Media Contact:
Stacy Opitz, Prepare + Prosper
stacy@prepareandprosper.org / 651-262-2162
Saint Paul, MINN. (March 15, 2019) –Twin Cities-based nonprofit Prepare + Prosper, known for annually serving 12,500 low- and moderate-income families with free tax preparation, financial services, and coaching, has announced that four nonprofit Twin Cities organizations will offer the three-part FAIR (Financial Access in Reach) Financial Solution to their customers. FAIR, which was launched as a pilot program with Sunrise Banks in July 2018, is designed to help financially underserved individuals build credit and savings and rid themselves of high-cost fees and interest by using products designed especially for them.
The four nonprofit distribution partners for the FAIR Financial Solution are: Build Wealth MN; Community Action Partnership of Ramsey & Washington Counties; EMERGE Community Development; and Lutheran Social Services Minnesota – Eastside Financial Center.
The FAIR Financial Solution is designed for financially underserved individuals (oftentimes called unbanked or underbanked) who often do not have access to fairly priced and designed products and often rely on costly services such as check cashers, payday loans, and bank accounts that charge excessive fees. FAIR is unique in providing a scalable approach to solving the financial inclusion gap by bundling consumer-designed financial products with fairer fees, coupled with financial coaching.
Further, unique to FAIR is that these products will not rely on bank branches for delivery, but instead will be offered to people where they work or receive services, such as nonprofit organizations and employers. This delivery model is based on the input of more than 150 financially underserved consumers who participated in listening sessions, which shaped the FAIR design and structure.
David McGee, executive director of Build Wealth MN, which serves clients in North Minneapolis, is excited to offer FAIR to the organization’s clients. “Build Wealth MN’s mission is to strengthen communities by empowering families to build wealth through economic development and we are excited to add FAIR products to our toolset as we work with families to help them gain financial independence,” said McGee. “Not only are the FAIR products necessary for our clients to transact, save and build credit, the fee structure and guided support will help customers use the products to their fullest benefit. I have been a part of FAIR since its inception and I am proud to be able to offer the service to our clients so seamlessly.”
On the east side of the metro area, clients of Eastside Financial Center will also be able to apply for the FAIR Financial Solution. “Our community, like far too many throughout the region and country, has a plethora of costly financial services which reinforce the widening wealth gap. The FAIR Financial Solution is an exciting and welcome answer to help us move families toward financial health. We have been at the FAIR table since the beginning because we and our community are hungry for innovative solutions, and we’re delighted to be among the first out of the gate to test FAIR’s unique delivery model,” said Eva Song Margolis, Eastside Financial Center.
The Problem
Too many people’s financial situations are volatile and many lack access to financial products that work for them. One in three Americans has no savings, according to Pew Charitable Trusts, making it difficult to withstand an emergency. According to a Federal Deposit Insurance Corporation’s (FDIC) “National Survey of Unbanked and Underbanked Households,” 33.5 million households in the United States are excluded from the financial mainstream. Of those households, 44 percent are households of color, as compared to 19 percent that are white households. In the Twin Cities, there are 194,432 financially underserved households. Alarmingly, the most recent Prosperity Now Scorecard data broken down by race found that 54.8 percent of households of color were financially underserved in the Twin Cities, as compared to 15.4 percent of white households.
There are many reasons traditional banking doesn’t work for everyone. Research from the FDIC and Prepare + Prosper show that many who are financially underserved do not trust banks, want to avoid unpredictable fees, or don’t have enough money to maintain an account. There is also a perception that bank accounts are not for households with low incomes. More than half of those included in the FDIC report said they believe banks are “not at all interested” in serving households like theirs. According to the 2017 Market Size Study presented by Center for Financial Services Innovation (CFSI), underserved consumers spent $173 billion in fees and interest.
“The financial inclusion gap is a big problem in the U.S. and in Minnesota. It negatively impacts people’s economic footing, well-being, health, and more, and not enough people are talking about it,” said Tracy Fischman, executive director of Prepare + Prosper. “People need financial products and a system that works for them and not against them as they strive to be financially successful.”
The Solution
To help families gain financial well-being, the FAIR Financial Solution, issued through Sunrise Banks, includes tools to:
- Transact through a checking account – No account overdraft fees, no monthly minimum balance requirement, $25 to start and a $3 monthly fee.*
- Save through a savings account – Start with $25, no monthly minimum balance requirement.*
- And build credit through a credit-building loan – There is no credit score requirement to get started.
Another key aspect of the FAIR Financial Solution will be enhancing technology and tools to support customers in working toward their goals and building financial confidence along the way. The technology and tools will be centered around human behavior and may take the shape of texts, apps, or social motivators to support continual savings and credit building.
The FAIR Roll-out
The initial 100 participants in the FAIR pilot project will be selected from Prepare + Prosper customers, as well as those served by partnering distributors. Plans call for FAIR product offerings to expand throughout the Twin Cities and Minnesota to 500 people in 2019 and beyond.
*Please consult service fee schedule for a detailed listing of all bank fees for this account.
About Prepare + Prosper
Prepare + Prosper is a nonprofit focused on building brighter financial futures for low- to moderate-income individuals and families. It provides free tax preparation; financial services, products, and coaching; and works to advance policies and practices that directly benefit the people it serves. In 2018, 588 volunteers prepared taxes for 12,385 taxpayers who received $23.9 million in refunds; 1,322 of those taxpayers committed to saving $1.9 million of their refunds. For more information, visit www.prepareandprosper.org, Facebook, and Twitter.
About Build Wealth MN – Build Wealth MN, Inc. (BWM) is a nonprofit organization with the mission to strengthen underserved communities by empowering families to build sustainable social and economic wealth. In partnership with private entities, state and local government, foundations and other social service organizations, BWM’s goal is to help families embrace a new approach to giving, spending, saving, banking, investing and creating generational wealth instead of generational poverty. www.buildwealthmn.org
About Community Action Partnership of Ramsey & Washington Counties – Community Action Partnership of Ramsey & Washington Counties (Community Action) is a nonpartisan, locally-run, nonprofit organization that brings together community resources to reduce poverty. Established in 1964, Community Action is the only continuously funded anti-poverty program in the country. Its mission is to reduce the causes of poverty and its impacts on people’s lives. www.caprw.org
About EMERGE Community Development – EMERGE operates a broad spectrum of workforce development and social enterprise businesses in the Twin Cities with the goals of better jobs, better lives, and better communities. Originally formed in 1995, EMERGE today offers adult and youth workforce and other services, ranging from basic job search coaching up to long-term intensive career training, tailored to the specific needs of the participant. www.emerge-mn.org
About Lutheran Social Service Minnesota – Eastside Financial Center – The Eastside Financial Center (EFC) in Saint Paul is one of many Lutheran Social Services Financial Counseling locations in Minnesota. The Eastside location offers unique services that integrate financial and employment support in addition to the other LSS Financial Counseling services that are available statewide. Many EFC staff are bilingual, and services are available at this location in English, Hmong and Spanish. https://www.lssmn.org/financialcounseling/financial-wellness-services/eastside-financial-center-services.
About Sunrise Banks – Sunrise Banks, N.A., based in St. Paul, Minnesota, seeks to radically change the way urban communities and people thrive by empowering them to achieve financial wellness. Sunrise is certified by the U.S. Treasury as a Community Development Financial Institution (CDFI), a designation earned by approximately 100 banks nationwide. Sunrise Banks is also a member of the Global Alliance for Banking on Values, a public benefit corporation and is a certified B Corp for its demonstrated commitment to transparent corporate governance and positive community impact. Visit Sunrise Banks at SunriseBanks.com, on Twitter @SunriseBanks, or on Facebook. Member FDIC.
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