THE SUPERVITAMIN QUARTERLY
Issue 7/ February 2016
Letter From The President and CEO
   

As we enter a new year and think about the opportunities to come in 2016 and beyond, my mind goes right to the magic of true confluence. Initiatives that have proven most exciting and successful - and most sustainable - are those in which partners from multiple sectors come together, not just for a common goal, but from their own, separate vantage points. The Venn diagram approach to partnership success doesn't seek to push entities in a new direction, but instead identify where existing directions overlap meaningfully for common goals.

The Bank On work comes first to my mind. The overlap on the work and priorities of mayors, financial institutions, banking regulators, community organizations, and consumer advocates is palpable, and the enthusiasm surrounding the new National Account Standards is already creating new and far-reaching possibilities for large scale banking access. Rather than everyone giving up a little or not getting enough, the energy of this work is marked by forward motion. Within this work together, sectoral partners are identifying their own meaningful metrics of success, their own programmatic and communications opportunities, and ways in which their own future plans might be augmented by the Bank On partnership. Our city partners' larger scale replication initiatives are poised to succeed beyond grant funding for the same reason --   Financial Empowerment Centers and   Summer Jobs Connect both need to work from too many vantage points to succeed longer term without the power of such confluence.

And we've brought this perspective to our work helping new mayors build out their administration's financial empowerment agendas in our Next Generation Municipal Financial Empowerment Awards work. A critical step in both a credible initial landscape analysis and a go-forward strategy for any successful municipal financial empowerment agenda depends upon harnessing the momentum and power of multiple stakeholders-government staff, community organizations, private employers, and financial institution partners, among others. We hear the same over and over from CFE Coalition city experts, most recently at our last meeting in Savannah. There, member cities detailed program after program involving multiple partners, both in and out of government, aligning efforts for mutual gain, including a site visit to a workforce development partner whose job placements were more successful thanks to the addition of financial counseling. 

And, in the same vein, thank you as always for your emails, ideas, and partnership!  

Jonathan Mintz

BANK ON NATIONAL ACCOUNT STANDARDS LAUNCH, FUNDING OPPORTUNITY, AND CFPB TESTIMONY

This month, the CFE Fund was invited to testify at a Consumer Financial Protection Bureau (CFPB)  field hearing  in Louisville, KY, where they announced new efforts to help consumers access safe checking accounts. CEO Jonathan Mintz spoke about the national Bank On movement, including the newly-announced Bank On National Account standards (detailed below), as well as the role that local Bank On coalitions can play in connecting consumers to safe and appropriate bank accounts.  

In October, the CFE Fund was joined by Federal Deposit Insurance Corporation (FDIC) Chairman Martin Gruenberg, and San Francisco's Mayor Ed Lee and Treasurer José Cisneros at San Francisco City Hall -- along with a host of national and local partners, including Bank On seed funder JPMorgan Chase's Naomi Camper -- to   announce the new Bank On National Account Standards (2015- 2016). These first-time national standards for local Bank On coalitions were forged over many months with partners across several sectors; they identify both core and recommended features for safe and affordable banking products, including low costs, robust transaction functionality, and no overdraft. 

Nationally, accounts that meet these standards -- including Chase's Liquid SM account, Citi's Access Account, and Bank of America's SafeBalance Banking account -- are available at almost 11,000 branches in 41 states and Washington, DC; Wells Fargo also announced its commitment to do the same with its Easy Pay SM Card by June 2016, adding their 6,200 nationwide branches to the total. Local Bank On coalitions will be able to use these standards to identify other local and regional banks and credit unions that offer accounts that meet the standards, or engage institutions to encourage them to do so.

The CFE Fund also announced our new Bank On Capacity Grant Fund, generously supported by JPMorgan Chase & Co., that will support local coalitions' efforts to partner more effectively with financial institutions and other key partners to connect their unbanked and underbanked residents to safe and appropriate mainstream accounts. The grant application is open now, and proposals will be accepted on a rolling basis.

NEW REPORT: ACCOUNT SCREENING CONSUMER REPORTING AGENCIES AND BANKING ACCESS

Late last year, the CFE Fund and the National Consumer Law Center released a joint report,  Account Screening Consumer Reporting Agencies: A Banking Access Perspective. The report highlights the impact of account screening consumer reporting agencies (CRAs), like ChexSystems, on banking access. The report points out several areas of concern about account screening CRAs, including accuracy, consistency, proportionality, transparency and error resolution. 

The report outlines a key set of recommendations for financial institutions and regulators, including both for industry reform and regulation. They include:
  • consistent definitions and reporting standards for CRAs;
     
  • clear and transparent financial institution standards on how they will respond to negative events;
     
  • limited account denials or offering of overdraft-free and other "second chance" accounts by financial institutions; and
     
  • regulatory guidance on accuracy and error resolution issues.
Read the report here.

UPDATES FROM S UMMER JOBS CONNECT 
  
The CFE Fund is excited to share a new series of reports from our Summer Jobs Connect (SJC) initiative, generously supported by the Citi Foundation, which leverages the scale and infrastructure of s ummer youth employment programs to create banking access and other financial empowerment opportunities. Our eight SJC city partners include: Chicago, Los Angeles, Miami, Newark, New Yo rk City, San Francisco, St. Louis, and Washington, D.C.

The new three-report compendium details our city partners' variety of strategies to provide banking access and targeted financial education as part of their local SYEP programs, and how they are working to sustainably embed these efforts into their program infrastructure.
  • Brief One: Direct Deposit and Financial Education focuses on the methods that SJC cities used to enroll participants in direct deposit, how they partnered with financial institutions to ensure availability of appropriate accounts, and how they used targeted financial education to support positive banking behaviors.
  • Brief Two: Incentives for Banking and Savings describes five SJC cities' use of incentives to encourage banking and savings, highlighting lessons learned and how payroll and program infrastructure affect incentive successes.
  • Brief Three: Systems Change for Sustainability details the structural changes that cities made to SYEPs seeking to sustainably embed financial empowerment, and the ways in which the SJC movement already has influenced policymakers.

NEXT GENERATION MUNICIPAL FINANCIAL EMPOWERMENT AWARD UPDATE

The CFE Fund is providing in-depth technical assistance to five new Mayoral administrations as part of our Next Generation Municipal Financial Empowerment Awards, supported by Capital One. The following mayors were selected for this year-long intensive grant and technical assistance award: Boston Mayor Martin J. Walsh, New Haven Mayor Toni N. Harp, Oakland Mayor Libby Schaaf, San José Mayor Sam Liccardo, and Shreveport Mayor Ollie Tyler.

The CFE Fund is working with each administration to create local, detailed plans for strategic integration of financial empowerment strategies.  Repeated site visits combined with a detailed landscape analysis in each city is highlighting opportunities and challenges, informed by stakeholder meetings and new, city-led Advisory Groups. 
  • Oakland Mayor Libby Schaaf, New Haven Mayor Toni N. Harp, and Shreveport Mayor Ollie Tyler are each working with the CFE Fund to develop entirely new financial empowerment programs, beginning with a stakeholder analysis and an assessment of the cities' existing financial empowerment capabilities. 
     
    • In Oakland, Mayor Libby Schaaf is working with the CFE Fund to develop a citywide framework for a comprehensive financial empowerment strategy. 
       
    • New Haven Mayor Toni N. Harp has begun working with local partners like Yale University to develop financial empowerment programs for the homeless and prisoners reentering the community. 
       
    • Mayor of Shreveport Ollie Tyler is working with the CFE Fund to create a Mayoral Financial Empowerment Commission that will focus on providing residents with support services to properly manage their finances. 
       
  • Under the leadership of Mayor Martin J. Walsh, Boston is focusing on continuing to integrate its financial wellness screening initiatives into existing social service programs through its recently established Office of Financial Empowerment. 
     
  • In San José, Mayor Sam Liccardo is developing a workforce program geared towards youth and young adults called San José Works, and will work with the CFE Fund to embed financial empowerment strategies. 

SAVEUSA: TAX TIME SAVINGS WORKS!

The CFE Fund is excited to share new evaluation findings from partner research firm MDRC, as well as programmatic resources about the SaveUSA initiative. Piloted at select free tax preparation sites in four cities, SaveUSA is a simple tax time matched savings program -- tax filers who deposited part of their refund into a designated account, and maintained the deposit for a year, received a 50% savings match up to $500. 

SaveUSA was designed to test if the tax time moment, when filers with low incomes often receive a significant refund, could be used to encourage short-term savings as a realistic first step towards longer-term financial stability. 

New evaluation results, from a rigorous randomized control trial, provide strong evidence that low-income families can save for the short-term, and the tax time moment can be leveraged to help them do so. Key findings include: over 70% of participants saved for a year and received the match, without incurring any debt or financial hardships to do so; even after the program ended, SaveUSA participants were more likely to save, and saved 30% more, than the control group; and the program improved savings habits and reduced liquid asset poverty among participants. Read the evaluation report here .

The CFE Fund is also excited to share a number of new resources for communities interested in replicating the SaveUSA initiative, produced in partnership with the New York City Center for Economic Opportunity. These include:
  • A  SaveUSA Playbook, outlining the key program elements as well as talking points to develop program champions;
     
  • A  video featuring the SaveUSA program model and success stories; and
     
  • An infographic for program impact highlights.
Finally, SaveUSA was designed as a test for a broader policy goal: integrating a tax-time savings incentive into the federal tax code. In December, Congressman José Serrano (D-NY)   reintroduced the Financial Security Credit Act of 2015.  Drawing on evidence provided by SaveUSA, the bill would permanently create such a matched-savings opportunity, available for all Americans.

This exciting policy effort will be highlighted at an upcoming event in New York City on 2/22, convened by the CFE Fund, the Center for Social Development at Washington University in St. Louis, New America, and the Federal Reserve Bank of New York. "Leveraging Tax Time to Build Financial Capability: Research Evidence and Policy Directions" will bring together leaders from philanthropy, government, policy, practice, and academia to review the latest research findings and future directions on using tax time as a catalyst for short and long-term savings. RSVP here .

GUEST COLUMN: BANK ON AND THE IMPORTANCE OF ACCESS TO BANKING
 
By Martin J. Gruenberg, Chairman of the Federal Deposit Insurance Corporation (FDIC)
 
(Delivered at the CFE Fund's Bank On National Account Standards Launch on October 27, 2015 in San Francisco) 


Access to banking services is an important challenge for many U.S. communities. As local coalitions work to connect households with accounts that meet these standards, they open up opportunities for families to benefit from our banking system.
 
While economic inclusion often begins with a safe and affordable bank account, 7.7 percent of U.S. households do not have a checking or a savings account, according to the FDIC's National Survey of Unbanked and Underbanked Households. The Survey has found consistently that households were unbanked for three primary reasons: consumers said they believed that they did not have enough money to open an account, that they were concerned about unexpected fees and charges, and that they did not trust banks.

We developed a Model SAFE account template that addressed these barriers, and piloted it with nine banks. They found that these accounts had costs and risks no greater than other transaction account products.

The national standards announced by the CFE Fund are consistent with the goals and core features of our Model SAFE Account. Bringing accounts that meet these standards into more communities, including to low- and moderate-income people, will benefit families, communities, and financial institutions. Families will benefit as they use the accounts, combined with financial education tools and responsible credit products, to successfully save and borrow. Communities will benefit as the economic activity of households increases, with greater access to efficient and effective financial services. And financial institutions will benefit as they meet the convenience and needs of a broader range of consumers in a way that expands each institution's ability to grow in a more diverse and dynamic environment.

Using the Strength of Bank On Coalitions
 
Bank On coalitions have been effective in connecting diverse groups of consumers to safe accounts. Bank On coalitions are supported by municipal leaders from city government and from community-based organizations that offer a wide range of services to the broadest range of local communities. And the community members of these coalitions engage financial institutions in problem solving to improve community access to financial information and services.
 
The FDIC has encouraged this kind of collaboration by providing technical assistance to many of Bank On's bank and community leaders. And we certainly intend to continue in that role.
 
City and community leaders also have an important role to play by including activities that help the unbanked strengthen financial well-being and open accounts in local programs. By working together to integrate financial services into important local initiatives, we expand opportunities for people to achieve education, income, housing, and community goals.  I look forward to continuing our work at the FDIC in partnership with the Cities for Financial Empowerment Fund, the Bank On program, local governments and other organizations to bring more people into the banking system.

STAY TUNED FOR: 
 
Details on our conference and journal on the professionalizing field of financial counseling and coaching...evaluation results from our Financial Empowerment Center initiative...and the 2016  Bank On Conference. Watch your inbox!!!

NEWS FROM THE CFE COALITION

The CFE Coalition welcomed three new members-Boston, MA; Nashville, TN; and St. Louis, MO. Each city was invited to join the Coalition because of their deep commitment to municipal financial empowerment strategies. In addition, Lansing, MI was selected as Coalition Co-Chair.


Financial Empowerment "In The News"

 

Emergency Savings Incentives Needed to Grow a Strong Middle Class, The Hill

 

Banks are Warned Against Hindering Customers Seeking Accounts, The New York Times

 

CFPB asks Banks to Make Low-Cost Accounts Available to Consumers, the Wall Street Journal

 

With CFPB Rules Forthcoming, Banks Make Strides on Overdraft, American Banker

 

Big Banks Sign On to Safer Account Standards for Underserved, American Banker

 

RushCard Breakdown Affects Thousands of Prepaid Debit Card Users, The New York Times

 

Denver Creates Office to Help Residents Achieve Financial Stability, The Denver Post 

 

New Barry Office Focuses on Affordable Housing, Workforce, The Tennessean