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BankOn Referral NetworkAsset Building Panel

Engaging Families for Success ConferenceOctober 28, 2013

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1. Asset Development Strategies for Municipalities

2. High-Cost Fridge Services: The landscape for unbanked and underbanked consumers

3. BankOn Program Services

4. What We’re Learning

5. Partnership: Strengthening the Referral Network

Topics

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BankOn Referral Network

The BankOn Referral Network is a program initiated by the Coalition of Economic Opportunity, including the City of Charlottesville, area

nonprofits, and local financial institutions.

Formally launched in April 2013, our partnership aims to provide unbanked and underbanked community members with increased

access to financial education and safe, affordable consumer banking and lending products.

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1. Asset Development for Municipalities:

Models from the Maryland CASH Campaign and the National

League of Cities

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What is Family Asset Development?

“An anti-poverty strategy that helps low-income people move toward greater self-sufficiency by accumulating savings and purchasing long-term assets… Examples of long-term assets include a

home, higher education and training, and a business.”

Source: Assets for IndependenceUS Administration for Children and Families

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Tools for Asset Building

Individual Development Accounts (IDAs)

Earned Income Tax Credit (EITC)

Financial Literacy

Children's Savings Accounts

College Savings Accounts

Source: Assets for IndependenceUS Administration for Children and Families

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Six Ways to Start Building Financial Security & Opportunity at the Local Level

1. Raising awareness about available services and consumer protections.

2. Increasing access to financial education through provider networks.

3. Connecting residents to safe and affordable financial products.

4. Mitigating foreclosures by coordinating services and leveraging resources.

5. Preventing predatory

lending through local ordinances.

6. Modeling a strong role for employers through benefit structures and human resource policies.

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City Council Vision

Charlottesville: A Great Place to Live for All of Our Citizens◦ A leader in innovation, environmental sustainability, and

social and economic justice, and healthy race relations.

Economic SustainabilityOur community has an effective workforce development system... We have a business-friendly environment in which employers provide well-paying, career-ladder jobs and residents have access to small business opportunities.

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2. High-Cost Fringe Services: The Landscape for Unbanked and

Underbanked Consumers

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High-Cost Fringe Lenders

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High-Cost Fringe Lenders

Source: VaPERL

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Cost of Being Unbanked• Cost of Fees: On average fees are

5% of net income; about $1,000 in fees per year.

• Public safety: Without a safe place to keep their money, unbanked individuals are more likely to be victims of crime.

• Disaster preparedness: In the event of an emergency, unbanked families have no safe way to access their money, and any cash kept in the home may be lost.

• Asset building: Without a bank account, families lack the ability to save for the future, establish credit and access asset-building instruments such as loans for a car, small business or home mortgage.

Source: www.JoinBankOn.org/about/

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3. BankOn Referral Network:Safe, Affordable Deposit Accounts

Alternative Small Dollar LoanFinancial Education

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Affordable Deposit Accounts

BankOn or Partner Agency

Financial Education

Partner Bank or Credit Union

UNBANKED

BANKED

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Deposit Account Features

Member FDIC Member FDICMember FDICFederally Insured by the NCUA

Member FDIC

CarterBank & Trust

◦No or low opening deposit, no min monthly balance, no or low monthly fees, three free cashiers checks per month

◦Options for clients with negative ChexSystems history and/or low credit score

◦Some partners offer monetary incentives for completing financial education

◦Some partners offer inclusive ID policies, options for people without SSN

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Alternative Small Dollar Loan

1. ReferralThrough BankOn, MACAA, Love INC, or Charlottesville DSS

2. Qualification & Financial EducationClients qualify for the loan by providing proof of income and expenses, completing financial session on budgeting and credit, and creating monthly spending plan demonstrating ability to repay

3. Small Dollar Loan• Virginia National Bank• Loans of ≤$650 with 18% APR, repayment terms of 6-12 months

Member FDIC

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Agency or Individual

BankOn Referral Network

Financial Education Provider

BankOn Product

BankOn Referral Network

BankOn Product

Financial Education Provider

Financial Education

Agency or Individual

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4. What We’re Learning

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Information GatheringWho are we reaching?

How effective are our products and services?

What additional products and services would support family economic security? Can we refer clients to these or do they need to be created?

What additional challenges are underbanked families facing?

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Participant Survey

Baseline and follow-up survey follows participants collecting data on:

◦Financial goals and behaviors

◦Current finances and financial history

◦Desired products and services

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Current numbersFinancial Education City Participants Albemarle

ParticipantsOther Counties

ParticipantsLocality Data not collected

Totals

Community Workshops 40 0 0 0 40

For Unbanked/Underbanked with referral to product

28 17 12 8 65

Fin Ed Totals 68 17 12 8 105

 

Affordable Consumer Products

City Participants Albemarle Participants

Other Counties Participants

Locality Data not collected

Totals

Small Loans 17 6 4 0 27Bank Accounts       31 31+

Product Totals 17 6 4 31 58+

   City Participants Albemarle

ParticipantsOther Counties

ParticipantsLocality Data not collected

Totals

Totals, Financial Education and

Products85 23 16 39 163

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5. Partnership: Strengthening the Referral Network

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BankOn Partnership

How can BankOn best support your clients?

Individuals and Agencies:Contact BankOn directly at 434-906-4674 for more information, for product referrals or to schedule financial education.

Agencies: Partner with BankOn to train frontline staff to refer your clients directly to BankOn products.