California will be the first state in the nation to launch an effort to help working Californians without bank accounts open starter accounts, Governor Arnold Schwarzenegger announced Thursday.

The announcement was made in an opinion piece co-authored with President Clinton and published in today’s Wall Street Journal. The new initiative, called “Bank on California,” will help more low- and middle-income Californians establish savings, build a credit history, gain access to lower-cost sources of credit and invest for the future, the governor's office in a release.

“Through ‘Bank on California’ we will help working families save money by accessing basic financial services others may take for granted – putting them in the financial mainstream. This simple, innovative idea won’t cost taxpayers a dime, helps working families get ahead and grows our economy at the same time,” said Gov. Schwarzenegger.

The governor said Americans each year spend $8 billion for basic financial services through alternative financial institutions such as check cashing outlets, payday lenders and pawnshops, according to a new Brookings Institution report. He said it translates into $40,000 over the course of a career for the average full-time, worker. In addition, families without bank accounts may not have a safe place to keep their money and can become a magnet for crime.

“Bank on California” is intended as a collaborative voluntary initiative with the help of financial institutions, city mayors, federal bank regulatory agencies, and community groups.

According to the governor, the initiative will:

-- Increase the supply of starter accounts that work for Californians without bank accounts by developing baseline product criteria for accounts to be offered by all participating financial institutions.

-- Educate Californians without bank accounts about the benefits of account ownership and encourage them to open accounts.

-- Form diverse coalitions of financial institutions, regulators, city mayors and nonprofits in key areas statewide to market the accounts to Californians without bank accounts.

-- Build the money management skills of California children and adults.