Month: August 2014

SPUR of the moment

SPUR_Urban_CenterIt’s mid afternoon on an exceptionally warm summer day in San Francisco as people begin to file into a sun-drenched room at SPUR’s offices on Mission and 2nd Street waiting to hear about creating a new path to financial empowerment. Unlike the usual groups of people (banks, tech companies, nonprofits, asset-builders) who usually come to hear Jose talk about MAF, all of the people in this room are urban planners.

These are the people who work to make the city’s streets navigable, the buildings impressive and unobtrusive, the parks green and inviting, and the traffic flowing smoothly. So why would urban planners – people who are interested in the tangible aspects of city planning –  be interested in financial empowerment? Simply put, a strong vibrant city needs an economically empowered base.

A city is like a living organism; when its residents get stronger, the entire city gets stronger.

Jose started with talking about how important economic empowerment is for creating a sustainable urban environment. It’s not an argument we often talk about because we’re usually in a different sort of crowd. So we weren’t entirely sure how this would go over, but to our surprise the crowd was in full agreement.

We used this opportunity to dig deeper into the meaning of financial empowerment and its immediate impacts upon communities and cities. We talked about innovative approaches to creating financially empowered communities that no longer have to resort to subsisting on payday loans and other high cost debt.

One of the SPUR members asked, “I’d love to see an effort made to make credit unions feel more accessible… by emulating Check Cashing stores.” Jose replied, “ While on the surface that may seem like a constructive idea, to create a familiar space for individuals. Emulating pay day lenders would encourage and reinforce the cycle of debt as well as the subsistence patterns that we are trying to move people away from.”

photo 4 (5)By emulating a pay day lender, we are not modeling positive financial behaviors. We want to move people from those groups towards lower cost, mainstream financial services.

It was at this point the crowd fully understood what MAF was about. When we meet people where they are, we recognize the financial aptitude of our members as well as how they navigate the financial pain points of their lives.

We see the financial savviness they have developed and we use it to transform them. For us, neither subsistence nor replacement is the goal. We don’t want to replace a broken system with another system. We want to move our members to a functional and formalized pattern of saving, investing, and credit building.

Economic planning goes hand-in-hand with the financial stability of an entire city. That’s just as important as creating bike lanes that are wide enough or buildings that are up to code. It’s about taking a longer view of sustainability of a city, its culture, and the quality of life for everyone. Urban planning does not end with the sidewalk; it begins with the people who use that sidewalk.

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CFSI_MAF-82 For as long as Leonor Garcia can recall, the driving force in her life was to support her community. Even when she was a little girl in El Salvador, Leonor says she always had a keen sense for business, but would use her savviness to help the people around her.

She grew up on a sprawling tobacco farm which her father and mother were in charge of. On the side, her mother owned a small shop that sold food, beverages and other items for the men working in the field. Leonor would spend all of her time tagging along with her father as he inspected the fields, managed the workers, and tended to the crops. When the growing season had ended, she would go with her mother and watch her negotiate sales prices and contracts with various companies and stores that wanted to purchase the tobacco.

Leonor learned a great deal about business and the relationship between products and money, but she also learned that working for the community yields the greatest rewards. photo (3)

Leonor went on to become a teacher in a local school. For her, teaching children was a dream job. She worked her way up to become the headmaster of the school. During this time, Leonor kept her dream of entrepreneurship alive by owning and running a highly successful grocery store. After she retired from teaching, she decided that it was also time to sell the store. Leonor needed a new adventure and she knew just where to find it. She knew that in the US she would have more opportunities and more freedoms to grow a business.

After moving to the US in 2001, Leonor wanted to start her new business immediately, but she was blocked. Whenever she went for a loan, she was denied because she had no credit. For Leonor, that was a slap in the face. She had run a highly successful business in El Salvador while running a school. She also grew up watching and learning everything she could from her parents.

Leonor wouldn’t give up, but she needed a reliable way of getting money and building her credit. That’s when she found out about Mission Asset Fund through one of her friends. She was able to get a micro loan and build up her credit for future investment. The loan helped her purchase a generator, display shelves and other medical equipment to open up her business, Leonor’s Nature Sunshine.

Leonor’s Nature Sunshine is a business built upon Leonor’s desire to help people live healthier lives.

She provides the latest natural health products, supplements, diagnostic tests and homeopathic remedies for people’s needs. A few minutes in her chair and Leonor will know exactly what ails you and how to fix it! Leonor believes in finding affordable products that treat the root of the problem and the whole system. Her most popular products are for digestion, chlorophyll and probiotics.

Leonor’s store used to be located in a flea market in Richmond, but after her surgery, she moved it to the comfort of her home which was also more private and confidential for clients. She is so client-centered that if they can’t pay her upfront, clients are able to pay her in installments for their purchases. Leonor has become so popular that people come to her house daily to have a meeting with her.1654167_353648834774570_84862585_n

After she appeared on local TV last year, Leonor said she was inundated with calls as soon as the interview was over.

“People said ‘it’s such a blessing to have your phone number!’,” she recalls with a laugh.

Through her successful business Leonor has been able to focus on healing her community and she’s got big dreams for her future. “ I want to have more capacity and more recognition to help people have a satisfied, healthy life,” she says. Leonor also wants to challenge herself new trends in her field, attend conferences and become savvier with social media. She hopes to improve her economic status and begin training others as health promoters.

Right now, Leonor is training her husband, a welder, to work with her in the business. Her interest in nonprofits motivated her to be an ambassador and funder for A New America’s first entrepreneurship class as well as donate funds and time to various nonprofits around the Bay Area. She says that without MAF, none of this could have ever happened and she is thankful every day that she has been given this amazing opportunity to be Mother Nature in her community.

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In June of 2013, we started laying the groundwork for a piece of legislation that would change the way the state of California thinks about credit-building. Just last week, Governor Jerry Brown signed our bill, SB 896, into law. This is momentous for Mission Asset Fund, but an even bigger moment for the asset-building field. Nonprofit organizations and advocates throughout the state joined SF Treasurer Jose Cisneros and CA Controller John Chiang in support of the bill early on. The bill received unanimous bipartisan support throughout the legislative process, receiving zero votes in opposition.

The passage of SB 896 makes California the first state to regulate and recognize credit-building as a vehicle for good. With this law, credit-building becomes the next frontier for asset-based policy.

Our nation has a long history of legislating policies that help low-income families build assets – from home ownership and investment tax benefits to Individual Retirement Accounts (IRAs) and Individual Development Account (IDA). But until now, credit-building has been largely missing from the discourse around poverty alleviation.

Courtesy: New America Foundation
Courtesy: New America Foundation

What the 90’s taught us about the need to accumulate savings among low-income households was important; liquid savings is now widely understood to be one of many indicators of the financial resilience of a hardworking family. But when we started Mission Asset Fund, we quickly understood that it would take more than savings to build financial capability in the long run. During the 2007-2009 recession, in a time when mortgages went underwater and personal debt for the lowest income Americans soared, our nation learned even more about credit and debt. 64 million Americans don’t have credit scores right now. That means they don’t have equitable access to things like low-cost bank accounts or prime-rate loans. In fact, many of them can’t even qualify for IDAs, affordable apartments or sometimes even jobs. Their choices are limited to fringe and predatory financial services that entrap them in a cycle of high cost debt.

That’s why our vision was to create a new law that – for the first time – would establish and regulate innovative credit-building approaches so that nonprofits in California could band together to change the financial marketplace for the better. Key elements of SB 896 include:

  • The State of California declares that nonprofit organizations have an important role to play in helping individuals obtain access to affordable, credit-building loans
  • A licensing exemption within the California Finance Lenders Law (CFLL) for 501c3 nonprofits facilitating zero-interest loans of up to $2,500
  • Nonprofit organizations will be able to apply for exemption to provide zero-interest loans, as long as they meet other criteria like provide credit education, report to national credit agencies, open books to the Department of Business Oversight upon request, and annually report lending data to the DBO
  • Recognition of partnerships between nonprofits as an effective strategic way to scale reach and impact throughout the state

SB896 provides regulatory assurance to programs like MAF’s Lending Circles, a social loan program which has provided over $3 million in zero-interest loans to clients nationwide. We are extremely grateful that Governor Brown recognized the enormous potential of the nonprofit sector in helping millions of underserved Californians realize their true economic potential. The enactment of SB896 means that more nonprofits will work with low-income Californians by providing them access to responsible loans, loans that will set them up for success and set them on a path to financial security.

Senator Correa (CA)

California is now the first state to recognize credit-building loans as an important community-based solution to creating access for the underbanked.

 

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UCSF_Medical_Center_and_Sutro_Tower_in_2008 It was near the end of high school when Jirayut “New” Latthivongskorn realized that he wanted to make an impact on the American healthcare field. His mother was rushed to the hospital in Sacramento after fainting and losing significant blood. They soon discovered that she had several tumors to take care of. New’s parents were recent immigrants from Thailand and didn’t speak English. His older siblings were busy with work, so New had to help his family navigate a complex healthcare system from translating at doctor visits, taking care of his mother, and handling insurance matters.

“It was the beginning for me to think about what I could have done in the situation, like if I was a doctor or healthcare provider,” he said.

New’s parents had given up so much after economic and social burdens pushed them to move to California from Thailand when New was nine years old. His parents worked long hours at restaurants as waiters and cooks in order to make ends meet. Their drive motivated New at a young age to excel academically and master the English language so he could achieve the American Dream. But because New was undocumented, there were still countless obstacles awaiting him on that journey.

New PhotoNew applied to a variety of University of California schools and was accepted into UC Davis with the Regents Scholarship that would have covered most of tuition costs. Right before the school year would have started, the scholarship offer was rescinded because he was missing an important document in his paperwork: a green card.

Growing up, New had experienced fear of friends and the greater community finding out about his status, but this was different. “That was my first time coming up against an institutional barrier,” he said. New was prepared to go to community college instead but his family came together to support one year at UC Berkeley.

After that, he would have to find the funds to continue on his own. “In my second year of college, I started getting desperate,” he said Luckily, in 2010, he received a scholarship from Educators for Fair Consideration (E4FC), nonprofit that supports low-income immigrant students in their pursuit of a U.S. college education. That was a gateway for New to becoming active in organizing for immigrant rights.

Getting involved with groups like the E4FC, ASPIRE, and groups on the UC Berkeley campus opened up New’s eyes to a community of undocumented students who were facing the same struggles. As he neared his graduation from Berkeley, New refocused his goal to going into the medical field but he still had so many questions as an undocumented person. “Is it even possible to go to med school? Where would I apply? How would talking about my immigration status affect my chances?” New said, remembering the confusion he felt.

“We didn’t know anyone who had gotten in to med school as undocumented but people said they had heard of someone who had heard of someone…It was like trying to find a unicorn.”

To solve that lack of structure and support, New co-founded Pre-Health Dreamers with two colleagues from E4FC, a group that two years later is growing across the country to empower undocumented students in their pursuit of graduate and health professional studies. After graduation, New interned at organizations relating to healthcare access and policy, which caused him to become interested in public health alongside the practice of medicine. “My parents and friends are undocumented and when they get sick, they don’t have access which is ridiculous.

I want to change that.” Shortly after DACA passed, New heard about Lending Circles and other programs that helped finance the cost of the application. He had already applied for DACA but he was interested in learning about credit-building. Now that he and his friends had SSN numbers, joining the Lending Circles could help them get started on a path of financial stability. New used his loan to build credit and pay for his medical school applications. “It has been very helpful. Now I have good credit and learned a lot after going through the financial trainings at MAF about managing money,” he said. All of New’s hard work paid off because he is now the first undocumented medical student accepted to UCSF School of Medicine.

With one week away, he is anticipating the start of an exciting journey and passing the Pre-Health Dreamers torch to the next generation of leaders. His main piece of advice for other undocumented youth is to speak up and seek help. “I got here because I had organizations that helped me come to term with what it meant to be undocumented,” he said. “As an Asian, undocumented youth, the fear was so much more pronounced. I know what it’s like to have silence define my life and my family’s.” New believes in finding mentors and advocate to help find opportunities. Perseverance is also key for him when making decisions.

“There is so much uncertainty but never take no for an answer. You don’t know until you try. I am living proof of that. If I hadn’t tried, I would not have had the opportunities I have had–I would not be here today.”

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photo 2 (8)Mission Asset Fund is thrilled to announce that as of this morning, after more than a year of movement through the California legislative process, we are a single pen stroke away from SB896 becoming law.

MAF was sent notification that SB896 has moved through the engrossment process and is now on it’s way to Governor Brown’s desk to receive final approval!

We want to thank everyone who has been involved in this long, intricate process. Through your support, we are only one signature away from creating a new and better lending space for hardworking families that supports sustainable scaling and collaboration between micro-lenders statewide.

Now we need to make sure that SB896 gets signed! We sent a letter to Governor Brown yesterday afternoon to ask him to finalize this legislation. Read the letter below.

 


 

August 4, 2014
The Honorable Edmund G. Brown, Jr.
Governor, State of California
 

RE: SB896 (Correa)

Dear Governor Brown,

On behalf of Mission Asset Fund, we respectfully request that you remove unnecessary barriers to the financial mainstream by signing SB896 into law.

SB896 has overwhelming support from public leaders, nonprofit organizations and policy advocates across the state for its potential to create new opportunities for culturally relevant financial products and services to help low-income Californians realize their true economic potential.

Close to 1 million California families are in the financial shadows without access to the most basic mainstream financial products like checking or savings accounts. According to CFED, 57% of California consumers have subprime credit scores, making loans more costly and inaccessible to low-income families. Indeed, millions of Californians are forced to subsist on the financial fringes, struggling to access responsible financial tools to build their financial security.

SB896 would set a major precedent by recognizing and legitimizing the work in small-dollar lending and credit building fields. The bill will establish a licensing exemption within the California Finance Lenders Law (CFLL) for nonprofit organizations like MAF that facilitating zero-interest loans and provide financial education.

In the past 6 years, MAF has facilitated over $3.0 million in social loans through the tested and proven Lending Circles Program, allowing thousands of clients to improve their credit scores and to have access low-cost loans. MAF serves clients directly in the San Francisco Bay Area and indirectly through partnerships with other nonprofit organizations statewide.

The enactment of SB896 will encourage more nonprofits to help financially underserved Californians. The bill will recognize efforts by nonprofits to network and collaborate together to lower the cost burdens of providing lending services in their own communities.

SB896 has gained widespread support from the following public leaders, organizations, and advocates:

Asian Law Alliance
CA State Controller, John Chiang
California Association for Micro Enterprise Opportunity
Californians for Shared Prosperity Coalition
Calexico Community Action Council, Inc.
Center for Asset Building Opportunities
Centro Latino for Literacy
CFED
EARN
Family Independence Initiative
National Council of La Raza
Office of the Treasurer & Tax Collector City & County of San Francisco
Opportunity Fund
Pilipino Workers Center of Southern California
Progreso Financiero
Salaami Firm
San Francisco City Supervisor, David Campos
The Greenlining Institute
Watts / Century Latino Organization

We are grateful for your leadership on this critical issue. SB 896 is a strong step forward in helping millions of Californians living in the financial shadows become visible and successful consumers.

Sincerely,
Jose Quinonez, CEO

 

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MissionViewFounding_SliderFINAL-1024x512 It was a chilly July evening in the MAF office in San Francisco; a gentle wind carried the pleasant smells and sounds of the vibrant Mission District through the streets. Inside the brightly lit MAF office, Doris and Ximena were working to set up the room for one of our Lending Circle formations. In San Francisco the lights of the city were just starting to blink on, as families returned home; half a world away in Guatemala, families were returning to piles of rubble and ash that used to be their homes after a rather violent earthquake.

Emergencies have a tendency to strike when you aren’t expecting or ready for them, but with the support of a strong community even the biggest emergency is easier to deal with. photo 3 (3)Doris and Ximena welcomed guests to the formation that evening. There were many new and familiar faces in the room. The air filled with conversation, anticipation and a sense of apprehensive hope. For many people in the room, they had been promised miracle fixes and unbelievable opportunities to help them gain a stable financial foothold.

A lady in a neatly pressed, green blouse talked excitedly to the man in the white t-shirt next to her about how she was here to build her credit, and then use the money to help pay for a car. Two women across the room were giggling and chatting about their day like two old friends, even though these ladies had only been introduced to each other 20 minutes prior.

One woman sat in the front of the room, her red t-shirt picked up her rosy cheeks and sparkling eyes, a huge smile across her face.

She talked with the people around her, but chose to only say that she needed the money to help out her. The man in the white t-shirt said he too was there for his family. He was building his credit back up after his business had to close. Ximena and Doris quieted the room and began talking to the members about the formation process and how being a member of a Lending Circle worked. As they talked about the details of the process, the new people were busy taking notes, and the returning members were letting them know which pieces of information were of specific importance to their success in the Lending Circle program.

At the end of the informational session, Doris then asked the group what their needs were and how much money they were looking to get.

photo 2 (7)One voice said she needed to build savings and credit to buy a car at a good rate. Another person said he wanted to buy some new equipment for their business. Half the group requested a $2,000 loan, while the other half only needed a $1,000. When Ximena got to the woman in the red shirt, the woman stood up and looked at the members. She took a deep breath, her smile still soft and inviting on her face. She then told the group how she needed to get this money for her family in Guatemala. Recently, there was a terrible earthquake and her mother had been trapped inside the rubble that was once her home. Her mother had been rescued and was now safe and recovering from surgery, but once she recovers, she will have no home to go back to.

The woman in red talked about how when she was without a home, MAF had helped her find and pay for a safe, stable place for her and her two young children.

Now that same community was going to be able to give her mother a place to live after her emergency. She was grateful to know that there was always a place for her to come when she needed something, and she appreciated that there was always a community there to support her and her family. photo 2 (6)Doris and Ximena then disbanded the group for dinner, so that they could talk amongst themselves about what the loan payments would be and other terms of the loan. The returning members spoke to the new members, giving them tips on how to best use the Lending Circle. By the time dinner came to an end, everyone’s group had come to consensus about what their Lending Circle would look like. The $1,000 group came up and talked about what order people were going to be receiving the loans. They talked about the payments, and they also talked about how excited they were to start. When the $2,000 group stood up to talk, they had come to a decision as well.

After hearing about why the woman in red needed the money, they decided that she should be the first one to get it. She needed it far more urgently than anyone else in the group.

Once the meeting concluded, everyone started to file out of the MAF office into the crisp summer evening, all chatting and smiling. When you join a Lending Circle you aren’t JUST getting a loan, you are becoming part of a community that looks out for one another. A community is there for you whether you are looking to buy a car, build your credit, or get support when an emergency hits.

 

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