Through our flagship Smart Money Coaching and Bank On programs, the Office of Financial Empowerment (OFE) is researching systemic barriers to banking, including ChexSystems records and debt in collections, and implementing solutions to resolve these barriers.
Through our flagship Smart Money Coaching and Bank On programs, the Office of Financial Empowerment (OFE) is researching systemic barriers to banking, including ChexSystems records and debt in collections, and implementing solutions to resolve these barriers.
Problem: Launched in 2006, Bank On San Francisco, successfully reduced unbanked rates from 15-20 percent in 2005 to 5 percent in 2017. However, OFE has found persistent disparities in banking access, and in some communities, particularly low-income communities of color, rates of unbanked clients remain high. In our Smart Money Coaching program that provides one-on-one financial coaching to low-income residents, 42 percent of Black clients enter the program unbanked compared to 32 percent of the overall Smart Money Coaching client population. Additionally, 50 percent of clients who enter the program unbanked report having previously had an account that was closed, and financial coaches consistently report that banking is the hardest outcome for clients to achieve.
Innovation: Many of the financial challenges our clients experience stem from structural flaws embedded in the financial system that strip families of wealth and keep them in a cycle of poverty. In order to support clients' access to safe and affordable banking, OFE realized it was critical to understand these systemic barriers, including ChexSystems records and debt in collections, to help individual clients navigate the current financial system. To address clients’ ChexSystems records, OFE recently partnered with the Credit Builders Alliance to allow Smart Money Coaching providers to use their new ChexAdvisor Educational Report which provides real-time detailed information on clients’ Chexsystems records. Coaches use this information, as well as the ChexSystems resolution process created by Bank On, to help clients with negative ChexSystems records access safe and affordable bank accounts.
OFE is also working with Community Financial Resources (CFR) to offer their consumer-friendly Focus Visa Prepaid Debit to clients who may not be good candidates for a traditional bank account. Lastly and most crucially, OFE is engaged in advocacy at the local, state and federal level to improve debt collections and bank garnishment practices to ensure that all San Franciscans have access to the financial mainstream. Read more about Systemic Barriers to Banking here.