Sharon Thompkins uses payday loan companies to cash her checks, each time paying a fee based on the amount of the check.

If she had a checking account, Thompkins would pay no check-cashing fees. But like thousands of other Hoosiers, Thompkins is one of the “unbanked” — people without a bank account.

Many had accounts but lost them because they have had excessive overdrafts or below-minimum balances. Some are immigrants, and others are afraid of banks.

Whatever the reason, the unbanked can pay hundreds of dollars in fees for services banks typically offer their customers at no cost, such as check cashing or paying bills by check instead of by money order.

On Thursday, Indianapolis Mayor Greg Ballard and his wife, Winnie, unveiled a private-public partnership called “Bank on Indy” to reach out to the estimated 79,000 unbanked residents of Marion County and allow them to open a free or low-cost account.

“Seventy-nine thousand is a big number. It’s too big,” the mayor said at a news conference at the City-County Building. “We can do better than that.”

Besides eliminating check-cashing fees — and reducing the need to use costly money orders — having an account will help people save and establish or rebuild credit, protect their money from theft and natural disaster and monitor their spending, the Ballards said.

Twelve financial institutions that do business in Indianapolis said Thursday they have agreed to relax their standards to allow more Marion County residents the ability to open free or low-cost bank accounts, and a statewide Bank on Indiana campaign will be launched later this month. State Treasurer Richard Mourdock said the state supports the Bank on Indy effort and that financial literacy is the key to overall literacy.

Bank on Indy is based on a similar program in San Francisco, where 31,000 accounts were opened by first-time users. Houston also has a banking program for people who otherwise would not have an account.

“Many people began their adult lives with little or no introduction to banking. Others have had difficulty with financial institutions in the past for reasons like bouncing too many checks.

“Second chances seem hard to come by in the financial world, but second chances are well worth the investment,” Winnie Ballard said in a news release.

Some of the second-chance programs offered by banks have required participants to take financial literacy courses. Others charge a monthly fee for the first 12 months. The requirements for valid identification can vary, but they are typically less stringent.

Beth Copeland, with M&I Bank, said participating banks have worked to establish uniform standards in Marion County, and a training video is being shared among tellers to ensure the criteria are the same for everyone.

Each bank will counsel potential new customers and even forgive account-holders who have bounced checks in the past.

“We want to provide a means to (let Indy residents) keep more of their hard-earned dollars,” Winnie Ballard said.

How much will they save?

Mike Newbold, president of Huntington Bank, said a worker earning $30,000 annually would pay up to $15 per year for a bank account, depending on the type of banking product he chooses or qualifies for, and depending upon the amount of money he has to deposit.

In contrast, a payday loan branch would tack on a fee of $8 to $15 per week or per paycheck cashed.

Dionne Leslie, chief executive director of Christamore House, a Westside social services agency, said she likes the idea. Allowing people to have bank accounts will help them learn how to live on a budget and become more fiscally fit. Her group has worked with families that have had a history of bouncing checks.

“Many are uninformed about banks. Some don’t trust banks. Others have failed” at getting an account, Leslie said. “This is a second chance for some people.”

Thompkins said she heard banking horror stories from her grandmother, who grew up in the Great Depression.

She said she soon will receive a settlement check and will need a bank account.

“Everybody’s due a chance,” said Thompkins, who is in her 50s and out of work.

Sakitumi Discount Liquors, 2802 Lafayette Road, does a brisk business by cashing paychecks for its customers — charging a fee of about $5 on a $500 check.

“Banks are good, but I don’t too much trust banks,” said Terrence Becks, Sakitumi’s night manager. “Even though you still might be able to cash a check, there’s still going to be a charge in the end.”

Becks, 26, said the banks typically charge a maintenance fee and slap on hefty penalties when a customer bounces a check.

“Banks ain’t free,” he said.

Call Star reporter Tom Spalding at (317) 444-6202.