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.
Author: Katie Plat
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.
The Supervitamin Quarterly Newsletter, Issue 27
This issue, Issue 27, provides updates on the CFE Fund’s and partner cities’ financial empowerment efforts, including a focus on our in-person convenings enhancing our work. Additionally, the issue describes the launch of a “Legacy Planning” pilot integrating estate planning services into Financial Empowerment Centers; shares updates from the CityStart initiative; and over 300 accounts are now certified as meeting the Bank On National Account Standards. Finally, this issue features a guest column from ChexSystems President Ron Whyte, highlighting how the ChexSystems Bank On bundle works to reduce the traditional barriers of negative banking history for under- and un-banked people.
CFE Fund Comment Letter on Community Development Financial Institution Revisions
The CFE Fund recently submitted a comment letter to the U.S. Department of Treasury on the proposed revisions to the Community Development Financial Institution (CDFI) certification application. The letter is specifically supportive of the inclusion of an expanded question evaluating a financial institution applicant’s checking or share account features and its use of Bank On National Account Standards as a guide. It’s a clear recognition of the impact of the Bank On national movement and the critical importance of safe and affordable banking options to meeting the broader mission of the CDFI program.
Intergenerational Wealth Transfer through FEC Counseling: A Multi-City Legacy Planning Pilot
The lack of intergenerational wealth transfer is a driving force preventing residents with low incomes from building wealth. Additionally, in many localities, because of both historic and current systemic racism and other barriers, Black residents and other residents of color experience more financial instability than White residents: as just one example, Black households have an average of one-fifth of the assets of White households. In response to this critical need, and with funding and partnership support from Bloomberg Philanthropies’ Greenwood Initiative, the CFE Fund and four local governments partnered on a novel effort to build Black people’s ability to transfer wealth to future generations by integrating estate planning, or “legacy planning,” into existing FEC counseling services.
In this brief, the CFE Fund provides an overview of the findings from the pilot study showing the positive impact of integrating legacy planning into FEC financial counseling. The CFE Fund’s Legacy Planning pilot demonstrated that FECs can play a unique role in helping clients, including Black clients, engage in legacy planning – ensuring that clients can achieve their longer-term financial goals and have an opportunity to transfer wealth across generations. By adding legacy planning services to FEC financial counseling, FECs can play an important role in supporting racial wealth equity.
The Supervitamin Quarterly Newsletter, Issue 26
In this issue, Issue 26, the CFE Fund celebrates its 10-year anniversary and provides updates on the CFE Fund’s and partner cities’ financial empowerment efforts, including an announcement that the Bank On movement has certified over 250 bank and credit union accounts, helping newly bank 3.1 million residents. Additionally, the issue announces the second cohort of FEC Academy; shares updates from the Financial Navigators initiative; and details the latest updates for a new expansion of the CityStart initiative to incorporate a racial equity lens. Finally, this issue features a guest column from Tulsa Mayor GT Bynum, highlighting Tulsa’s commitment to Financial Empowerment work, and the success of its Financial Navigators and Financial Empowerment Center programs.
CFE Fund Comment Letter on Community Reinvestment Act Reform
The CFE Fund recently submitted a comment letter to the Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) on their proposal to amend the regulations implementing the Community Reinvestment Act (CRA).
Citing experiences from the Bank On movement, as well as the FEC Public initiative, the CFE Fund supported the proposal for a new Retail Services and Products Test that would evaluate a bank’s branch availability, delivery systems, and the responsiveness of their products to the needs of low- and moderate-income communities; the CFE Fund also supported the highlighting of the Bank On National Account Standards as an example of a responsive deposit product. The CFE Fund suggested that the new Retail Services and Products Test 1) evaluates all large banks for the responsiveness of their deposit products; 2) enables “intermediate” sized banks to elect the Retail Services and Product Test; and 3) looks to the Federal Reserve Bank of St. Louis’ Bank On National Data Hub as an example of key metrics that examiners might use to assess financial institution account engagement.
Finally, the CFE Fund supported the agencies’ proposal to create a separate definition for activities that help individuals and families make informed decisions about managing income, savings, credit, and expenses that is distinct from other community development services, and suggested highlighting activities that produce measurable impacts such as banking access, credit score improvement, debt reduction, and savings increases.