OneAZ Is Expanding Financial Access To The Underbanked. Here’s How.

OneAZ Credit Union ($3.4B, Phoenix, AZ) is tackling financial access in the Grand Canyon State with a series of new products aimed at unbanked consumers.

The FDIC estimates that as recently as 2021, nearly 6 million households in the United States were unbanked. Rates differ by state, but the latest Federal Reserve report on economic wellbeing found 13% of adults nationally used nonbank check cashing or money orders. For adults earning less than $25,000 per year, 17% did not have a bank account. Additionally, gaps in access to financial services remain for Black and Hispanic adults as well as those with disabilities.

OneAZ aims to improve some of those statistics.

“In some cases, we’ve seen nearly half of a person’s paycheck going to fees because they don’t have banking access,” says Chip Griffith, the credit union’s senior vice president of retail sales and operations. “It’s an ongoing cycle that’s really challenging. We’re excited to offer products and services that will help open some doors to prosperity and build generational wealth.”

New Savers

The credit union’s Propel Savings account offers savers 4.00% on balances less than $10,000 with no fees and a low $100 minimum to open. OneAZ identified the opportunity based on the current rate environment combined with focus group feedback and launched the product at the beginning of 2023.

Unlike traditional money market accounts that give account holders higher rates on larger balances, Propel Savings has a reverse tier structure that benefits new savers. OneAZ is not only looking to attract deposits in today’s market but also help members reach their savings goals faster.

“It’s open to everyone,” Griffith says. “And although it’s great for average savers that might have more than $10,000, it’s also an opportunity for new savers — including lower-income and youth members — to build their nest eggs.”

With a mission to serve the entire state, OneAZ knows it must offer a broad mix of solutions that can serve varying needs. Through the cooperative’s grant giving and foundation, Griffith says OneAZ taps into the needs of different Arizonian populations.

“We try to match our products and services to the needs of everyone, not just a small category,” the VP says.

In addition to innovative products, OneAZ also provided financial education for adults and young members.

First-Time Homebuyers

Consumers are priced out of homes in communities across the United States. According to Ken Bauer, executive vice president and chief lending officer for OneAZ, affordable housing is a major hurdle in Arizona as well.

“Particularly in Arizona, more of a person’s monthly wages are going to housing than ever before,” Bauer says. “We asked ourselves how we could help members navigate this market and bridge that gap to homeownership.”

To provide members with down payment assistance, the credit union is working with two grant programs offered through the Federal Home Loan Bank (FHLB).

The credit union launched the programs in September 2022. And although the application and implementation processes were not difficult, awareness surrounding the new programs remains a challenge. Still, they can make a huge difference for first-time homebuyers.

The Workforce Initiative Subsidy for Homeownership (WISH) Grant Program provides up to $29,000 in down payment assistance for eligible borrowers, matching $4 for every $1 the new homeowner puts down.

The Middle-Income Downpayment Assistance (MDPA) Grant provides up to $50,000. Eligible borrowers must put a minimum of $10,000 of their own funds toward the down payment.

“There’s no reason not to offer something like this,” Bauer says.

How Will You Expand Financial Access?

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A Healthy Path For Teens

In addition to new savers and first-time homebuyers, OneAZ is supporting teens with a newly expanded debit card now available to members 13 years old and older. The teen debit card requires account holders to visit a branch, where they’ll learn about healthy spending and savings habits. The visit also gives OneAZ staff the opportunity to explain what a debit card is, the logistics behind how to use it, and the potential risks.

“It’s more than just a piece of plastic, it’s an opportunity for them to learn and grow,” Griffith says. “The in-person experience gives us a chance to have a more impactful conversation. We explain things like why it’s not a good idea to post a picture of your new card on social media and some of the risks attached to it.”

OneAZ does offer online tools and resources for members but has found the teen debit conversations particularly valuable. This is especially true when the parents, many of whom the credit union already has a relationship with, sit side-by-side with their teens.

The goal for all of these programs is to boost member savings and encourage healthy financial habits.

“Everyone’s in a different place in their financial journey,” Griffith says. “We want to be there at all steps of that journey — entering their lives whenever they need us and helping everyone have the same level of financial education across the state.”

In terms of advice for others, Griffith encourages credit unions to keep it simple — make products easy to understand, easy to find online, and easy to open.

“The more difficult it is, the less adoption you’ll have,” he says.