Thousands of Twin Citians are without a banking account. For them, just to use and save the money they earn can be an expensive hassle.

St. Paul nonprofit Prepare + Prosper will launch a bundle of products on Tuesday for low-income, financially underserved individuals to build their credit and savings and avoid the high-cost fees and interest that services like check cashiers and payday loan providers charge.

The three-part FAIR (Financial Access in Reach) financial solution, with partner Guaranty Bank, includes a checking and savings account with no overdraft fees and minimum balance requirements as well as a credit-building loan that a customer will pay toward each month.

“It’s really designed to close the financial inclusion gap,” said Tracy Fischman, executive director of Prepare + Prosper. “We know that so many people spend so much money just accessing and trying to use their own money.”

The FAIR suite at first will be offered at Prepare + Prosper, but eventually will be offered at select employers, faith-based organizations and nonprofits. Customers can also do a lot of their banking online, so they won’t have to step foot in the bank to participate.

“Our mission at Guaranty is to help our hardworking families,” said Doug Levy, Guaranty’s president and chief executive. “We didn’t have to create something new to offer to Prepare + Prosper clientele because we were already offering these products to our own customers.”

Research from the FDIC and Prepare + Prosper have shown that many people don’t use banks because they don’t trust them, want to avoid fees or have privacy concerns.

“Many of these folks are already working with other agencies and organizations. … They have an established relationship of trust with them, and banks don’t necessarily always fall into that same bucket,” said Molly Thiel, executive vice president of retail banking at Guaranty. “We’re looking for partners to have established relationships with folks that are already built on trust.”

In the Twin Cities, there are more than 250,000 financially underserved households, according to 2015 FDIC data.

In the most recent data broken down by race, from the year 2013, about one-half of black and Latino households were financially underserved compared with 12 percent of white households.

Those who do not have a bank account often rely on sources that charge high fees for money orders and other financial transactions, or pawnshops.

“The purpose of the initiative is really about the future of the community and state,” said Kevin Walker, president and chief executive the Northwest Area Foundation. “We can’t be the Minnesota we want to be if such large portions of the population are underserved by the financial system.”

The foundation, whose mission is to reduce poverty and help the region achieve sustainable prosperity, brought together Twin Cities leaders in 2013 to discuss ways to improve the financial health of the underserved.

“It’s really hard to build financial stability if you don’t have a bank account or a way to build credit,” Walker said. “It’s best for people if they can get in relationships with financial institutions. That’s the promise of the FAIR initiative.”

Prepare + Prosper, which provides free tax assistance, has worked on the development of the FAIR program for the last three years by researching and then starting a bidding process in which it chose Guaranty Bank, Fischman said.

“This is really an opportunity for people who may have not been able to fully participate in the traditional bank,” she said.

Initial participants will be selected from existing Prepare + Prosper customers and those who participated in community listening sessions.

More organizations will be selected to start providing the bundle in the summer of 2017, with a full rollout in 2018.

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