YOU EARNED IT, KEEP IT:

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• YOU EARNED IT, KEEP IT
• Innovative Strategies for Low-income Families in
  San Francisco
• Treasurer José Cisneros
• City and County of San Francisco

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Background

• The WFC was created by Mayor Gavin Newsom and the
  Treasurers Office to
• Encourage all eligible families to apply for the
  federal Earned Income Tax Credit (EITC)
• Estimates suggest that between 12 20 million
  is left on the table each year by eligible San
  Francisco Families
• Encourage families to stay in San Francisco by
  helping them to save and build assets
• The cost of living in San Francisco is one of the
  highest in the world
• The percentage of children in San Francisco is
  one of the lowest in America
• Link families to services such as healthcare,
  bank accounts, food stamps and other work supports

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What is the WFC?

• The Working Families Credit provides a match to
  the federal EITC.
• During the two-year pilot program the WFC
  provided a percentage match to the EITC. In year
  three, this changes to a 100 flat rate match for
  eligible families.
• Any family is eligible for the Working Families
  Credit if they
• Claim and qualify for the EITC
• Have at least one dependent child
• Currently live in San Francisco, and lived in
  San Francisco at the time of their federal tax
  filing
• Eligibility is determined by verifying IRS tax
  transcripts.

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Who claims the WFC?

• Extensive evaluation based on two year survey and
  database information found
• The majority of WFC recipients are Asian, but
  African American and Latino applicants
  increased in year two
• Most families earn between 10,000 and 25,000
  and have no higher education than a high school
  degree
• Applicant families are typically small, few have
  more than two children
• Many applicants receive the maximum EITC amount

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Results from the two-year pilot

• Year one
• Mailed checks to approximately 9,700 eligible
  families
• Average check amount 220 (10 match of EITC)
• Reflects over 20 million claimed in EITC funds,
  and a further 2.2 million provided from the City
  and philanthropic partners
• Year two
• Increased applications by 13 Citywide, by over
  20 in target neighborhoods
• Mailed checks worth a total of 2.3 million to
  11,500 families

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Public/Private Partnership

• The success of the WFC can be largely attributed
  to a unique partnership between key partners
• City agencies the Treasurers Office and
  Mayors Office created and ran the program, with
  outreach support from other departments
• HR Block provided 1 million gift to support
  the credit payment to families funded an
  extensive media and marketing campaign
• Community partners key non-profits assisted
  with program development and implementation,
  marketing and outreach
• Financial institutions Bank of America,
  Citibank, Wells Fargo made financial
  contributions to the credit payment. Fourteen
  institutions cashed checks and opened accounts
  for free

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Future of the WFC

• WFC has moved beyond the pilot and is now
  permanently housed within the Human Services
  Agency
• Invaluable database and evaluation from the pilot
  now allows us to link families to other benefits
• Evaluation of the data shows that only 10 of WFC
  families currently claim food stamps
• In a city with universal healthcare for children,
  15 are reporting their children have no
  insurance
• Many families still rely on check cashers and
  have no bank account

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The Unbanked in San Francisco

• Data from the Brookings Institution estimates
• 50,000 San Franciscans are unbanked.
• Among African Americans and Latinos, 50 percent
  are unbanked.
• The majority of unbanked are between 18 and 45.
• While largely low-income, 25 of the unbanked
  earn between 25,000 - 45,000 a year.

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Bank on San Francisco

• Collaborative effort to bring 10,000 unbanked San
  Franciscans into the financial mainstream within
  the two year pilot.
• Public/Private Partnership
• Office of Treasurer José Cisneros
• Federal Reserve Bank of San Francisco
• EARN
• 15 partner Financial Institutions (10 banks, 5
  credit unions), over 170 branch locations
• Community based organizations

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Why Bank on San Francisco?

• Without a bank account, families spend hundreds
  of dollars a year on check cashing fees and money
  orders.
• The unbanked have no safe place to keep their
  money, and are more likely to be victims of
  crime.
• In the event of a disaster, like a fire or an
  earthquake, families have no way to access money
  remotely.
• Studies show that the unbanked are less likely to
  save and build assets.

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The Unbanked in SF

• The demand for financial services is high check
  cashers and payday lenders in San Francisco sell
  over 40 million worth of financial service
  products every year.
• Many unbanked have the means and desire to open a
  bank account at a mainstream financial
  institution.
• Despite the prevalence of check cashers in the
  city, the banks and credit unions do have a
  significant branch presence in low-income and
  minority communities.

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Location of Bank Branches in San Francisco
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Regulating Check Cashers and Payday Lenders

• Using a stick as well as a carrot to help the
  unbanked
• The prevalence of check cashers, particularly in
  the low-income communities in the city, emerged
  as a key concern.
• San Franciscos core providers of check cashing
  and payday lending services sell over 40 million
  worth of fringe financial service products every
  year out of 56 locations.
• The average establishment in the city has a sales
  volume of 737,000.
• Implemented a temporary city-wide moratorium on
  new fringe financial providers, and now creating
  permanent ways to limit density through Citys
  zoning laws.

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Focus Groups Findings

• Held focus groups with unbanked African American
  and Latino men and women.
• Poor credit emerged as a source of significant
  frustration and regret.
• The idea of a second chance resonated greatly.
• Endorsement by the Mayor and Treasurer lent
  credibility to the program.

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Focus Group Findings

• All participants used check cashers and agreed
  that fees are too high.
• Hidden fees associated with bank accounts a key
  deterrent.
• Credit unions perceived as more trustworthy than
  banks.
• Bad credit caused the most emotional responses
• Bad credit doesnt mean Im a bad person
• When you have bad credit, you get the door
  closed for everything
• My credit is totally messed up. I did things
  when I was younger that I am still paying for
• I deserve a second chance

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Forming the Coalition

• Mayor and Treasurer convened all San Francisco
  Financial Institutions at the Federal Reserve
  Bank.
• Formed series of working groups.
• Developed program collaboratively to ensure
  buy-in to goals and objectives.
• Developed the Bank on SF product.
• Variety of products in existence, all financial
  institutions had to stretch in some way.

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The Bank on SF Commitment

• To participate, financial institutions must
• Offer a low or no cost account.
• Accept the Mexican and Guatemalan Consular ID
  cards as primary identification.
• Open accounts for those with ChexSystems history
  which is over 1 year old.
• Open accounts for those on ChexSystems less than
  1 year old with financial management training.
• Waive one set of NSF/OD fees per client.
• Require no monthly minimum balance requirement.
• Participate in four financial training sessions
  in the community each year.
• Actively partner with community groups to promote
  the product.
• Track accounts and report out on a quarterly
  basis.

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Partner Institutions

• Currently fifteen partner banks and credit
  unions
• Bank of America
• Bank of the West
• Citibank
• Mission Area Federal Credit Union
• Mission National Bank
• Northeast Community Federal Credit Union
• Patelco Credit Union
• San Francisco Federal Credit Union
• Spectrum Federal Credit Union
• Sterling Bank and Trust
• Union Bank of California
• United Commercial Bank
• US Bank
• Washington Mutual
• Wells Fargo

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Data Tracking and Evaluation

• Financial Institutions report on a quarterly
  basis.
• Provide data on total number of accounts opened,
  accounts closed, NSF/OD charges, zip codes,
  average balances.
• Looking at ways to further evaluate the program,
  including a case study and survey of participants
  and non-participants.

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Marketing Campaign

• Engaged international marketing and media firm
  McCann Worldgroup.
• Agreed to start with an outdoor media campaign to
  create buzz around the program.
• Segued into direct outreach campaign.
• Continuing work on new website, revised print
  materials and expanded media opportunities.

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• BILLBOARDS / BUS INTERIORS

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• BANK POSTERS

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Outreach Strategy

• Overwhelming response from across the City.
• Identified the need to use trusted messengers.
• Limited resources make outreach challenging.
• Focus on large scale service providers.
• Engage smaller community groups through the
  website.

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How are we doing?

• Data is still very preliminary.
• Estimated 5,000 accounts opened to date.
• Average monthly balance is over 700.
• Interest from other cities is high Los Angeles,
  Boston, Seattle and many others.
• Hoping to create an easily replicable model to
  help other cities.

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Contact information

• Leigh Phillips
• Program Manager
• Bank on San Francisco
• Office of the Treasurer
• City and County of San Francisco
• Phone [phone]
• E-mail leigh.phillips_at_sfgov.org