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Cascade: No. 55, Summer/Fall 2004

Delaware Bank Takes Flexible Approach for EITC Savers

PNC Bank, Delaware, expedited the opening of savings accounts at volunteer income tax assistance sites (VITA) in Delaware during the 2003 and 2004 tax seasons through a partnership with Nehemiah Gateway Community Development Corporation.

The accounts were opened at the VITA sites, instead of at bank branches as is PNC's normal practice, by low- and moderate-income residents filing tax returns and applying for federal earned income tax credits (EITCs). The site managers called an 800 number established by the bank specifically for this purpose and received temporary account numbers that were used to file tax returns electronically. The bank subsequently contacted ChexSystems to identify any applicants who had a history of mishandling accounts and mailed signature cards to approved applicants. The accounts were actually opened once the EITCs were deposited by the U.S. Treasury.

PNC Bank, Delaware, provided the accounts without charge for a year and waived its $300 minimum-balance requirement for that period.

The bank opened more than 112 accounts totaling $144,582 from January to April in 2004 and 140 accounts totaling approximately $110,000 for the comparable period in 2003, according to Norma H. Zumsteg, a PNC Bank community consultant and vice president. She says about 40 percent of the 140 accounts begun in 2003 were still open in March 2004. In 2002, EITC filers were instructed to go to local branches of PNC Bank, but few did.

"We have been excited to participate in this initiative because it's a creative way of serving the needs of the unbanked," says Zumsteg. "It takes a special nonprofit for a bank to have such a level of trust that it will make exceptions to its policy." She says PNC offers this expedited opening of accounts only in Delaware but is exploring ways to apply its experience in other markets.