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Three Ways to Tackle Financial Security

By Sally Durdan, Guest Contributor on 09/19/2014 @ 02:00 PM

Tags: ALC 2014

Today, too many people around the world lack the tools and resources to manage their own basic financial needs. They cannot weather unexpected emergencies or plan for their financial futures. Instead they rely on costly non-bank financial services, such as payday loans or check chasing outlets to make ends meet. This has led to consumers spending billions of dollars in fees and interest each year.

This can have ramifications for our entire economy, from local communities to countries across the globe. When consumers struggle to save money for emergencies or lack credit scores or an established credit history, it is difficult for them to gain approvals for loans and, in some cases, to find employment. A lack of reliable and affordable services limits their ability to build assets and pursue greater life opportunities, such as higher education, small business growth or homeownership.

Without question, this is a global problem. But it is solvable. This week, as a leading sponsor of CFED’s Asset Learning Conference, JPMorgan Chase is proud to be working alongside some of the best minds in asset building to tackle this problem head on. The new ideas, models and connections that are being made at the conference are sure to advance the field in the years to come.

JPMorgan Chase has always been committed to helping our customers manage their daily financial lives and achieve long term goals. It is part of our role as a financial institution, to provide and develop reliable, easy-to-use products and services.

At the conference, JPMorgan Chase announced its newest effort to help consumers achieve financial security. Over the next two years, JPMorgan Chase is committing $35 million to help individuals and families achieve financial security and improve economic opportunities. The investment will provide grants to national and regional organizations dedicated to helping people increase savings, improve credit and build assets.

Working with our partners, our approach will tackle the challenge of financial security in three ways:

  • Innovate by investing in the development of affordable, easy-to-use and technology-driven consumer products and services designed to meet consumer needs.
  • Expand the availability of these innovative products and services around the world.
  • Inform community partners and providers by sharing best practices to enhance financial capability efforts.

There are two outstanding examples of why we believe this approach can work.

First, the Financial Solutions Lab. Earlier this year, JPMorgan Chase and the Center for Financial Services Innovation announced an additional five-year, $30 million program to identify, test and scale innovative financial products and services for consumers that traditionally turn to costly services like payday loans or check cashing outlets for assistance.

Over the course of the next five years, the Financial Solutions Lab will host a series of competitions for social entrepreneurs to identify products and services designed to help consumers improve their financial health. Our grantees will also provide helpful insights on the needs of underserved consumers and effective models that can help guide the Lab.

Second, is our partnership with CFED. Last year, JPMorgan Chase provided a grant to CFED’s Technical Assistance Fund to survey its Asset & Opportunity Network. The goal was to better understand the network’s needs and provide individual technical assistance to improve the efficiency and effectiveness of their financial capability services.

To accelerate their efforts, today, JPMorgan Chase is providing them with a $1.75 million grant over two years to create the Platforms for Prosperity Fund. This new initiative will support the ability for nonprofits in CFED’s network to integrate financial capability strategies into social service programs, such as workforce training, affordable housing and health care programs.

These are just two examples of the great work so many organizations are performing to innovate, expand and inform worldwide efforts to improve financial security. The inspiring, creative individuals at this year’s CFED Conference are on the leading edge of helping consumers save smarter, build more assets, and establish better credit. JPMorgan Chase could not be more pleased to be working side-by-side with them to tackle these challenges.

For more information visit www.jpmorganchase.com/financialcapability.

Sally Durdan is Executive Vice President and Head of Strategy, Chase Consumer & Community Banking.

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2014 Assets Learning Conference: Closing Plenary Live Blog

By Sean Luechtefeld on 09/19/2014 @ 12:30 PM

Tags: ALC 2014

Welcome to the 2014 Assets Learning Conference!

To follow along with our live blog, simply keep this tab open in your browser and use your browser's refresh button to see the latest updates.


1:45 pm: WOW! What a week! Thank you all for being the most engaged group of 1,200 I've had the pleasure of connecting with. Travel home safely, and we'll see you back here in 2016!

1:43 pm: In the words of Gloria Steinem, "How do we move forward? We need to worry less about doing what's most important and more about doing whatever we can."

1:39 pm: Friedman: "We must turn the half-trillion we spend on fighting inequality into an investment in the productive capacity every man, woman and child in the country."

1:32 pm: Okay, so maybe I'm partial, but I think Bob is at his best - as a speaker and a spokesperson - when he talks about our moral imperative to build economic security for the families whose power to produce wealth has been suppressed.

1:28 pm: Brooks: "I believe in assets because I believe in Bob."

1:25 pm: This is your network. YOU own it.

1:23 pm: There should be a young asset-building professionals network for the field. Right?! So many young leaders in this room.

1:21 pm: It's not lost on us that every person in this room is an activist. We may not always think of it that way, but the jobs we get paid to do make us all activists.

1:17 pm: DANG! I keep missing folks' names. Anyhow, one commenter hit the nail on the proverbial head. So many of the people delivering the social services clients need are also eligible for those services.

1:12 pm: Could we ask for a better advocate than Deborah Wilds?! And someone get Karen and Shinada a job!

1:07 pm: To the lady who asked if the A&O Network can come to Missouri (sorry I missed your name): DO NOT feel embarrassed!

1:02 pm: Open mic time! For the next 15 minutes, you get to share your own ideas for how the Network should move forward over the next year or so.

1:00 pm: "What you get out of [partnership] is in direct proportion to what you put into it."

12:56 pm:
At the end of the day, so many of our struggles are shared. The racial justice and the economic justice movements both arise out of the need for equality.

12:54 pm: Such kind words from Dedrick Muhammad of the NAACP about Gloria. We hope she feels better soon!

12:52 pm: The theme of this Plenary seems to be partnership. Between the work of the Network, the commitment of JPMorgan Chase and the commitment to our work from NAACP.

12:44 pm:Our Hill Visits are an amazing opportunity to make moves when it comes to federal policy. But, Brent Kakesako's remarks remind us that there is so much more that can happen when we take our messages to state and local elected officials.

12:37 pm: I think another big difference between where we are now and where we were two years ago is that we now have so many more leaders who can carry the asset-building banner.

12:30 pm: Jennifer Brooks, Director of the Assets & Opportunity Network, will speak to the accomplishments of the Network in its two years of existence. For starters, our field is so much more organized than ever before, thanks to the leaders in the Network. It's their commitment that makes it all work, and we cannot even believe what those leaders have accomplished.

12:27 pm: A $35 million investment in our field is almost unimaginable. CFED is so grateful for JPMorgan Chase's support.

12:23 pm: I'm loving that now, even more so than two years ago when we last met, financial institution leaders are speaking "our" language. They get our issues in such a meaningful way, that we no longer have to educate them about the needs of LMI communities, but rather that we get to look to them as thought partners in this work.

12:19 pm: JPMorgan Chase is the initial investor in this bold new initiative. Sally Durdan will take the stage in just a moment to speak to JPMorgan Chase's commitment to asset building.

12:16 am: Last one is the best one. So thrilled that all of you have stayed with us for this Closing Plenary. Andrea is introducing a significant and very special new partnership: the Platforms for Prosperity Fund. It is no hyperbole to say that this will be as game-changer for the field.

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2014 Assets Learning Conference: Friday Breakfast Plenary Live Blog

By Sean Luechtefeld on 09/19/2014 @ 08:30 AM

Tags: ALC 2014

Welcome to the 2014 Assets Learning Conference!

To follow along with our live blog, simply keep this tab open in your browser and use your browser's refresh button to see the latest updates.


10:09 am: Your task (dictated by Bob Friedman, so you have to do it) is to perform an everyday rebellion. Then, share it with us this afternoon during our open mic. We're so sad Gloria can't join us today, and we wish her a quick recovery.

10:06 am: Deborah Wilds is 100% right: these savers are so rich in so many ways. Keep up the amazing and inspiring work!

10:05 am: I LOVE Gerina's explanation of why "the poor" is a terrible term. It does separate us, and being poor is much less abiut money and much more about spirit.

9:53 am:
I love how committed these women are to building better financial futures, not only for themselves, but also for their families. They seem so generous with what they have, even when it hasn't been a lot.

9:46 am:
These savers are really inspirational. We heard earlier about how scarcity makes it so much more difficult to save, but these women have made it work, despite not having a ton of bandwidth.

9:39 am: I had never thought of it, but IDAs totally sound like a scam. Have any IDA programs actually experienced problems with folks being skeptical? Also, these speakers are making me LOL, literally.

9:36 am: I'm pretty sure that the savers on stage have a combined total of 11 Master's degrees. I lost count, though.

9:30 am:
It's possible that "Bandwidth Liberator" will be trending on Twitter soon!

9:23 am: Apparently we're not the only ones fascinated. This plenary session has #ALC2014 trending 6th in the nation!

9:17 am: The ALC Team working behind the scenes is literally sitting back here saying "Hmmm...I never knew that. That's crazy!" in response to so much of what Professor Shafir is saying!

Don't forget: You can use the comments below to share your thoughts on this morning's speaker's presentations.

9:09 am: In case you didn't know, Scarcity was in your Conference bag. I haven't gotten the chance to read it yet, but am really looking forward to doing so now that Professor Shafir has introduced me to this concept of bandwidth. So fascinating!

9:03 am: What I can't help but think about as I listen to Professor Shafir is how early in life this decision fatigue happens. I imagine that, even at a very young age, these findings would be true. Thus, the longer we're fatigued, the less capacity we have to make smart financial decisions.

8:56 am: Professor Shafir's comparison of financial scarcity to driving while texting or remembering numbers while eating really drive this point home. The more we have to make decisions about money, the fewer mental resources we have to expend.

8:53 am: Bank of America has made much of CFED's integrated service delivery work possible. To learn more about this work, click here

8:49 am: To think that Bank of America was born of the same era as the War on Poverty is fascinating. Kerry's reflection on the successes and failures of the War on Poverty comes with a unique context.

8:47 am: Kerry Sullivan has truly taken the Bank of America Charitable Foundation - and the philanthropic community - to the next level. So excited to have her speak this morning!

8:42 am:
The last day of the ALC is always bittersweet. We desperately want to sleep, but we don't want you to leave!

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Expand Economic Opportunity by Turning Upside-Down Tax Programs Right-Side Up

By Ezra Levin on 09/18/2014 @ 02:00 PM

Tags: ALC 2014, Federal Policy

In Andrea’s State of the Field address yesterday, she announced the release of CFED’s new report on federal asset-building policy: From Upside Down to Right-Side Up. This comprehensive analysis takes a hard look at the $540 billion in spending on federal tax programs that support asset building through homeownership, retirement savings, liquid savings and higher education.

As you heard yesterday, this federal spending is strikingly upside down. The federal government spends billions of dollars each year to help Americans build assets, but this spending isn’t helping most low- and moderate-income households.

The good news is that together, we have the power to make a change. If you are one of the 500+ members of the Assets & Opportunity Network taking part in Capitol Hill Visits today, you’re on the leading edge of a bold new campaign to turn these tax programs right-side up. You and others will meet with over 175 offices in the Senate and House of Representatives to have conversations about asset-building programs throughout the country, and you’re bringing the message that we need to invest more in helping low- and moderate-income families build assets.

For policymakers interested in reform, $540 billion is on the table, ready to be redeployed in ways that will expand financial security and economic opportunity for millions of Americans. With your help, we can make sure these reforms are part of the conversation.

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Recapping Wednesday's Opening Plenary

By Jessica Shappley, Guest Contributor on 09/18/2014 @ 11:00 AM

Tags: ALC 2014

The 2014 Assets Learning Conference opened with a plenary on the state of the asset-building field. Liquid asset poverty remains a major issue in the field as nearly half of U.S. households are in a state of persistent financial insecurity. Four key leaders across different sectors reflected on successes and challenges associated with wealth and income inequality and how to create pathways to financial security. One of these leaders is Bill Bynum, CEO of HOPE Enterprise Corporation.

HOPE Enterprise Corporation is a leading Community Development Financial Institution (CDFI) that serves financially underserved communities across the Mid South. In his remarks, Bynum referred to the financial climate in the Mississippi Delta as “ground zero” and spoke on the particular financial vulnerability that Mississippians face. For instance, over 60 percent of Mississippians are in liquid assets poverty and nearly 40 percent of HOPE’s members were unbanked before becoming a member.

He noted the important role that the CDFI sector can have in creating pathways to financial security. Today, there are approximately 800 CDFIs that work across the financial sector, and Bynum believes that CDFIs can be fundamental in developing smart policy solutions around key asset-building issues.

Bynum concluded his remarks noting that HOPE’s work and the work being done by many in the asset-building field is an extension of the Civil Rights movement. He remarked that “economic justice is the unfinished business of the Civil Right movement,” as he reflected on the 50th anniversaries of the War on Poverty and Freedom Summer.

To create pathways to financial security, Bynum believes that we collectively need practice, policy, and organizing to make sure voices are heard as we look for ways to move forward in the asset-building field.

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2014 Assets Learning Conference: Thursday Breakfast Plenary Live Blog

By Sean Luechtefeld on 09/18/2014 @ 08:30 AM

Tags: ALC 2014

Welcome to the 2014 Assets Learning Conference!

To follow along with our live blog, simply keep this tab open in your browser and use your browser's refresh button to see the latest updates.


10:00 am: This afternoon, we've got a ton of different activities planned. Have a great Day 2 of the ALC!

Reminder:
Click on the ALC 2014 tag on the right-hand sidebar of this page to see all of the #ALC2014 blog posts, including reflections from attendees, key updates and more.

9:53 am:
Meeks: "Folks in this field have got to raise hell!" Write letters to the White House and put pressure on one another to build these coalitions.

9:49 am: As a communications person in the asset-building field, these women are speaking my language. The messaging is key - on the Hill, but also in agency offices and on the ground. We need to be able to speak about asset building's ROI.

9:47 am:
Elsie Meeks does a great job speaking to the challenges in rural communities. As Lisa says, we haven't all had the opportunity to work in rural communities.

9:38 am: What would surprise us about the Department of Education? Former Undersecretary of Education (and CFED Board Member) Martha Kanter tells the story of her introduction to the structure of funding for higher education.

9:33 am: Lisa Mensah is a total rockstar! What a great moderator for this panel.

9:28 am:
Austin's remarks - though they point to some of the most chilling statistics on financial insecurity that are available - give me hope. So much is happening in Washington, even across the aisle, at a time when lawmakers are seens as being stuck in stalemate. The fact that the Administration is getting as much done as it is suggests that the future is brighter than we often want to believe.

9:23 am:
Austin: "Financial education is critical to closing the wealth gap and building ladders to opportunity."

9:20 am: Among Latino households, wealth dropped by two-thirds. So much of this problem is tied up in housing, pointing to the need for federal housing reform.

9:16 am: What strikes me about this plenary is the way that it reframes popular thinking around the role of government in our movement. So often, people think of social change as working around or in spite of government efforts, rather than alongside of those efforts. But, Roy Austin's remarks prove the ways that the federal administration can work with everyone in this room to build ladders of opportunity.

9:11 am: Who knew an economist think-tank policy wonk guy could be so funny?! 

9:06 am (via @STLtreasurer on Twitter): "An unexpected expense of just $400 would cause most families to either borrow for it or not pay it at all. - Janet Yellen #ALC2014"

9:03 am: What an incredible set of experiences Ray Boshara has had! From the signing of the Assets for Independence Act to the development of New America's Asset-Building Program (AND six years at CFED!), he really has done it all.

Taking Notes?
Don't forget to used the shared Google Drive for notes to give others a sense of the sessions you've attended. Several of yesterday's sessions have notes from attendees, and there will be many more today!

8:57 am:
So excited for Chair Yellen's remarks. We wish she could have been here because our issues are so central to the way she thinks about her work. But, we're grateful she was able to share her thoughts digitally.

8:47 am:
I was really hoping Andrea wouldn't spill the beans on the wardrobe coordination. Cat's out of the bag now!

8:43 am: MAN! I wish I were Shellie Couch! She just won $100 for owning the Exhibitor Crawl game!

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2014 Assets Learning Conference: Wednesday Lunch Plenary Live Blog

By Sean Luechtefeld on 09/17/2014 @ 12:30 PM

Tags: ALC 2014

Welcome to the 2014 Assets Learning Conference!

To follow along with our live blog, simply keep this tab open in your browser and use your browser's refresh button to see the latest updates.


1:33 pm: Thanks for joining us for this Plenary Session, and enjoy your afternoon sessions. We'll see you back here on the blog tomorrow morning!

1:30 pm: What do you think so far? Use the ALC Mobile App to share your feedback on this and other sessions. Just click on the session page in the Mobile App and then scroll to the bottom for the evaluation questions.

1:25 pm:
One of the sessions that will relate to these topics and more is "Driving Toward Impact," which will take place at 2 pm in Salon 15 (on Level M2). You'll also want to check out "Financial Education 2.0: What's the Way Forward," in the Gallaudet Room on Level M1.

1:18 pm:
 So many good one-liners! "We've gotta stop pretending that it's a flyer and a brochure and a website and we're done." -Hillebrand

1:15 pm: AMEN! Rademacher: "The system makes it so that some get ahead and are able to succeed, but it also makes it to that others are set up to fail."

1:11 pm (via @AmericaSaves on Twitter): "Despite the taboo in the US, people are really willing to share the ins-and-outs of their financial lives. @cfed #ALC2014"

1:09 pm: Ida's point is one that has always baffled me. Why do we get so shy about talking about our finances? Taking money is so taboo, but honest (and sometimes harsh) conversations that exist freely are key. The good news is that, when it comes to the USFD, people were willing to share candidly, and that generated a wealth of qualitative insights.

1:06 pm:
Unsurprisingly, Brandee makes an astute observation: you're probably not learning anything here you don't already intuitively know. You can tell the stories of the folks in your communities; we just need the evidence to couple with those stories.

1:01 pm:
Rachel Schneider, SVP at CFSI, introduces us to the Garzas. What happens when families like the Garzas can't keep their expenses down, despite their best and most creative efforts? Hint: the end result isn't saving.

12:57 pm:
Jonathan Morduch from NYU is explaining the U.S. Financial Diaries (USFD) project. In short, they followed 200+ families over a longer-term timeframe to grasp the challenges facing these families that would otherwise be hard to see. Ida mentioned that in a decade, we'll see these as stakes. I might go a step further and argue that the USFD project will be a game-changer. Very exciting to hear about it!

Don't forget!
You should share notes using the shared Google Drive here.

12:53 pm: One "promising implication" (not a finding, but a promising implication) is that the ability to make good financial decisions isn't just about the ability to do research and think critically. It's also about the ability to focus and persevere, which isn't always easy, especially when you're financially strained. This one hits close to home. Many who I know - myself included - feel that financial strain even despite having the knowledge needed to make good financial decisions. I'm so grateful that we're finally pressing past the belief that if people know what decisions are best, that they'll make them.

12:49 pm: Hillebrand raises a series of great questions. What's a good life, financially speaking? What's the right combination of skills and services that contribute to financial well-being. It's stunning that we don't know this yet, but promising that the CFPB is fueling the effort to figure it out. One key is the ability to absorb a financial shock.

12:44 pm: As Gail Hillebrand takes the stage, I just want to say that it blows my mind to think that just a few years ago, the Consumer Financial Protection Bureau wasn't a thing. The ways the CFPB has led the field when it comes to supporting research that drives initiatives that bolster financial security are incredible.

12:40 pm:
Rademacher: "We're going to look back a decade from now and see these two projects - the U.S. Financial Diaries project and the Financial Well-Being Metrics project - as essential stakes for the field."

12:37 pm:
KERA's work this fall will culminate in a radio miniseries, called The Cost of Living Poor, which will help advocates further make the case.

12:30 pm:
This video from KERA Public Media in Dallas does a great job of capturing what it's like to live paycheck-to-paycheck - literally one crisis away. Videos like these are critical for our field's ability to tell the story. It's easy to think in terms of numbers, but putting a face on asset poverty will do much to move the dial when it comes to public policy.

12:26 pm:
Ida Rademacher: These plenaries will be a little bit like going to church. Get ready for the call and response!

12:22 pm: Kim imagines this afternoon's programming in pathways. I like to think of it as the choose-your-own-adventure version of the ALC. Choose from Concurrent Sessions and Roundtables, OR a capacity-building intensive. Then, join us for the D.C. Street Fair-themed reception!

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2014 Assets Learning Conference: Opening Plenary Live Blog

By Sean Luechtefeld on 09/17/2014 @ 08:30 AM

Tags: ALC 2014

Welcome to the 2014 Assets Learning Conference!

To follow along with our live blog, simply keep this tab open in your browser and use your browser's refresh button to see the latest updates.


10:05 am: I'm signing off to get prepare for the 18 Concurrent Sessions we're offering in the 10:15 block (come say 'Hi!' on Level M3)! Thanks for joining us for this plenary, and don't forget to come back here for the Lunch Plenary live blog at noon.

10:03 am: As a field and as a movement, the whole truly is greater than the sum of its parts. It is your passion and your ingenuity that, when combined, will make inequality and insecurity a thing of the past."

9:59 am: Don't forget to use the Google Drive to share your notes at http://bit.ly/alc14notes.

9:54 am:
Andrea asks an intriguing question: in 2016, what do you hope we'll all be talking about that we're not currently discussing. Bob's answer: tax reform. I swear to you we did not pay him to give that answer!

9:52 am:
First asset building made the New York Times, then the ALC trended on Twitter, and now...Marketplace! What a great way to get this party started! 

9:44 am:
 I'm loving Professor Sherraden's analogies here about our imagination problem. At one point, we couldn't imagine having water in our homes without carrying buckets in from the well, which was often unsafe. Now, we take it for granted. Likewise, right now, we can't imagine a world without inequality, but if we imagine it, we'll one day be able to take it for granted.

9:37 am: What I'm loving about this plenary panel is that each speaker brings a unique perspective, and yet I can relate to each one of these perspectives. It really does reflect what we had in mind in designing this Conference: that it takes all of us, from every corner of the field and all walks of life, to make the work we do work for all.

9:33 am:
Lisa's point is well-stated: "Race still matters a lot. The Asian-American community does not transcend race, because there is no such thing as a post-racial society." We agree, and the notion that there's a "perfect racial minority" also assumes a problem racial minority. This is an assumption we need to seriously question.

9:30 am:
Lisa Hasegawa: "I'm in a room full of asset-building rock stars." YES!

9:27 am:
This is HUGE news from Citi: new product makes it harder for consumers (low-income and otherwise) to overdraft. Just another way in which data from our field and innovations from the private sector come together to make a difference.

9:24 am:
What unites us is that we have a shared experience of vulnerability. 

9:22 am:
Citi's Bob Annibale hits the name on the head. Unemployment at 6.2% instead of 10% is good, yes. But until we disaggregate data, we really have no idea how people are faring. We need this data to tell the stories, and we need the stories to command the attention of a nation.

9:16 am:
Bill Bynum, CEO of HOPE Enterprise Corporation: The Deep South has the highest asset poverty, unbanked and underbanked households in America. But, there's hope. We're making huge strides.

9:13 am:
Sorry we've been a little slow to update. It might be because #ALC2014 is TRENDING! RT @TrendinaliaUS: "56,419 people could have seen #ALC2014 since its 1st mention until it became a Trending Topic. #trndnl"

9:08 am:
Levere: "Consider this Conference the place where your torch was lit; the more torches there are, the brighter the future of our field and the futures of the families we serve."

9:00 am:
Need proof that folks are actually listening to what our field has to say? Check out this morning's New York Times article on liquid asset poverty. Now, more than ever before, the quest to build financial security for the half of us who live in liquid asset poverty has the attention it deserves.

8:57 am:
What have we accomplished since we last met two years ago? Profound insights into the financial realities of low-income people, books like Scarcity, new and creative partnerships with the private sector, the use of technology to meet the needs of the most vulnerable, community-based solutions to bolster entrepreneurship, social ventures that help homeowners and college savers, scalable children's savings programs at the state and local levels, and more. How's that for two years?!

8:53 am (via @Shelterforce on Twitter):
"Levere: Among developed nations, U.S. is third from the bottom in economic mobility. Good news is more attention on inequality. #ALC2014"

8:49 am: More evidence that the problem of insecurity is spiraling out of control: Liquid asset poverty varies from a low of 11% in Irvine, CA, to a high of 75% in Newark, NJ. More from the Local Data Center here.

Don't forget!
Use the comments section below to share your thoughts and reactions to Andrea's State of the Field address.

8:44 am:
CFED President Andrea Levere: "The financial and economic realities of our time can be defined in three words: inequality, insecurity and immobility."

8:43 am: Fun fact: this is the largest and most diverse ALC yet! So far, there are 1,189 of you out there, with many more to join us later this afternoon and over the next three days.

8:39 am:
 Things are getting started! Kim Pate, ALC Conference Director and CFED's Chief External Relations Officer, is taking the stage for her NINTH Assets Learning Conference!

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Staff #ALC2014 Picks: Katherine Lucas McKay

By Paul Day on 09/16/2014 @ 01:00 PM

Tags: ALC 2014

The 2014 Assets Learning Conference is only a few days away! We’re excited to share CFED’s ALC Staff Picks, representing different areas of our work and what we’re looking most forward to at the conference. We hope these picks will help you decide where to go and what to see!

Katherine Lucas McKay is CFED's Associate Director for Government Affairs & Senior Policy Analyst

Q: Which sessions are you looking forward to?

A: My session picks:

Wednesday:
Expanding retirement security for all workers
Financial education 2.0: What is the way forward?
Roundtable: Incorporating behavioral insights into financial product design OR Success Factors in Co-op Development

Thursday:
Blurred Lines: The Shifting Reality of Work and Self-employment

Friday:
I’ll be speaking in the session titled Using Alternative Credit Data Reporting to Expand Access to Credit. If I could be in two places at once, I’d also attend Alternative Small-dollar Lending: Connecting Policy and Product Development

Q: What are your most important takeaways from the conference?

A: My takeaways:

  • I’m looking forward to seeing partners and colleagues with whom I work and talk fairly often but haven’t actually seen since the last ALC.
  • ALC Hill visits will be especially exciting this year, as we have a record number of people attending, led by Assets & Opportunity Network Lead Organizations. I’m looking forward to spending an afternoon on Capitol Hill with about 400 ALC attendees, discussing asset-building policies and programs with Congressional staffers.
  • At every ALC I’ve been to so far, I learn about an entirely new subject that is so exciting that I have to find a way to get involved or incorporate it into my team’s work.

Q: For the folks who are traveling to DC, what are some things worth seeing?

A: My DC picks:

  1. The National Building Museum is one of my favorites. Although it’s one of the few that charge entry fees, but they’re pretty cheap. The building, which was originally the home of the Pension Bureau, is unique and beautiful.
  2. Walk (or run) around the Tidal Basin—see some monuments, enjoy great views of DC’s political institutions, and pretend all the trees are full of cherry blossoms.
  3. If you don’t get enough dessert at the conference, walk about a mile from the hotel to Mr. Yogato, which is my very favorite frozen yogurt (it’s the tangy kind).

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Staff #ALC2014 Picks: Kim Pate

By Paul Day on 09/16/2014 @ 09:30 AM

Tags: ALC 2014

The 2014 Assets Learning Conference is only a few days away! We’re excited to share CFED’s ALC Staff Picks, representing different areas of our work and what we’re looking most forward to at the conference. We hope these picks will help you decide where to go and what to see!

Kim Pate is CFED's Chief External Relations Officer

Q: Which sessions are you looking forward to?

A: My session picks:

Wednesday:
Bringing People Closer to Opportunity through Transportation Equity
Developing Successful Partnerships with Native Asset-Building
Programs Native Assets Assessment
Networking Reception/DC Street Fair

Thursday:
Citizenship as an Asset
Capitol Hill Visit Prep Luncheon, Native Nations caucus will have own tables
Capitol Hill Visits, including Native Nations caucus visits
Native opening of ALC Awards program with drum circle and remarks from Tanya Fiddler, Executive Director of Four Bands Community Fund on the state of native assets

Friday:
Community Wealth Building in Native Communities
Entrepreneurship as an Asset in Communities of Color
Closing Plenary with keynote by Gloria Steinem (because it will be so great!)

Q: What are your most important takeaways from the conference?

A: My takeaways:

  • Networking with old and new peers.
  • Some great new ideas to take home.
  • A way to engage in federal policy long-term, starting at the conference and moving forward.

Q: For the folks who are traveling to DC, what are some things worth seeing?

A: My DC picks:

  1. The Mansion at O
  2. The Aquatic Gardens

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Senator Cantwell Leading the Charge for Women-Owned Businesses

By Manny Hidalgo on 09/15/2014 @ 04:00 PM

Tags: Entreprenuership, Federal Policy

Last month we were thrilled to learn that Senator Maria Cantwell (D-WA) introduced legislation to increase federal resources to support women entrepreneurs throughout the country. The “Women’s Small Business Ownership Act of 2014” (S. 2693) would improve access to lending and increase business counseling and training services for women entrepreneurs, and give women-owned businesses the same level of access to federal contracts as other disadvantaged groups. It was crafted on the heels of a report issued by the US Senate Committee on Small Business and Entrepreneurship which is chaired by Senator Cantwell. Released on July 23rd the report is titled, “21st Century Barriers to Women’s Entrepreneurship.” The report starts with compelling data about the powerful impact women-owned businesses are having on the national economy:

In 2009, women-owned businesses had an economic impact of nearly $3 trillion – providing 23 million jobs, or 16% of all U.S. jobs.

The growth of women-owned firms outpaces that of all other firm types. Women-owned businesses added roughly 500,000 jobs between 1997 and 2007, while the rest of privately held firms lost jobs. African American women are starting businesses at a rate six times the national average. Their 2.7 million firms generate $226.8 billion in annual revenue and employ approximately 1.4 million people.

The report also describes the disadvantages women entrepreneurs face:

  • Women-owned businesses receive just 16% of all conventional small business loans, 4.4% of the total dollar value of these loans.
  • The U.S. Government has never met its goal of awarding 5% of federal contracts to women-owned businesses. The closest that federal agencies have come to meeting the contracting goal is 2.47%. If federal agencies met the contracting goal for women-owned businesses, it could increase their total revenues by as much as $4 billion per year.
  • Although Small Business Administration (SBA) funded Women Business Centers (WBCs) provide specialized counseling and training to women business owners nation-wide, the WBC program has not been re-authorized since the 1990s and funding has remained flat since then.
  • Women receive just 7 percent of venture funds – and the percent of female venture capitalists has actually declined from previous years.

The Women’s Small Business Ownership Act offers solutions to many of the problems described in the Senate report, including:

  • Making improvements to the SBA Microloan Program and Intermediary Lending Program to make sure that small businesses have access to credit from as little as $5,000 up to $250,000.
  • Allowing sole-source contracts to be awarded to women-owned small businesses through the WOSB (Women-Owned Small Business) Procurement Program.
  • Increasing funding for WBCs and raising the maximum grant each WBC can receive.

The Women’s Small Business Ownership Act is a sensible law that will help level the playing field for women business owners.  Women-owned businesses have a $3 trillion impact on the national economy, which means that federal investments in women entrepreneurs’ success pay off by strengthening the economy as a whole.  You can learn more about the Women’s Small Business Ownership Act and read the Act and the Small Business Committee’s report online. You can check whether your Senators support the act here.

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Staff #ALC2014 Picks: Doug Ryan

By Paul Day on 09/15/2014 @ 01:00 PM

Tags: ALC 2014

The 2014 Assets Learning Conference is only a few days away! We’re excited to share CFED’s ALC Staff Picks, representing different areas of our work and what we’re looking most forward to at the conference. We hope these picks will help you decide where to go and what to see!

Doug Ryan is CFED's Director of Affordable Housing Initiatives

Q: Which sessions are you looking forward to?

A: My session picks:

Wednesday:
Bringing People Closer to Opportunity through Transportation Equity
Where Health and Housing Intersect
Housing as an Asset-Building Strategy

Thursday:
The Power of Rental Payments for Credit Building

Friday:
Household Economic Well-Being and Mobility

Q: What are your most important takeaways from the conference?

A: My takeaways:

  • Meeting with leaders in the field.
  • Learning about new initiatives.

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Entrepreneurs Getting Tech-Savvy with Mobilize Your Business

By Isaac Roldan on 09/15/2014 @ 10:00 AM

Tags: Entreprenuership

In June, CFED launched an open call for solutions to discover and highlight strategies that address the key financial challenges facing microbusiness owners. We’re thrilled to recognize CAMBA as one of ten stellar submissions for their creative interventions and begin to explore opportunities to further their work. Each idea was evaluated to assess feasibility, viability, perceived propensity for scale, innovativeness and relevance, in terms of its potential to address financial challenges or expand financial capability of microbusiness owners.

You may not see it, but one simple truth is Tawana C.’s bread and butter: Brooklyn hipsters wear fancy underwear. When Tawana opened her business, Miss Sassy Boutique, in Brooklyn, NY, she did so with a good idea, desirable merchandise and a space from which to sell it. But here’s what Tawana didn’t have: the ability to accept credit cards, a formal process to record sales and a full understanding of her target market, which limited her ability to capitalize on the “New Brooklyn” transforming right before her eyes. A few months after opening, Miss Sassy Boutique was in the red. Without a significant change in operations, Tawana’s business was sure to fail.

For its first few months of operation, Miss Sassy Boutique was an unfortunate case in point: Small business owners like Tawana—in New York City and elsewhere—struggle to adopt the technology needed for business growth. This is due to cost, discomfort with technology and, most critically, because they underestimate the value of actionable business data.

A recent report from the Center for an Urban Future found that 80% of small business owners in New York City are not effectively capitalizing on technology.

This was true for Tawana, but it changed when she enrolled in the Mobilize Your Business course from CAMBA Small Business Services. First piloted in 2013, Mobilize Your Business is an easy, low-touch, high-impact course that equips small business owners to use low cost/free mobile technology to increase sales, reduce costs, improve operations and position themselves for bank financing. Tawana enrolled in the free nine-hour course and here’s how we saw the adoption of technology benefit her business almost overnight:

  • Sales Insights: Tawana learned to use a mobile accounting app that captured sales and expense data from her manual entries and linkEd directly to her business bank account. She immediately discovered that she was spending more money than she was making and operating at a loss.
  • Credit Card Processing: Tawana adopted a mobile Point Of Sales app and began accepting credit cards, which immediately increased her customer base and boosted sales.
  • Inventory Management: Tawana realized that increased sales alone cannot ensure profitability. She needed to control costs. Using mobile apps for inventory management, Tawana scaled back on merchandise that was not selling, while ramping up her inventory of top-selling items.

Not long after completing the course, Tawana had put Miss Sassy Boutique in the black and on the path to bankability. And Tawana’s success with Mobilize Your Business is not unique. Over the course’s first year, 70 aspiring and current immigrant entrepreneurs completed the course, with 75% adopting new technologies and 60% adopting credit card processing. Among those who began accepting cards, 80% saw sales rise.

Further, the course equipped these entrepreneurs with tools and data to go beyond the immediate boost: With automated sales tracking, for example, comes a better picture of available capital and the viability of future expansion; and through the use of free social media apps comes customer retention, brand loyalty and a long-term sales pipeline.

Now with its first year in the books, and with a cohort of newly tech-savvy business owners reaping the rewards, Mobilize Your Business can potentially help thousands of entrepreneurs leapfrog the digital divide and achieve profitability, sustainability and growth – we just need help getting the word out to the microbusinesses that help is within reach!

Want to learn more about CAMBA’s plans? Check them out at the Assets Learning Conference in September. They’ll be featured in the Shark Tank Small Business Challenge, a concurrent session from 10:15 to 11:45 AM on Wednesday, September 17, that will highlight a number of innovative approaches to microbusiness owners’ financial challenges and allow audience members to select a favorite.

About the Author

Isaac Roldan is Director of CAMBA Small Business Services. Mr. Roldan is responsible for the day-to-day management and oversight of all SBS programs, including Mobilize Your Business.

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Staff #ALC2014 Picks: Jocelyn Harmon

By Paul Day on 09/15/2014 @ 09:00 AM

Tags: ALC 2014

The 2014 Assets Learning Conference is only a few days away! We’re excited to share CFED’s ALC Staff Picks, representing different areas of our work and what we’re looking most forward to at the conference. We hope these picks will help you decide where to go and what to see!

Jocelyn Harmon is CFED's Chief Philanthropy Officer

Q: Which sessions are you looking forward to?

A: My session picks:

Wednesday:
Crowdfunding and Community Development
Dreaming Bigger: Designing a Large-Scale Children’s Savings Program
Technology as an Asset-Building Platform for Individuals and Entrepreneurs
Working with Community Foundations to Build Assets

Thursday:
Raising Assets for the Asset Building Field: Trends and Opportunities in Philanthropy

Friday:
Entrepreneurship as an Asset in Communities of Color or Community Wealth Building in Native American Communities – Very hard to choose!

Q: What are your most important takeaways from the conference?

A: My takeaways:

  • Networking and meeting with leaders in the field, especially funders.
  • Learn what “sells” in asset building. How do we best message our work/cause/movement to a broader audience?
  • What are some new and creative ways that we are raising money for the field?

Q: For the folks who are traveling to DC, what are some things worth seeing?

A: My DC picks:

  1. MLK, Jr. Memorial!

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Staff #ALC2014 Picks: Kasey Wiedrich

By Paul Day on 09/12/2014 @ 12:00 PM

Tags: ALC 2014

The 2014 Assets Learning Conference is only a few days away! We’re excited to share CFED’s ALC Staff Picks, representing different areas of our work and what we’re looking most forward to at the conference. We hope these picks will help you decide where to go and what to see!

Kasey Wiedrich is CFED's Senior Program Manager in Applied Research

Q: Which sessions are you looking forward to?

A: My session picks:

Wednesday:
Family Assets Count: Data-Driven Decision-Making at the Local Level
Financial Education 2.0: What is the Way Forward?
Roundtable: Rigorous Evaluation of Asset-Building Programs: What Does it Take?

Thursday:
How to Get People to Save

Friday:
Household Economic Well-Being and Mobility

Q: What are your most important takeaways from the conference?

A: My takeaways:

  • Getting re-energized by the enthusiasm of all of the attendees at the conference. Attending the ALC with the smart and dedicated people in the asset building field always reminds me why I chose to do this work.
  • Hearing about the innovative and exciting work happening around the country.

Q: For the folks who are traveling to DC, what are some things worth seeing?

A: My DC picks:

  1. The Portrait Gallery and American Art Museum, great museums close to the hotel.
  2. Go to U Street and eat at Ben’s Chili Bowl (if you look closely, you’ll see a photo of CFED’s Peep diorama of Ben’s on the wall).

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Asset Building News Roundup: September 12, 2014

Posted on 09/12/2014 @ 11:00 AM

Tags: News

Events

Check out these pre-ALC sessions next week hosted by the ABPN and CFPB.

Unfinished Business: Winning the Battle for Economic Opportunity
Tuesday, September 16, 2014, 12:30-5 pm (Reception to follow at 5 pm)

Washington Marriott Marquis, Washington, DC
This half-day event will address how low- and moderate-income individuals, families and communities of color are faring in today’s post-recession economy; the ways in which civil rights, advocacy, community development organizations and financial institutions are working to close the racial wealth gap; and federal policy’s potential to help low-income households save and invest in their long‐term economic security.

Your Money, Your Goals: A Financial Empowerment Toolkit for Social Services Programs (CFPB)
Tuesday, September 16, 2014, 8:30 am–5 pm
CFPB Headquarters, Washington, DC
This free, full-day session (to take place at the CFPB headquarters) will provide you with the tools you need to train case managers, social workers and other staff on ways to integrate financial empowerment into their day-to-day work with clients.

News

In a report released Tuesday, the College Savings Plans Network found that the average college savings or prepaid tuition account known as a "529" plan is now worth about $20,671 — almost double what these accounts were worth during the dog-days of the recession.

An old-fashioned banking product that has fallen on hard times may be making a comeback with school kids. Passbook savings accounts are the centerpiece of a pilot program being launched this fall by the Federal Deposit Insurance Corp., which is hoping to promote financial education and encourage children to save money. Read more here.

Income inequality must have become a mainstream concern because even business leaders worry about it. A newly released survey by the Harvard Business School of its alumni about American competitiveness shows that a “troubling divergence in the American economy” could ultimately sink the country’s prospects.

In this newly released issue brief, The Center for American Progress provides information about programs that provide renters the opportunity to save and build wealth offered through the federal government, a nonprofit organization and a for-profit company. They also provide a review of behavioral economics fundamentals to help inform the conversation about designing effective programs to put renters on a path toward financial security.

The recovery was a good time to be youngish. According to the Federal Reserve’s latest tri-annual survey on American finances, Gen Xers are finally coming of age, at least in economic terms. Slackers no more, their income and wealth have increased since the recession, although the wealthiest reaped much bigger gains and inequality got worse. Read more here.

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Save as you Spend: How an Innovative Approach to Saving Can Help Business Owners Save More Money

By Paul Sorokin on 09/12/2014 @ 09:30 AM

Tags: Entreprenuership

In June, CFED launched an open call for solutions to discover and highlight strategies that address the key financial challenges facing microbusiness owners. We’re thrilled to recognize SavedPlus as one of ten stellar submissions for their creative interventions and begin to explore opportunities to further their work. Each idea was evaluated to assess feasibility, viability, perceived propensity for scale, innovativeness and relevance, in terms of its potential to address financial challenges or expand financial capability of microbusiness owners.

When it comes to savings, the latest statistics show that Americans have a dismal record. According to the Center for Retirement Research at Boston College, 57% of American adults have less than $25,000 in total savings and investments. The difference between the total savings of Americans and the amount they will need when they retire is $6.6 trillion. This means that many Americans will have to continue to work after retirement.

The statistics make one thing very clear: spending, and not saving is the priority for many Americans. For the average person, savings is an afterthought after their spending is done, with little to no funds left to contribute. The problem is not that they do not want to save; it is that they simply do not make enough effort to save. To make matters worse, they are presented with too many distractions wherever they go.

This directly affects business owners – not only do they have to be good savers personally, but they also must compensate for the lack of typical corporate benefits such as 401K plans. For many, there is no simple solution. Small business owner face many conflicting priorities when it comes to money, and along with the unpredictability of monthly income, the task of allocating money for your own saving benefits is often neglected, resulting in many business owners not saving enough money and not contributing money to retirement.

With Americans spending a greater part of their earnings via credit cards, checks and direct debits of their checking accounts, SavedPlus came up with an innovative idea to help average Americans and business owners automatically contribute to their savings and retirement account every time they make a purchase or make a payment. The solution the company offers involves prioritizing savings alongside with spending, so that every qualified spending results in a small contribution to users' savings or retirement account.

The company's app SavedPlus automatically transfers a predetermined percentage of each qualified spending transaction from the user’s checking to the user's destination savings account. With this, users automatically contribute to their savings accounts every time they spend money - without making an effort. Of course, there are checks and balances included where users can set maximum qualifying dollar amount for spending transactions, and minimum checking account balance at which the application performs the savings transfer. The users can choose the savings rate between 5% and 20% according to their need; link to more than one spending account; and switch between the savings destinations whenever they want to. Thus, the app gives them full control over the flow of money and the dollar amount transferred.

The SavedPlus solution offers different benefits to different types of users depending on their needs. For some, it is its ability to minimize spending by automatically contributing funds that would otherwise be spent; for others, it is its ability to automatically deposit additional funds to their retirement accounts; and yet for others it offers an effortless way to save money for their kids' college tuition or simply save up money for various personal goals. Users can even use it to make regular contributions to their favorite charity.

The save-as-you-spend solution is truly unique and groundbreaking in both concept and design. It is the first and so far the only solution that directly addresses some of the difficulties Americans have with saving. Since its launch, it has already become a game changer and is sure to spawn many copycats in the future.

In today's increasingly challenging world, people have many conflicting priorities and they often do not have the time or desire to think about the future and do one of the most important things in their life - to make regular contributions to their savings and retirement accounts. Our users – both personal and business owners appreciate our solution because SavedPlus is an automatic tool that frees up their time for other things, while continuously building up their savings and retirement accounts.

About the Author

Paul Sorokin, the COO and co-founder of SavedPlus, has worked in various industries, always finding ingenious ways to make process and product improvements. He founded and co-founded several technology and internet startups. His endless entrepreneurship, creativity, leadership and vision were the cornerstone and inspiration for creating SavedPlus Inc.

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Financial Coaching Leads to Long-Term Financial Stability

By Alicia Atkinson on 09/11/2014 @ 06:30 PM

Tags: Federal Policy, Integrated Service Delivery, ALC 2014

As families struggle with new financial challenges, we need to provide new, impactful solutions. Financial coaching offers a high impact service to households and increases their long-term financial security. As the Federal government implements current policies and reauthorizes others, we need to think creatively how we can get this vital service to low- and moderate income families across the United States.

Our newest federal policy proposal, “Financial Coaching Leads to Long-Term Financial Stability,” focuses on helping the millions of Americans facing financial insecurity due to circumstances such as loss of housing wealth, long-term unemployment, high levels of debt or poor credit. Financial coaching can help these individuals and families regain their financial footing by helping them learn how to navigate our financial system more successfully and build confidence and habits that lead to financial security.

The fact is, people from every income level benefit from financial advice; but only high-income or high-wealth individuals can easily access financial advisory services. Low- to moderate income families generally cannot afford a financial planner or wealth manager, leading to a gap in financial knowledge, capability and confidence.

Financial coaching fills this gap.

Research has shown that financial coaching is high impact. The combination of financial education, personal and household budgeting, credit counseling and general money management can directly impact employment rates, employment retention, housing and savings.

Financial coaching presents a prime opportunity to help low- to moderate income families improve their financial capability and achieve financial security, but it has little funding support from large-scale federal, state or local programs. Our proposal outlines concrete steps Congress and federal agencies can take in order to support the growth of financial coaching and reach more vulnerable households.

Our recommendations seek to implement quality standards and outcome measures and create sustainable resources for organizations and government agencies that integrate financial coaching into the core services they offer. Our recommendations include:

  • Congress, the DOL and HHS need to adapt federal program outcome measures to encourage the adoption of financial coaching practices.
  • DOL should integrate financial coaching into adult and youth employment programs.
  • Congress and HUD should integrate financial coaching into federal housing programs.

Read our new proposal today and get ready to engage with other practitioners, researchers and advocates on this year’s Financial Coaching Intensive at the Assets Learning Conference. This intensive will be a great opportunity to learn the different models of providing financial coaching and learn about the extensive resources to help support your program.

Financial skills and knowledge helps families build financial security in the long-term. Financial coaching increases knowledge, capability and confidence giving families the tools to succeed on their own.

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Staff #ALC2014 Picks: Jennifer Brooks

By Paul Day on 09/11/2014 @ 04:00 PM

Tags: ALC 2014

The 2014 Assets Learning Conference is only a few days away! We’re excited to share CFED’s ALC Staff Picks, representing different areas of our work and what we’re looking most forward to at the conference. We hope these picks will help you decide where to go and what to see!

Jennifer Brooks is CFED’s Director of State & Local Policy

Q: Which sessions are you looking forward to?

A: My session picks:

Wednesday:
A&O Network Leadership Intensive
How to Scale Financial Capability Programs
In the Absence of a National Platform (Roundtable)

Thursday:
Integrating Asset Building into Head Start Programs

Friday:
Engaging Direct Service Providers as Constituents and Sensational Advocates

Q: What are your most important takeaways from the conference?

A: My takeaways:

  • Increased leadership, ownership and participation in the Assets & Opportunity Network
  • Hundreds of conference attendees feeling empowered to as advocates from their Hill Visits
  • Learn from session on engaging service providers as advocates and apply it to my work.

Q: For the folks who are traveling to DC, what are some things worth seeing?

A: My DC picks:

  1. The zoo. It’s FREE
  2. The Lincoln Memorial. It’s awesome in the true sense of the word.

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Unique Partnership Brings Lending Circles to Angelino Immigrants

By Fran Rosebush, Andrew Chang and Mohan Kanungo on 09/11/2014 @ 01:00 PM

Tags: Assets & Opportunity Initiative

In an effort to alleviate financially vulnerable Angelinos’ lack of access to safe and affordable financial products, the Center for Asset Building Opportunities (CABO) turned to CFED, the Assets & Opportunity Network and JPMorgan Chase for support through the JPMorgan Chase Technical Assistance Fund (TA Fund). In line with CABO’s mission to provide low- and moderate-income households with access to financial resources that build, strengthen and sustain wealth, they used the TA Fund support to introduce Lending Circles to the local community in partnership with two members of the Los Angeles Financial Coaching Network (LAFCN): Mexican American Opportunity Foundation and Central City Neighborhood Partners.

Developed by Mission Asset Fund—a San Francisco-based nonprofit and Lead Organization in the Assets & Opportunity Network—Lending Circles are an award-winning and socially responsible financial product innovation. At its most basic level, Lending Circles are a form of social loans where members from the community help each other access capital for asset purchases such as starting a business, immigrating to a new country or offsetting the cost of a funeral. Through the TA Fund, Mission Asset Fund worked with CABO to provide:

  • Webinar overview of Lending Circles for Los Angeles Financial Coaching Network (LAFCN) partner organizations
  • In-person workshop on the nuts and bolts of a Lending Circle program for LAFCN partners
  • On-site technical assistance for two LAFCN partners: Mexican American Opportunity Foundation and Central City Neighborhood Partners

Since the start of this work in May, Mexican American Opportunity Foundation has already launched their first Lending Circle program with seven participants which will run from August 2014 through February 2015. And MAOF is predicting to reach their goal of 50 loans made within the first year. Central City Neighborhood Partners is also expecting to launch a Lending Circle soon. Through the TA Fund, CABO has been able to expand financial products offered within their financial coaching network and work towards their goal of expanding access to financial capability services and products to low- to moderate-income households in the Los Angeles community.

More background on Lending Circles

Developed by Mission Asset Fund—a San Francisco-based nonprofit and Lead Organization in the Assets & Opportunity Network—Lending Circles are an award-winning and socially responsible financial product innovation. At its most basic level, Lending Circles are a form of social loans where members from the community help each other access capital for asset purchases such as starting a business, immigrating to a new country or offsetting the cost of a funeral. People all over the world have been using the Lending Circle method for quite some time. In fact, in parts of the world, there were Lending Circles well before there were banks or other financial institutions.

Mission Asset Fund’s Lending Circle model is unique in that it utilizes a process whereby everyone who participates is both a borrower and a lender. In this system, each member contributes the same amount into a communal fund. Then, participants have the option to borrow loans from the communal fund in regular intervals, and they pay back a fixed amount that goes back into the fund. For example, for an average loan amount of $1,000, 10 participants would each make a monthly payment of $100. Each participant would receive the $1,000 loan and pay back $100 until each person has had access to the capital.

Striking about Mission Asset Fund’s Lending Circle model is that individuals are able to build their credit without paying any interest. The loans are formalized with a promissory note and program agreement. Payments are then reported to the credit bureaus, giving each participant the ability to build their credit. Data from previous Lending Circles indicate that participants have seen an average FICO score increase of 168 points, as well as an average reduction of outstanding debt within a ten-month period of $1,000.

The lasting effect of these improvements in the financial lives of low- and moderate-income Californians is obvious: having established a positive credit history opens doors to other wealth-building opportunities, such as the ability to open a bank account, purchase a car or home, or even obtain a job. The Lending Circles program addresses the importance of having and building credit through its comprehensive approach combining financial education and coaching with a responsible financial product that also helps individuals develop positive financial behaviors and attitudes through social accountability.

Center for Asset Building Opportunities (CABO), Lead Local Organization in the Assets & Opportunity Network

CABO’s work with the TA Fund to introduce Lending Circles in Los Angeles is just one of many ways they’re expanding economic opportunity for financially vulnerable Californians. CABO is currently developing a portfolio of responsible financial products that community-based LAFCN organizations can offer to help individuals develop financial capability and upward mobility. The portfolio will consist of products and services—like Lending Circles—that encourage positive financial behaviors, support long-term financial stability and promote economic inclusion.

As the Assets & Opportunity Network Lead Local Organization in Los Angeles, CABO will continue to raise awareness of the dangers of predatory alternative financing, such as payday-lending, check-cashing and auto-title lending institutions. CABO looks forward to continuing its partnership with organizations like Mission Asset Fund, CFED and JPMorgan Chase to promote the need for more financially responsible products within the community.

Also in This Series

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