Tag: banks

The Newspaper That Tells Tales of Homelessness, How to Help the Poor Build Credit and More

Posted on by robbie

 

On the Streets with a Newspaper Vendor Trying to Sell His Story, CityLab

It can be uncomfortable shelling out change to a beggar living on the street, but would you be willing to pay $2 for a newspaper about homelessness and poverty? Robert Williams, a Marine Corps veteran who writes for Street Sense, a biweekly broadsheet in Washington, D.C., hopes so. For every copy he sells, he keeps 75 percent, his only source of income.

Banking on Justice, YES! Magazine

In the impoverished Mississippi Delta region, most locals can’t borrow from large banks such as Citibank, Wells Fargo and JPMorgan Chase because small loans don’t make enough interest to be worthwhile. Instead, residents are increasingly turning to Community Development Financial Institutions, known as CDFIs, which receive federal assistance in exchange for making capital available in low-income areas.

When Teachers Take A Breath, Students Can Bloom, NPR

Educators have it rough. If keeping up with children’s energy levels for six hours isn’t enough, they also need to help students cope with difficulties outside the classroom and meet the rigors of state testing and federal standards. That can lead to a lot of stress, which is why CARE for Teachers trains educators in meditation techniques proven to reduce anxiety and burnout.

MORE: Mindfulness at Work: 7 Places Where Employees Benefit from Meditation

This Camouflaged Credit Union Saves Immigrants From Predatory Loans

Posted on by robbie

If you see a neon sign on a storefront reading “cambio de cheques” (check cashing), you probably think it’s just like any other check-cashing and payday loan purveyor out there.
But while the Community Trust Prospera in East San Jose, California, is situated in a strip mall next to a beauty shop (like many other check-cashing joints), it’s anything but your typical check-to-cash operation.
The Community Trust Prospera is actually a credit union, offering its patrons (many of which are Latino) much more than just quick access to greenbacks. It provides patrons the opportunity to build their credit.
Many immigrants conduct their lives on a cash-only basis, steering clear of intimidating banks. Last year, the National Council of La Raza estimated that 20 percent of Latinos in America don’t use banks, a higher rate of bank avoidance than what is found among any other group.
In response, Self-Help Federal Credit Union has opened six branches including Community Trust Prospera in San Jose and Los Angeles to try to reach some of these underserved communities. These branches now boast 11,000 members, who have socked away a whopping $1.3 million in savings.
Community Trust Prospera offers many of the same services that check-cashing and payday loan establishments do, but without the oft-typical predatory interest rates and fees. Alexia Fernández Campbell of National Journal spoke to Darwin Morán, who uses the financial institution to wire money to his family in El Salvador and to cash checks from his landscaping work. Initially, he resisted opening a bank account, but the staff there finally convinced him to.
“I started to become friends with them and slowly I started to change my mind,” Morán told Fernández Campbell. “Fixing my credit and paying my debts was so important to me,” he said.
Improved credit and a bank account gives low-income people a greater ability to rent an apartment. And taking advantage of programs such as Community Trust Prospera’s Fresh Start Loan (which is a type of loan that requires a deposit), eliminates the need to visit payday lenders — yet another important step towards establishing a more secure financial future.
MORE: Here’s A Smart Solution That Stops Immigrants From Being Robbery Victims
 

How to Get People to Save When All They Want to Do Is Play the Lottery

Posted on by robbie

What if every time you played the lottery, you couldn’t lose? Well we don’t want to get your hopes up. Like most forms of gambling, your odds of striking gold in a traditional lottery are terrible. Consider Powerball, one of the country’s most popular games: your chances of winning are about one in 175.2 million — good luck with that. But 34 banks and credit unions in four states are experimenting with a different way to entice people to save money instead of wagering it on scratch tickets. With “Save to Win” programs, every $25 that a customer deposits into a special account (up to 10 deposits a month) earns them an entry in a small monthly prize drawing, as well as a yearly grand prize. Even if members don’t win one of the “sweepstakes” — American banks aren’t allowed to run raffles or lotteries — they get to keep all the money they put in, plus interest.
lottery-savings-1Tim Boyle/Getty Images
MORE: Online Money Pooling Could Build Credit History for America’s Working Poor
Prizes and rules for prize-based savings programs vary by credit unions and states, but monthly drawings can range from $10 to $100, and the grand prize can be up to $10,000 — no small sum for customers who struggle to scrap together a valid emergency fund. Save to Win was first launched in 2008 at eight credit unions in Michigan with the help of Doorways to Dreams, an organization that works with federal and state governments to allow banks to offer prize-linked savings, along with Michigan Credit Union League, the Center for Financial Services Innovation and the Filene Research Foundation. These groups designed how the program would run, and also paid for the administrative costs and the prizes — including 10 grand prizes, totaling $100,000.
ALSO: Seattle Readies ‘Financial Empowerment Centers’ for Low-Income Residents
Save to Win was an immediate success at Communicating Arts Credit Union in Detroit, where about 800 people — an eighth of their members — signed up, each saving an average of $300 extra. “I was struggling. I had tried lots of different things to get people to save,” Hank Hubbard, the credit union’s president and chief executive, told the New York Times, saying he even offered a certificate of deposit with 10 percent interest with a minimum deposit of $500 to encourage saving. “But our members can’t scrape together $500.” While the number of participants at Hubbard’s bank has dropped over the years, mostly due to the recession, the program still has between 500 and 600 accounts.
Now, D2D is trying another way to get people to “play to save.” The organization is developing a savings card, which can be sold at corner stores next to lottery tickets. For $15, customers can buy one of these cards and register an account online where they can add more cards as they buy them. These accounts would be held by the state in either personal or pooled bank accounts. Customers would be able to withdraw funds, while also being eligible to win prizes for as many cards as they purchase. D2D hopes to have a state pilot this program in 2015, giving people another way to win the lottery, without risking their savings.
MORE: Teaching High School Kids How Not to Lose a Fortune