What Happened?
The city of Oakland has released new city government ID cards with debit card functionality to help low-income residents access banking and municipal services more readily. City officials aim to increase economic activity in Oakland while encouraging residents to move away from a cash-only financing.
The Goal
The New York University Wagner School of Public Service and the Center for an Urban Future featured the new ID card initiative in report highlighting successful innovations nationwide. Oakland’s Municipal ID card program is a government-backed program that builds off standard identification cards by offering a debit card feature. In adding this functionality, Oakland officials hope to encourage low-income residents to participate in formal banking practices, increase savings and establish financial securities to play a more consistent role in the local economy. The ID card is also designed to ward off predatory financial practices from victimizing certain demographics.
According to the report, underbanked residents typically fail to engage in smart money management, opt for informal or illegal banking practices, and miss out on certain services or opportunities in the community that do not accept cash transactions. Lenders and card vendors that charge high interest rates and fees to less financially-savvy customers tend to target underbanked residents.
To address these concerns, the ID program offers fair interest rates, low fees, a streamlined application process and ample information to answer any questions the public may have. The cards, which cost between $10-$15, act as a government form of identification first with the added debit card feature as an introduction into formal banking services.
How It Works
The Oakland Municipal ID card allows users to:
-Present ID to authorities and government agencies
-Purchase products or services online, over the phone or in person
-Deposit checks directly into a personal account
-Add or withdrawal funds from many ATMs throughout Oakland
-Manage account information online
Similar to other government IDs, the card requires users to present proof of identity and residency to apply. The government has also created a fee calculator to help users keep track of their finances from a centralized location.
Pre-Paid Assistance
The Alberta Government is also releasing pre-loaded debit cards for all families recently evacuated from the area due to recent floods. Adults will have access to debit cards with $1,250 in government assistance, while children have access to $500 on the cards. While working with the Red Cross, the government is distributing the prepaid cards in various public locations in Calgary and Canmore, where many evacuees have sought refuge.
To qualify, residents must have received a formal evacuation order and been displaced from their homes for at least a week. In addition, the prepaid cards require evacuees to present a photo ID or proof of residency.
The debit cards can be used for internet purchases, cash withdrawals or standard transactions in-person. The Alberta Government is using $1 billion in immediate support for flood assistance payments to support the ID cards.
Financial Experimentation
Gov1 has tracked different initiatives municipalities are launching to improve pension efficiency as well as strengthen government savings.