Impact Stories

Smart accounts, smart business

How financial institutions can give “unbankable” people a way to get back in the game — and a place to belong.

The words “inclusive” and “banking” don’t always go together. Remarkably, not everyone qualifies for a checking account due to bad credit or a pattern of overdrafts beyond their control.

Can “unbankable” people belong?

When Brandi McKnight, VP of Credit Administration at Clearwater, realized there were people in the Missoula community who were considered “unbankable,” she knew there had to be a better way.

So did Bill St. John, Senior VP of Branch Banking. Together, Brandi and Bill set out to ensure that every Missoulian had a place to bank, and to belong.

Man and woman sitting at a table talking and smiling.

The stakes are high for struggling families

“It hits home for me to see people going to retail stores to cash a paycheck or reload their debit card, because I know the fees they pay to do that,” Brandi said. “Sparing them these fees could mean extra groceries for a struggling family.”

Teller helping with a transaction.

The real challenge

Brandi’s and Bill’s concern for the growing number of unbanked Missoulians was well founded.

In 2016, the Center for Responsible Lending (CRL) conducted a study called “How Overdraft Fees Harm Consumers and Discourage Responsible Bank Products.” Its researchers estimated that consumers pay nearly $14 billion annually in overdraft fees. In fact, many financial institutions engage in abusive overdraft practices that ultimately force some consumers out of the banking system altogether, the study confirmed.

For unbanked Missoulians, the existing options were not sufficient. While they could have a savings account, they couldn’t get a spending account — which is both inconvenient and costly, considering check-cashing service fees and the excessive cost of using prepaid cards to load money, check balances, or use an ATM.

Developing a solution

Brandi and Bill wanted to prove that it was possible to welcome underserved Missoulians into our credit union family and give them the opportunity to thrive.

They wanted an account that:

  • Eliminated the potential for overdraft fees
  • Worked like a debit card
  • Allowed members an entry point into successful banking

So they developed Smart Spend: the account that gives previously unbanked members access to services at about a third of the cost.

SmartSpend opens doors for underserved people

Our credit union rolled out the program slowly, conducting a field test in 2015 with one member piloting the program. We’ve since opened 608 accounts, many of which have transitioned to traditional draft or checking accounts. Some members have even continued this program after moving out of state.

SmartSpend accounts opened

Developing this program meant people who couldn’t get approved for any other type of account now have a viable alternative. We give them a cost-effective way to spend and build a relationship with a financial institution.

— Bill St. John, Senior Vice President of Branch
Woman signing banking paperwork with a loan officer.

Helping members move forward

A product like Smart Spend not only proves that banking can — and should — be more inclusive. It also proves that doing the right thing can effectively help our members move forward in their lives and achieve greater things.

Image of coworker helping a member at a teller station.

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