SACRAMENTO - Landmark economic revitalization legislation intended to help working Californians build wealth was introduced yesterday by California State Assemblymember Steven Bradford (D-Gardena). AB 38 would create Banking Development Districts (BDDs) throughout the state of California, helping financial institutions locate and provide services in areas that currently lack investment.
"AB 38 continues the effort from last year, to encourage the permanent establishment of new bank branches in underserved areas and strengthens our efforts aimed at providing financial services to un-banked communities in the State," said Assemblymember Bradford. I look forward to working with the new administration and legislators who I know will provide innovative ideas to this statewide Banking Development District program."
Based on the successful New York State program launched in the late 1990s, the BDD program would coordinate state and local incentives to encourage banks and credit unions to open in areas of California that lack mainstream financial institutions and offer low-cost products and services tailored to the needs of low-income consumers.
Approximately 1.5 million Californians are "unbanked"- meaning they lack a basic checking or savings account. Without a bank account, consumers must pay more to cash paychecks and pay bills. They also lack a safe place to store money and have a more difficult time building credit.
"I applaud Assemblymember Bradford for working to make it easier for low-income Californians to grow their savings," said Olivia Calderon, California Legislative Director of the New America Foundation. "Banking Development Districts have helped thousands in New York open bank accounts and access credit, and Californians are ready for the same opportunity."
The New America Foundation's Asset Building Program, which was instrumental in the creation of the "Bank on" model and helped take that successful program statewide and nationwide, has long advocated for banking development districts and other policies to promote the ability of working families to become financially secure and have a stake in the larger economy.
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