Local opinion leaders joined a robust discussion about minority economic empowerment and financial inclusion. We explored questions such as: How can the country close its widening wealth gap? What investments and innovations are working to improve minority access to key monetary services? What is the government's role in moving the country's underserved populations into the financial mainstream? And what lessons can be learned from recent demographic developments in San Francisco?
You can watch a recording of the summit. And catch up on Twitter at #NJNextAmerica.
Here are three things I noted:
1. Senator Kevin de León (D-Los Angeles), our new President pro Tempore, totally "gets it." He represents a tremendously diverse community in the Senate, including Koreatown, Thaitown, Chinatown, Downtown and Boyle Heights. And he understands that "It's very expensive to be poor."
2. When describing low-income households, it's likely inaccurate to describe anyone as "unbanked." Someone may not have a relationship with a bank, but that doesn't mean they aren't receiving a tremendous amount of financial services. Whether we call them "fringe financial services," "shadow financial services," "alternative financial services," or anything else, they are quite often very expensive. (Think payday lenders, check cashers, and auto title loans.) And if they are affordable, often, they're offered by local non-profit organizations that have great solutions for a particular community that often don't scale or translate well more widely.
A 2014 report by Accenture found 70% of people surveyed would prefer to "bank" with Google or Apple. So Arjan Schutte of Core Innovation Capital, asked "Why call it banking? Or underbanked? The point is financial health." And Rachel Schneider of Center for Financial Services Innovation said it's not about banked, or unbanked it's: "Is your money working for you?"
3. The idea was bandied about that we need to get missionaries (mission-driven actors, aka, non-profits) to act more like the mercenaries (aggressive, expensive, high-cost lenders, aka payday lenders, check cashers, etc.) if we want to see good prevail over evil. I'm all for applying a business approach to social challenges. But this dichotomy often implies that non-profit organizations are doing something slow, backwards, or inefficient. So, I believe in the idea. I'm ready to join up in the fight. But I just gotta say: Hey! Let's encourage growth and innovation without putting down great things like trust, competence and knowledge that are slower to build in our communities, but essential for growth in the long-term.