World We Dare to Imagine Part 3: Equal Access to Financial Services Foundation

 Nearly one in ten Americans lack access to a standard checking account, and nearly one in five rely on predatory payday lenders to make ends meet (The Atlantic). America’s poor lacks fair access to the rich banking infrastructure that the rest of the country leans on. This notion of financial inclusion is a popular talking point for addressing world issues, but is less talked about domestically.

The lack of banking access in developing nations has long been a passion project for startups, aid organizations, and financiers looking to give back...But within the confines of an already developed banking system, the millions of Americans suffering from lack of access have been harder to see, and to reach. (The Atlantic).

Payday loans pray on the poor. The average interest rate on an average payday loan is 391 percent (St. Louis Fed). Compare this to the average credit card interest rate, at around 17 percent, and the average personal loan, which is about 10 percent, and it is easy to see that the poor have a much higher price to pay for access to loans. Furthermore, payday lenders are known for being ruthless and deceptive with their practices, intentionally tricking people into making mistakes and driving people into long term debt.

Enter the Equal Access to Financial Services Foundation, centered on financial instruments and literacy for the poor. Through donations, we want to be able to provide small personal loans to impoverished Americans without charging the same sky high interest rates that payday lenders charge. Furthermore, as part of our program, we want to help the poor setup their own bank accounts and ensure that they have access to similar banking services that everyone else across America gets to enjoy.

Crony capitalism that pushes the poor out of the markets is ruining faith with market economies. We need to ensure that our markets work in favor of everyone in this country. Our economy is only sustainable if our financial services are sustainable for everyone. Predatory practices are pushing people away, and are not conducive to a system that makes everyone better off.

Let’s make our markets work for everyone. Donating to the Equal Access to Financial Services Foundation is an investment into the future of America’s economy.

Sources:

https://www.theatlantic.com/business/archive/2016/11/americas-underbanked/509138/

https://www.stlouisfed.org/open-vault/2019/july/how-payday-loans-work