureau , an agency born out of the most recent financial crisis, and responsible for advocating for consumers of financial services, Murphy asked that a pilot program to help connect people to traditional financial services be brought to New Haven . "This is a problem throughout much of Connecticut , but is, according to a recent article in the New Haven Register , particularly acute in the city of New Haven , which has more than 6,000 'unbanked' families -- double the national average. As you know, unbanked families are usually low-income, may be new to the country, and often lack formal education," Murphy said in the letter. "These families can also expect to pay more than $40,000 in check cashing fees over the course of their life. Considering that 26 percent of New Haven residents are currently living in poverty, this increased financial burden is particularly harmful." Check cashing stores traditionally charge 2 percent on each check cashed. People without bank services often say they don't write enough checks, or have enough money to open a checking account; in some cases, they don't want to incur large banking fees they associate with a checking account, according to a study by the Brookings Institution . A pilot program, 'Your Money, Your Goals', is being attempted in cities around the country, including Hartford . The CFPB's program uses social services providers to connect low-income households with financial advisers and services such as banks. "I believe that the CFPB's 'Your Money, Your Goals' initiative is a thoughtful way to start to solve this problem in communities like New Haven , where there is a strong network of social service agencies already in operation that will benefit from the training that your agency can provide," Murphy said in the letter. Murphy has not set a timetable for bringing the federal program to New Haven . The Jan. 11 Register story, "One in seven New Haven households do business without a bank," described the plight of the more than 6,000 unbanked households in New Haven . Despite being moved to act by the story, Murphy said he first became familiar with hefty fees paid by people without bank services when he shadowed a New Haven homeless man for a day in December. "When the homeless do get a job, they spend a lot money cashing checks," Murphy said. "It's clear to me that for those with low incomes, especially those on the margins of society, the cost of banking is high." Have questions, feedback or ideas about our news coverage? Connect directly with New Haven Register editors at AskTheRegister.com . ___ (c)2014 the New Haven Register (New Haven, Conn.) Visit the New Haven Register (New Haven, Conn.) at www.nhregister.com Distributed by MCT Information Services


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Source: New Haven Register (CT)


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