The CFE Fund recently submitted a comment letter to the Board of Governors of the Federal Reserve System regarding their proposal to update the maximum interchange fees that can be charged by covered debit card issuers. The letter notes the CFE Fund’s learnings from our national Bank On initiative, which partners with financial institutions, community organizations, government leaders, and banking regulators to create pathways for un- and underbanked individuals to enter or reenter the financial mainstream with safe banking accounts; Bank On certified accounts have played a key role in programmatic banking access connections from local summer youth jobs programs to the U.S. government’s emergency pandemic relief funds. The fee limitations and features designated under the Bank On Standards were designed not just to meet consumer need but to be economically sustainable for financial institutions. The CFE Fund noted that our experience shows that interchange fees are a key part of that market sustainability. Read the full comment letter here.
Author: Katie Plat
CFE Fund and Wells Fargo Foundation Expand Bank On Fellowship
In this November 2023 press release, the CFE Fund announced the fourth cohort of Bank On Fellows, with funding from the Wells Fargo Foundation. The Wells Fargo Foundation’s investment will support six full-time Bank On Fellows for two years to help connect the more than 24 million people living outside of the U.S. financial system with safe, low-cost banking accounts.
This fourth cohort of Bank On Fellows includes: Bank On Arizona; Bank On CLE; Bank On Inland
SoCal; Kentucky Bank On Network; Bank On New Mexico; and Bank On Northeast Louisiana. They will
join a community of 100 local Bank On coalitions across the country, led by or working closely with local
government to expand access to financial products through payment and program opportunities
including unemployment insurance, workforce development programs, and more. This cohort includes
three statewide coalition leaders who will work to expand banking access across their entire states.
Boosting Sustainable Homeownership in Detroit: Adding Financial Counseling to Property Tax Relief Programs to Help Stabilize Low-Income Homeowners
Since it launched in 2020, the City of Detroit’s Financial Empowerment Center (FEC), as part of the CFE Fund’s national FEC Public initiative, has helped homeowners with low incomes avoid property tax foreclosure and stay in their homes. Working with the Wayne County Treasurer’s Office (WCTO) and the Wayne Metropolitan Community Action Agency (Wayne Metro), the City’s FEC joined a property tax relief ecosystem that is complex and constantly evolving, especially in response to the COVID-19 pandemic. Its ability to adapt to changing systems while remaining focused on client services enabled the FEC to help 485 homeowners reduce their overall debt by over $3 million to date.
To study the benefits of the relationship between Detroit’s property tax relief programs and the financial counseling services provided by the FEC, the CFE Fund partnered with the City of Detroit and MEF Associates, with generous support from the Wells Fargo Foundation. This study combines original qualitative research with a unique analysis of administrative data to explore sustainable homeownership outcomes experienced by clients participating in FEC financial counseling, the factors that influence those outcomes, and other questions to inform future programming and the broader field.
This report outlines the challenge of property tax foreclosure in Detroit, the opportunity to connect residents in danger of foreclosure with FEC financial counseling, and findings on how Detroit’s publicly-led financial counseling program supports low-income homeowners with property tax challenges.
Connecting Financial Capability and Small Business Supports: Findings from the Small Business Boost Pilot
The Small Business Boost pilot, with generous support from Principal Foundation, explored how FEC financial counseling can support the personal financial needs of small business owners and better position them to achieve their business goals. Five municipal FEC partners connected their professional, one-on-one financial counseling programs to their local small business entrepreneurship ecosystems. As a part of the SBB pilot, national research organization the Urban Institute conducted a process and outcomes study that examined pilot implementation, take-up and retention, and the role of personal financial counseling in small business development.
This brief outlines key findings about the client experience and the integration itself; read the full report from the Urban Institute.
Summer Jobs Connect to Provide Financial Education, Banking Access to Young People in 25 Cities
In this July 2023 press release, the CFE Fund announced the expansion of Summer Jobs Connect (SJC) through Summer Jobs Connect Academy, a new entry point for connecting banking access and financial education to Summer Youth Employment Programs (SYEPs).
Citi Foundation, the program’s seed funder, provided an additional $800,000 in support of the Summer Jobs Connect initiative’s tenth year; additionally, the PNC Foundation is supporting the expansion of the Summer Jobs Connect initiative in Albuquerque, NM and Pittsburgh, PA and The Skillman Foundation is supporting this work in Detroit, MI for a fifth year.
The Skyline: How Two States Used Unemployment Payments to Get Residents Banked
This issue of the Skyline (link) spotlights efforts in Illinois and Maryland to expand banking access by promoting and incentivizing direct deposits into safe bank and credit union accounts for unemployment payments. Previously, these payments were disbursed through paper checks or prepaid cards. Both states have ceased payments through prepaid cards, and focused instead onthe availability of safe banking accounts that meet the CFE Fund’s Bank On National Account Standards. These programs, and other similar efforts to connect large-scale public payments to safe banking access, have seen tremendous success—the FDIC found that 2021 saw the lowest national rate of unbanked people ever recorded, with over a third of those recently banked citing a government payment as the reason they opened an account. Read the full issue here and subscribe to the Skyline here.
The Skyline: How Innovative Programs Are Helping System-Involved Youth Succeed by Getting Them Banked
This issue of the Skyline spotlights innovative ways that programs are using direct cash assistance as an opportunity to provide system-involved young people with banking access. In the past, direct cash transfers have often been disbursed via prepaid cards, preventing recipients from connecting to the financial mainstream. This Skyline piece highlights programs in Allegheny County, PA and Milwaukee, WI that pair direct cash payments with financial education and other financially stabilizing opportunities – including incentivizing safe banking access for program participants. These programs have seen powerful results, with the majority of youth participants opening accounts and working towards financial independence. Read the full issue here and subscribe to the Skyline here.
Eight Cities to Build Financial Empowerment Efforts with Focus on Racial Wealth Equity
In this April 2023 press release, the CFE Fund announced that a second cohort of eight cities and counties have been chosen to join the CityStart initiative, with a specialized focus on racial wealth equity. The CityStart initiative helps local leaders develop and implement proven strategies to help local families and communities become more financially stable. Bloomberg Philanthropies’ Greenwood Initiative, whose mission is to accelerate the pace of Black wealth accumulation in the U.S., is advising the CFE Fund and municipal partners on the design and execution of the latest iteration of the CityStart program with a specific lens on racial wealth equity.
The CFE Fund will partner with local government leaders in Baltimore, MD; Cleveland, OH; Monroe, LA; Newark, NJ; Norfolk, VA; Rocky Mount, NC; Sacramento, CA; and Tallahassee/Leon County, FL to help them address the financial empowerment needs of residents and the opportunities to meet those needs, prioritizing the financial stability needs of Black residents. Each of the eight cities selected will also receive a $75,000 planning grant, drawn from a previous $19 million investment from Bloomberg Philanthropies. In 2022, the CFE Fund worked with an initial cohort of Cincinnati, OH; Mobile, AL; and South Bend, IN; these cities are in the process of drafting their CityStart financial empowerment blueprints.
CFE Fund Comment Letter on Statements on FDIC Advertising Rules
The CFE Fund recently submitted a comment letter to the Federal Deposit Insurance Corporation (FDIC) on the proposed changes to the rules governing the use of their official sign and statements about deposit insurance. The letter supports FDIC’s overall approach to ensuring that consumers understand when they are engaging a regulated financial institution and how the deposits are protected, and offers suggestions for effective implementation including a coordinated consumer awareness campaign and a robust compliance and enforcement strategy.
Bank On National Account Standards (2023-2024)
Working closely with our Bank On National Advisory Board and other key stakeholders, the CFE Fund released the Bank On National Account Standards. These standards provide local programs with a benchmark for account partnerships with financial institutions, and include both core and recommended features. The Standards were inspired by the 2012 Federal Deposit Insurance Corporation’s Model Safe Accounts Template. View the Spanish language version of the Bank On National Account Standards here.