Gateway City workshop spotlights asset-building as key growth strategy
Leaders from Gateway Cities, state agencies, and financial institutions assembled in Worcester on June 22nd to learn about innovative new opportunities to connect low-income families with wealth-building financial services.
The forum was a byproduct of a MassINC policy brief released last April. The paper described the toll reliance on high-cost financial services exacts on Gateway City families, along with the drag these patterns place on Gateway City economies in the aggregate. With support from the FDIC, MassINC and the Midas Collaborative co-hosted the half-day workshop to examine solutions to this challenge.
The morning began with a keynote address from Undersecretary Tina Brooks, co-chair of the state’s asset development commission, which succinctly framed the problem: “When one still feels the need to use a check cashing store in place of a legitimate bank, or to rent household furnishings or to borrow against an anticipated tax refund, it … weakens that person financially and it weakens the community.” Undersecretary Brooks voiced the administration’s commitment to promoting asset-building in Gateway Cities and encouraged the group to find innovative ways to make gains in their communities.
With that call to order, Midas Collaborative director Margaret Miley opened the first panel, which focused on efforts to protect families from predatory financial services. Miley noted the large gap between the income earned by many Gateway City families and basic household expenses. Stretched budgets push families toward financial products to fill short-term holes. This inevitably makes the long-term gap larger, leading to a hard to escape cycle of poverty.
David Floreen with the Massachusetts Banker’s Association described how the work of the state’s Financial Education Collaborative, which is focused on passing a legislative mandate for a financial education curriculum component, would help Gateway City residents better understand the true costs of these fringe financial products.
While the school setting presents one opportunity to reach families, Doreen Treacy spoke about her work at the DotWell Civic Health Institute to demonstrate the value in thinking creatively about alternative outreach possibilities. Her community health centers see financial stability as critical to public health. While clinical staff may at first feel uncomfortable discussing financial issues with patients, Treacy believes success in Dorchester shows that Gateway City community health centers can play a prominent role connecting families to lower-cost financial products.
Leo McNeil brought lessons learned from HarborOne Multicultural Banking Center in Brockton, an effort that has quickly become a model, attracting national and even international attention. Sandra Clarke closed out the first panel’s rich discussion, describing a number of efforts underway at the Department of Consumer Affairs, including Project Credit Smarts.
After a short break, the work resumed with Panel II, which focused on innovative products that give Gateway Cities new opportunities to connect families to low-cost financial services. Ben Forman, MassINC’s research director, related how in preparing the policy brief he was struck by all the creative models both public and private sector organizations were producing, and the need to ensure Gateway Cities capture the benefits of these innovations.
With just 40 minutes remaining, the panelists were pressed to quickly summarize all of these advances:
Bonnie Doolin described a number of innovative programs by credit unions, including efforts to bring prize-linked savings to Massachusetts; Kathy Tullberg talked about the Massachusetts Community & Banking Council’s success with Basic Banking for Massachusetts, and how Gateway Cities can partner with banks in their communities to expand access to these low-cost accounts.
Next, participants heard about how this work unfolds on the frontlines in a Gateway City. Jessica Andors presented the different approaches Lawrence Community Works has experimented with to promote asset building, including the Welcome Home IDA program.To close out the panel presentation, Tim DeLessio described the FDIC’s many impressive efforts, including the work of the Alliance for Economic Inclusion and the recently completed Small-Dollar Loan Pilot program.
The group took a quick break for lunch, and then all 8 panelists responded to questions from the audience. The Q&A turned into a lively conversation, demonstrating a wealth of energy and ideas about how to make access to low-cost financial services and asset-building a powerful force for growth and renewal in Gateway Cities across the state.