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On Thursday, the Ozarks Area Community Action Corporation or OACAC kicked off a new program to make banking easier for low-income families. KSMU’s Matt Evans has details.
OACAC is a not-for-profit organization that focuses on alleviating poverty in the Ozarks. With its Community Financial Access Project, the organization hopes to teach low-income families how to successfully manage a bank account. Twenty-two percent of low-income families across the United States do not have a bank account. Michael Johnson is the project manager for OACAC’s new project.
“I’m a former banker so I’ve seen some customers that would come in and it could be one of the first times they had come into a bank in years because they could have previously had a bad experience.”
Those bad experiences could include a bounced check or being stuck in a cycle of overdraft charges. That could make some low-income families not want to use a bank. So instead they use alternatives such as a payday loan company which can charge up to 2000% interest in a year.
Johnson says he hopes this project can provide families with the information they need to make financially responsible decisions. He says the project will be made up of a network of financial institutions like banks, credit unions, or mortgage companies.
“It will help them realize that there are other resources out there.”
Johnson also says that most low-income families simply don’t know what’s available to them.
Right now, the project is still in its early stages getting institutions on board. Alice Wingo, a spokesperson for OACAC, says she expects the program to be operating by September.
For KSMU News, I’m Matt Evans.
TAG: OACAC says the funding for its new project is coming from the federal economic stimulus package.