Month: January 2016

Detroit Skyline MAF

 

Southwest Solutions, JPMorgan Chase & Co. and Mission Asset Fund (MAF) today announced the launch of Lending Circles, a new social loan program that will allow Detroit residents to safely build credit through zero-interest loans. Participants make monthly loan payments and take turns receiving zero-interest social loans, ranging from $300 to $2,500. All loan payments are reported to credit bureaus, enabling participants to build a credit history, raise credit scores and work towards greater financial stability.

MAF’s award-winning Lending Circles are a fresh take on social lending, helping participants build credit while increasing assets and improving financial health. The average credit score increase for participants is 168 points. “More than 30% of the people we’ve assisted with their financial situation in the last two years start with no credit history, and those with credit start with an average credit score of only 547,” said Hector Hernandez, executive director of Southwest Economic Solutions. “Lending Circles will enable our clients to build and enhance their credit so they can take advantage of opportunities to become homeowners, entrepreneurs and college graduates.”

Bringing Lending Circles to Detroit is the next step in JPMorgan Chase’s $ 100 million commitment to Detroit’s economic recovery. JPMorgan Chase recently awarded MAF a $1.5 million, three-year grant to expand Lending Circles to even more communities across the country and develop new technology to connect clients with on-demand loan information. Southwest Solutions is part of a growing network of 53 Lending Circles providers – and the first in the state of Michigan.

“We are proud to partner with Southwest Solutions and Mission Asset Fund to expand Lending Circles to Detroit,” said Colleen Briggs, Program Officer, Financial Capability Initiatives, JPMorgan Chase. “Building a solid credit score is the critical first step to managing daily financial lives and accessing affordable capital to achieve long-term financial goals, such as purchasing a home or starting a business.”

Of the 27 zip codes in the City of Detroit, the median credit score among residents is below 600 in all but one, according to Urban Institute tabulations of credit bureau data. Furthermore, a 2015 report from the Consumer Financial Protection Bureau reported that one in four Detroit households are “underbanked.” Without sufficient access to checking or savings accounts, Detroit residents often turn to payday lenders and check cashers to meet their basic financial needs.

“Without credit scores, there are no ‘good options’ when you want to start a business or get a small loan,” said Jose A. Quinonez, CEO, MAF. “Now, with the support of JPMorgan Chase and partners like Southwest Solutions, we are working together to provide innovative solutions to help Detroit residents succeed.”


About Southwest Solutions

Southwest Solutions Detroit Lending CirclesFor more than 40 years, Southwest Solutions has pursued its mission to help build a stronger and healthier community in southwest Detroit and beyond. The nonprofit organization provides more 50 programs and partnerships in the areas of human development, economic development and resident engagement. These three areas together form a comprehensive neighborhood revitalization effort that helps more than 20,000 a year. For more information, please visit www.swsol.org.

 

 


About JPMorgan Chase & Co.

JPMorgan Chase LogoJPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.4 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, and asset management. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world’s most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. The firm uses its global resources, expertise, insights and scale to address some of the most urgent challenges facing communities around the world including the need for increased economic opportunity. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.

 

About Mission Asset Fund

MAF Blog LogoMission Asset Fund (MAF) is a San Francisco-based nonprofit dedicated to helping financially excluded communities – namely, low-income and immigrant families – gain access to mainstream financial services. Learn more at missionassetfund.org and lendingcircles.org.

Tags: , , , , ,

Relationship Credit MAF

 

This blog was originally published on CFED’s “Inclusive Economy” blog as part of the Assets & Opportunity National Week of Action.

We all love the excitement of getting a notification that someone is interested in you after looking at your dating profile. You quickly check theirs, see where they live, what interests they have, what their pictures say about them.

But what if you could see their credit score, too?

So many relationships are fraught with money troubles, so it’s understandable to want to know whether your potential partner is sound financially. Dating sites are good at determining compatibility based on self-reported measures, but using a seemingly objective indicator like credit score seems like it would help make better matches–and potentially help love birds avoid some serious financial problems down the road.

What about folks who don’t have any credit history at all?

There are an estimated 26 million people in the United States who are “credit invisible”, meaning there is not enough information in the borrower’s profile to generate a credit report or a credit score. Blacks and Hispanics are more likely than whites or Asian Americans to be credit invisible or to have unscored credit records. Millions more have “subprime” credit, meaning that they have less-than-ideal credit profiles or scores.Family Credit MAF

There was a woman who dropped by one Friday afternoon at Mission Asset Fund (MAF), the nonprofit where I work. She asked if she would be able to get money so that she could take her son out to dinner that night for his birthday. Unfortunately, MAF’s social loan program does not provide the immediacy of funds that she needed.

So where does someone like her go?

If she does not have credit and is unable to borrow from friends and family, her only option may be to go to a payday lender that can offer her money that same day as an advance on her regular earnings with an employer. Even though payday lenders are known to charge exorbitant interest rates and fees, the trade-off may seem worth it to her in order to have a celebratory meal with her family.

I saw so many people make this same decision at the payday loan shop that my mom managed in Indiana. The challenge was that, once someone took out a payday loan, it became very difficult for them to get rid of it.

What seemed like a short-term loan ballooned into a long-term commitment.

While in high school, I came back from California to visit my mom every six months, and I would see the same customers every year, again and again. They would even get my mom gifts for Christmas. The payday lender soon became the lender of choice and at times the only lender, a place where customers felt listened to and understood, but which did little to break them out of a credit-and-debt cycle so that they could truly build assets.

Many state laws protect consumers against predatory lenders, but borrowers can still access these loans online if they are not available in their neighborhood. New York has warned online lenders about its interest rates caps and rules against title lending, while other states like California have seen operations move out of state to tribal reservations in order to thwart regulations and continue business. Laws are not enough to protect consumers from accessing bad loans, as people will always need access to capital.

One of the barriers to strong consumer protection is the way our country goes about credit.

Edgar and Gustavo Relationship CreditIt is not intuitive that a person may be dinged on their credit report for failing to pay an electricity or cable bill, while at the same time being unable to benefit from making regular on-time payments for such services–even though these often require a credit check or a sizable deposit. Increasingly, credit has become so important that it can impact where you work and even where you live.

From finding your next great relationship to paying for a special night out, having good credit is important. My immigrant father who came to the United States from India repeatedly told me to avoid credit cards as a young adult so I would avoid the same mistakes he made. He added me as an authorized user to his AMEX charge card so I could build a credit history early on without taking on debt.

I encourage you to start similar conversations with your family members and friends about credit too.

You may even want to connect with one of the organizations in the A&O Network to help you realize larger financial goals. You, your relationship and your credit profile deserve to be powerful.

Tags: , , , ,

MISSION ASSET FUND IS A 501C3 ORGANIZATION

TERMS OF USE   |   PRIVACY   |   CONTACT

Copyright © 2018 Mission Asset Fund. All Rights Reserved.