ELMIRA, N.Y. — Chemung Canal Trust Company recently added a new checking product aimed at people who don’t currently utilize a bank or credit union.

 Referred to as “unbanked” or “underbanked,” these people do not use a financial institution for a variety of reasons, says Scott Heffner, senior VP and director of marketing at Chemung Canal Trust.

“Twelve million adults are completely unbanked,” he says. 

Some people have had previous bad banking experiences that make them wary or may think they don’t have enough to meet minimum-balance requirements for having an account, Heffner notes. Those people often resort to alternatives such as money orders or check-cashing services when needed, often at a price. “That doesn’t get people ahead,” he contends.

Chemung’s new BankOn checking account, launched in late June, provides an alternative to those services and a means for people to establish an account that doesn’t charge monthly fees or overdraft or nonsufficient fund fees. The debit-focused account gives customers a debit card and the ability to pay bills and make purchases.

On top of that, the account is officially certified by the Cities for Financial Empowerment Fund (CFEF) as meeting its Bank On National Account Standards. That means Chemung’s BankOn product meets more than 25 requirements for safe and affordable consumer transaction accounts. Along with the lack of fees, other requirements include a low-minimum opening deposit of $25 or less, a debit card, branch access, telephone banking, ATM access, bill-pay services, check cashing, online banking, free electronic monthly statements, and insured account deposits. Additional recommended features include making funds immediately available from the government or payroll, charging $1.70 or less for money orders, linking to free savings accounts, and offering credit-building products.

Bank On is a platform offered by the CFEF. Banks still need to develop their own product built around the Bank On standards. 

According to CFEF, on top of the 12 million adults who don’t have a checking or savings account, another 24 million adults are underbanked, meaning they use some fringe financial services. Nearly 34 percent of the unbanked and 45 percent of the underbanked households earn less than $30,000 per year. Nationally, 48 percent of Black households and 42 percent of Hispanic households are unbanked or underbanked, compared to less than 14 percent of White households.

Having a basic transaction account is the first step in establishing a mainstream banking relationship, according to CFEF. The unbanked and underbanked lose out on cost savings and the stabilizing benefits of having a bank account. On average, the unbanked spend about 5 percent of their net income on fees for alternative financial services. They may find it difficult to save money easily or automatically, can be at risk of crime without a safe place to deposit their money, and may find it harder to reach goals like reducing debt or improving credit scores.

That’s where Chemung’s BankOn account can help. It’s meant to make banking accessible to all people, Heffner says. “It gives them a chance to restart, to reboot, and to do it in a safe way.”

For Chemung Canal Trust, it’s also an opportunity for the bank to better serve the communities in which it does business. “We’ve been really focused here at the bank on how we can help, environmentally and socially, in the communities we serve,” Heffner notes.

Currently, Chemung Canal Trust offers the BankOn checking at all branches, and Heffner says the bank hopes to soon offer it online as well. 

Chemung Canal Trust is working with area nonprofits to help spread the word about the account. “We’re always happy to go in and talk to people,” Heffner says. Feedback on the new account has been positive so far, he adds.

Headquartered in Elmira, the bank’s parent company is Chemung Financial Corp. (NASDAQ: CHMG), a $2.5 billion financial services holding company. Chemung Canal Trust has 31 branches across New York and in northern Pennsylvania. Chemung Financial also operates CFS Group, a financial-services subsidiary, and the Chemung Risk Management, Inc. insurance company.