Jose Cisneros and Bank on San Francisco

America has long been regarded a land of opportunity. In fact, "opportunity" is almost certainly the cornerstone of the American Dream: The opportunity to own a home, the opportunity to become educated, the opportunity to start a business, the opportunity to become financially secure. And while these opportunities don't necessarily require entering America's cultural or social mainstream, they almost always require entering America's financial mainstream.

In just two short years, San Francisco City Treasurer, Jose Cisneros-with the cooperation of a dozen major financial institutions and the city itself-created a new opportunity for San Francisco's immigrants, working poor and underprivileged: Bank on San Francisco. Bank on San Francisco embraces and empowers individuals who would otherwise be overlooked by America's financial mainstream. As a result, many of San Francisco's working families and working poor are able to enjoy opportunities that were once unavailable.

Bank on San Francisco's unusual origins date back to 2003, when it became apparent that the Federal Earned Income Tax Credit was being widely underused by San Francisco's working families. The Federal Earned Income Tax Credit, allows as much as $4,000 to be available to families (with at least one child) earning less than $39,000 annually. By some estimates, more than $12 million annually was going unclaimed by poor families in San Francisco alone. San Francisco Mayor Gavin Newsom charged City Treasurer Jose Cisneros with the job of promoting this tax benefit. San Francisco sweetened the deal by offering $100 and access to a network of existing local financial benefits to eligible residents who joined the city's Working Families Credit Program (WFC).

Cisneros worked with community groups and the local offices of corporations such as H&R Block to get the word out. In the first year WFC received over 10,000 applications. In the second year WFC saw an additional 13 percent increase in applications. And the best part, according to Cisneros, was that "people are getting the money they are already owed."

As Cisneros proudly watched checks flow from his office to families in need, he grew concerned. He knew that most of the people who were receiving the money did not have bank accounts. Some people did not have the necessary identification or a social security number. Some people were immigrants. And some simply never had enough money to merit the expense of a checking account with monthly fees or minimum balances. Cisneros realized that a substantial portion of the money he had worked so hard to put into the hands of working families was going into the pockets of check cashing firms. For Cisneros, it was the proverbial "a ha!" moment.

As City Treasurer, Cisneros was a government official who had very close ties to some of the largest financial institutions in the country, and the clout to engage in a series of conversations with them. He told banks and credit unions of his concerns about low income people and their relationships with the banking system. In an audacious move, Cisneros asked a group of corporations that competed commercially to cooperate philanthropically. But their response was even more surprising. All of the banks Cisneros approached wanted these customers. They were, however, cautious. The banks often experienced mixed results when working with poor and underprivileged customers.

Cisneros knew the answer: combine forces. Government and commerce could work together and create an outreach like never before. It was important that the Office of the Treasurer be the face of the program. Banks would certainly appear disingenuous to a skeptical population that considered "big business" to be self serving in the lower income sections of the city. And the message had to be simple and friendly: If you don't have a bank account, here was an easy way to start. All you had to do was walk in the front door and ask to open a "Bank on San Francisco" account.

There was one more hurdle. Cisneros and his partners had to determine exactly what that account would be. Three requirements emerged from Cisneros' discussions with the financial institutions. First, fees had to be reasonable for a starter account. This meant not just low monthly fees, but no minimum monthly balances. Second, it was inevitable that some checks were going to bounce. Cisneros persuaded the banks to waive bounced check fees the first year. Finally, banks would have to accept identification other than driver's licenses. Most important for immigrants, they had to accept Consulate identification cards. Under Cisneros' leadership, the banks agreed to all of these principles. And some, like Citibank, added additional features, including debit cards.

Cisneros and his group of 12 banks and credit unions- along with the Federal Reserve Bank of San Francisco-launched Bank on San Francisco at the end of 2006. McCann Erickson Advertising offered to market Bank on San Francisco for free. A private report commissioned by San Francisco estimated that there were more than 50,000 people in San Francisco outside the banking system. Bank on San Francisco was hoping to lure 20 percent, or 10,000 people, back into the system. Already, the response has been overwhelming. In the first quarter of 2007 the program pulled in over 2,000 new accounts.

Employing one of the lessons Cisneros learned from the Working Families Credit program, the Bank on San Francisco team is aggressively working with community leaders and employers to spread the news. Local unions have also been supportive, with some unions estimating that as much as 50 percent of their members are without bank accounts.

And word is starting to get out about Bank on San Francisco-not just in the city, but across the country. The bank has received calls from city officials in Los Angeles and Boston seeking information about the program. Bank on San Francisco was invited to send representatives to the U.S. Council on Mayors. And Cisneros has been asked to speak before the California Assembly Banking Committee in Sacramento, after a panel of experts commissioned by the Assembly determined Bank on San Francisco was "one of the most revolutionary programs they had seen."

So what is next? Cisneros is investigating new ways to help people move up the inco me ladder and has determined that "asset building" in its many and varied forms is the key. One option is ho me ownership. Another is higher education, and a third option is small business ownership; all of the opportunities regarded as funda mental to the A merican Dream. And one of the first steps always seems to be a bank account. So in truth, this story isn't so much about Bank on San Francisco , as it is about all the opportunities that begin with Bank on San Francisco . One can only imagine where it goes next.