American Riviera offers checking accounts with no overdraft fees
American Riviera Bank in Santa Barbara County is working to help customers in a tough economy, with services ranging from no-fee overdraft checking accounts to small business administration loans.
The bank recently announced its Simply Checking account for families and individuals who might not otherwise be able to maintain one.
Simply Checking is officially certified by the National Cities for Financial Empowerment Fund (CFE Fund) as being compliant with Bank On National Account standards. ARB is now one of 200 financial institutions across the country that offers Bank On certified accounts.
“It does not target any specific income bracket. It’s for people who don’t have the funds to maintain an account,” Laurel Sykes, chief risk officer for American Riviera Bank, told News-Press.
“People who don’t have a traditional account, like a working family making $20,000 a year, are probably paying up to $600 just for check cashing fees,” she said.
“California law caps check cashing fees at 3%. Many large institutions charge fees ranging from $8 to $10. Incentives in the banking sector aim to increase the number of unbanked people, and the number of unbanked people has fallen to 4.5%.
Ms Sykes defined two terms – “unbanked” and “underbanked”. “Unbanked” refers to no service. “Underbanked” means an account is held but services are not operated or prices are high with low balances.
“We wanted to broaden the reach in the community with 5% of the country unbanked and 15% of single mother households unbanked,” COO Joanne Funari told News-Press. “Of those who are unbanked, 21% cite the reason being that they don’t have enough money to meet minimum balance requirements.”
The American Riviera Bank Simply Checking account has no overdraft fees.
“We don’t penalize customers for making mistakes,” Ms. Funaria said.
“The trend (of unbanked customers) has come down, but it’s still too high in my book,” Ms Sykes said. “You tend to see it in different geographies based on demographics. Some are afraid of being charged fees or don’t understand how accounts work.
But she noted that progress was being made. “Government payments made during COVID contributed to 1.2 million more banked households in 2021 than in 2019.”
Key features of Simply Checking include a monthly service fee of just $5, no overdraft or insufficient funds fees, the ability to pay bills and make purchases, and federal deposit insurance. There are also various ways to avoid the $5 monthly service fee, such as setting up direct deposit or making 10 debit card transactions per month. Existing customers can also link accounts to take advantage of the combined balance option.
Simply Checking is available at each of American Riviera Bank’s five branches in Santa Barbara and San Luis Obispo counties.
“We wanted to make people’s lives easier. We are also waiving fees for those 65 and over or 25 and under,” Ms Sykes said.
The News-Press asked Ms Sykes and Ms Funari if there were any risks on the bank or customer side, particularly with speculation of a looming recession. “I don’t see a lot of risk for all of this. Maybe for large institutions there is a risk,” Ms Sykes said.
“It is accessible to a wider audience; it is accessible to everyone,” Ms. Funari said. “I don’t see any risk for the customer or the bank. It’s an additional product that will help people, and that’s what we’re doing. We are a community bank,”
The News-Press asked Ms Sykes and Ms Funari about other ways they support their clients.
“I think in general we have a number of ways to support people in the bank, business owners or first-time home buyers,” Ms Sykes said. “If a bank is a member of the Federal Home Loan Bank, it is eligible to sponsor grant programs,”
Ms. Funari noted, “ARB has been the No. 1 market share leader in San Luis Obispo (SLO) and Santa Barbara counties for four years and is a preferred lender for Small Business 7(a) loans. Business Administration (SBA). The SBA allows up to $5 million in financing and waives fees for loans up to $500,000.
“SBA loans are great for small businesses,” she said. “Small businesses have been hit hard during COVID, and hospitality has been hit hard. There is a long-term home loan with smaller monthly payments that helps manage cash flow. We want to put money aside to help small businesses grow.
“In SLO, Santa Barbara, and Ventura counties and in all of California, 95% of businesses have annual sales of less than $1 million. The state is made up mostly of small businesses. are underfunded and need support,” Ms. Funari said.
She said her bank’s mortgage department could use brokers or create portfolio loans, which was helpful to customers.
“Through a Federal Home Loan Bank, we can help low-to-moderate income borrowers make a down payment through the WISH program.”
“We can offer more than just a checking account,” Ms Sykes said. “One more thing, the last thing you want is a returned rent check. Overdraft protection transfer can set up transfers from a savings account. It’s important to go in a bank informed of all the options I think one of the other things that is imperative is that everyone knows how it all works and educational and financial awareness is imperative.
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