Economic Inclusion FLORIDA PROSPERITY PARTNERSHIP S 9 TH ANNUAL STATEWIDE TRAINING CONFERENCE. Penny King and John Olsen FDIC Community Affairs

Transcription

1 Economic Inclusion FLORIDA PROSPERITY PARTNERSHIP S 9 TH ANNUAL STATEWIDE TRAINING CONFERENCE Penny King and John Olsen FDIC Community Affairs June 1, 2017 Orlando, Florida 1

2 Connecting to FDIC Community Affairs 2

3 Banking and Economic Inclusion Increasing households access to safe, secure and affordable banking services improves their ability to build assets and create wealth, protects them from theft and discriminatory or predatory lending practices, and provides a financial safety net against unforeseen circumstances( ) In addition, broad participation in banking relationships promotes public confidence in the financial system, which is itself a core responsibility of the FDIC. FDIC Chairman Martin Gruenberg December

4 Accessing the Data 4

5 Banking Status of Households (2015 Survey Data) 5

6 Banking Status of Households Year Unbanked (Percent) Underbanked (Percent) Fully banked (Percent) Banked, underbanked status unknown (Percent) Note: + indicates estimates that are not directly comparable to 2013 and 2015 Underbanked rate in 2015 was very similar to

7 Underbanked Definition Alternative Financial Service (AFS) Survey Year Nonbank money order Nonbank check cashing Payday loan Pawn shop loan Rent-to-own service Used in the past 12 months Used in the past 12 months Used in the past 12 months Refund anticipation loan Nonbank remittance Auto title loan Not included 7 7

8 Characteristics of Unbanked Households Households more likely to be unbanked than the population as a whole are those: With a black, Hispanic non-black, or American Indian/Alaskan householder Where Spanish is the only language spoken at home With a householder that is a foreign-born noncitizen That are family households with an unmarried female or male family householder Earning less than $30,000 With a householder holding less than a high school degree With a householder under age 45 8

9 FDIC SAFE Account Template Purpose: To help meet the needs of U.S. households that are either unbanked or underbanked and serve as an onramp to mainstream institutions. Development: Advisory Committee on Economic Inclusion Core features: Insured deposits with consumer protections Transparent charges Reduced minimum to open: e.g. $10-20 Low-costs with fees that are proportional to costs: e.g. Up to $5 monthly fee or fee waiver with direct deposit/bill pay Card-based electronic access Other features: savings options, financial education 9 9

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11 FDIC SAFE Account Coverage,

12 SMALL DOLLAR LOANS TEMPLATE 12

13 Need for Financial Education Examples: FINRA Foundation study found 61% of credit card holders did not compare credit cards NFCC survey found 60% of Americans spend without a budget 2016 Retirement Confidence Survey of the Employee Benefit Research Institute found approximately 26% of respondents said they had less than $1,000 saved for retirement; 64% had less than $50,000 Research shows financially capable young people are more likely to become financially secure adults 13

14 Learning about Finances, 2015 National Florida Miami MSA Asked bank teller/customer service about finances Attended financial education classes/counseling Learned about financial education from bank NA NA NA indicates that the sample size is too small to produce a precise estimate. Financial Institutions and organizations involved with financial education may consider utilizing the FDIC s free instructor-led curriculums Money Smart

15 FDIC & Financial Education Long-standing commitment Reasons for FDIC s involvement: To help fight predatory lending To encourage financial institutions to identify untapped markets To assist consumers in shaping their financial future To assist in a complicated financial landscape 15

16 The Economic Inclusion Ladder 16

17 Role of Financial Education FDIC initiatives demonstrate that welldesigned financial education programs can have a positive impact on consumers ability to make sound choices Experiential-based approaches are particularly promising for young people 17

18 What Should We Be Teaching People About Money??? 18

19 Get a Copy of Your Credit Report Order a free credit report from each credit bureau once every 12 months through 19

20 Reasons Why Money Smart is Unique FREE! Multiple Languages U.S. seal of approval Available in multiple media formats No licensing fee or copyright restrictions Scalable for more sophisticated consumers Designed for the Un-banked and Underbanked Flexible A la carte approach Easy to Learn Easy to Teach 20

21 The Money Smart Program Teach MS: Money Smart for Young People Pre-K thru Grade 12 (2015) Money Smart for Young Adults ages (2008) Money Smart for Adults (2001) Money Smart for Small Businesses (w/sba 2012) Money Smart for Older Adults (w/cfpb 2011) Learn MS: Computer Based Instruction (CBI) (2004) Money Smart Podcast Network (2009) 21

22 Money Smart for Adults The Modules Bank on It Borrowing Basics Check It Out Money Matters Pay Yourself First Keep It Safe To Your Credit Charge It Right Loan To Own Your Own Home Financial Recovery Two Formats In Nine Languages English Chinese Haitian Creole Hindi Hmong Korean Russian Spanish Vietnamese Instructor-led Self-paced 22

23 Money Smart for Young Adults The Modules Bank On It Check It Out Setting Financial Goals Pay Yourself First Borrowing Basics Charge It Right Paying for College and Cars A Roof Over Your Head Two Formats Instructor-led (ages 12-20) Self-paced (ages 13-20) 23

24 Money Smart for Young People Money Smart for: Grades Pre-K-2 Grades 3-5 Grades 6-8 Grades 9-12 (and year olds) Four curriculums Instructor-led 24

25 Involves Educators, Students, and Parents/Caregivers Resources for: Teachers Educator Guide Overheads Students Parents/Caregivers Resources to support learning Conversation-starters Activities 25

26 Grades Pre-K to 2 Educator Guide Lessons: 1. Counting Coins - Understanding Currency 2. Learn to Earn - Earning Money 3. Weighing Wants and Needs - Wants versus Needs 4. Ready. Set. Goal. - Setting Goals 5. Super Savers - Saving and Spending 6. Borrowing Bills - Borrowing and Lending 26

27 Grades 3-5 Educator Guide Lessons: 1. Money Matters - Buying Decisions 2. Get Set for Goals - Setting Goals 3. Make a Plan - Budgeting 4. Save Your Money Saving 5. Which Way to Pay? - Payment Options 6. Get Invested - Introduction to Investing 7. It s Great to Donate! - Charitable Giving 8. Career Choices - Exploring Careers & Income 27

28 Grades 6-8 Educator Guide Lessons: 1. The Path to Success - Career and Job Opportunities 2. Bread and Butter - Introduction to Taxes 3. Designing Dreams - Financial Goals 4. Being a Savvy Shopper - Smart Shopping 5. Go with the Flow - Cash Flow and Budgeting 6. Super Savers - The Importance of Saving 7. How to Stash Your Cash - Savings Options 8. Money Doesn t Grow on Trees - Investing Options 9. Give Credit Where Credit Is Due - Credit and Debt 10. Protecting Yourself - Protecting Your Identity 11. Risky Business - Financial Risk 12. Spend, Save, or Give? - Personal Financial Choices 28

29 Grades 9-12 Educator Guide Lessons: 1. Working Hard for the Money - Career Options 2. Designing Dreams - Financial Planning 3. Can You Pay Your Bills? - Spending and Budgeting 4. Boost Your Savings - Importance of Saving 5. Bank Your Bucks - Choosing a Banking Partner 6. Bread-and-Butter - Managing Your Paycheck 7. Capacity, Character, Collateral, Capital - Credit 8. The Almighty Dollar? - Credit Cards 9. As Easy as Pi - Financial Ratios 10. Convertible or Clunker? - Automobile Purchase 11. Risky Business - Risk Management and Insurance 12. Halls of Knowledge - Financing College continued. 29

30 Grades 9-12 (continued) Educator Guide Lessons: 13. The Policy of Personal Choice - Understanding the Economy 14. Increasing the Value of Your Money - Financial Markets and Investing 15. Road to Retirement - Retirement Planning 16. Crash Pad - Homeownership and Renting 17. Pocket Giving - Charitable Giving 18. Paving the Future - Estate Planning 19. Financial Sleuth - Financial Resources 20. Protect Yourself - Consumer Protection 21. Launching Your Dream - Entrepreneurship 1: Starting a Business 22. Maintenance Mode - Entrepreneurship 2: Maintaining a Business 30

31 Parent/Caregiver Guide The Parent Guide is organized around themes. Each theme corresponds to one or more classroom lessons and these are identified in the materials. 31

32 Parent & Caregiver Engagement Why Parents and Caregivers? Focus groups Parents and caregivers are pressed for time No family dinners money conversations happen while shopping, if at all Money Smart for Parents and Caregivers 32

33 Download for Free! Teacher Online Resource Center One-stop for FDIC & CFPB resources Videos Shopping Wisely Setting Savings Goals A Field Trip to the Bank

34 Money Smart for Older Adults A single stand-alone module Raises awareness among older adults and their caregivers on how to prevent elder financial exploitation Encourages advance planning and informed financial decision-making Jointly produced by FDIC and CFPB Instructor-Led Training 34

35 Money Smart for Small Business Modules Organizational Types Time Management Financial Management Recordkeeping Banking Services Credit Reporting Risk Management Insurance Tax Planning and Reporting Selling Your Business and Succession Planning Planning for a Healthy Business -- NEW! Is Owning a Business a Good Fit for You? Managing Cash Flow-- NEW! Jointly produced by FDIC and SBA Instructor-Led Training 35

36 Money Smart Alliance Program Alliance members: provide training, such as by teaching classes promote Money Smart support (financially or through staff resources) local organizations that use Money Smart evaluate Money Smart efforts increase delivery and distribution networks New Membership Process 36

37 Money Smart Alliance Website 37

38 Money Smart Changes Behavior Statistically significant improvements 6-12 months after Money Smart in: Unbanked participants opening account Banked consumers selecting a new account (comparison-shopping) Using spending plans (budgets) Paying bills on-time 38

39 Screenshot of CBI 39

40 Money Smart Podcast Network (MP3) Suitable for use with portable audio players or online Grouped into four categories Basics of Banking Checking Accounts Savings/Spending Plan Borrowing Money 40

41 Keep in Mind When Reaching Out to the Unbanked Deposit Insurance Fees Identification Issues Bounced Checks Insufficient Funds Credit History Sensitivities (education vs. literacy) Incentives Assess audience first 41

42 Closing Thank You! For comments and questions 42