One of the highlights of our Income and Asset Development program is the Alameda County Community Asset Network (AC CAN), a collaborative of financial institutions, community based organizations and public agencies working to develop innovative income and asset building strategies, service and policies. AC CAN members recognize that increasing access to appropriate banking products is a key component of protecting the income and establishing savings of low-to-moderate income families, and cost-effective money management tools are a critical first step towards financial self-sufficiency. Unfortunately, Oakland’s financial system is disproportionately made up of payday lenders, fringe banking providers, and large banks that push predatory products on consumers
How much money do Oakland residents lose to predatory products and services?
Bank-On-Oakland estimates that about 30,000 Oakland residents are unbanked and over $35 million per year is spent at check cashers and payday lenders. To really understand the impact of payday loans on a neighborhood, consider that if in one year, 10% of West Oakland residents (2,000 people) borrow $500 using a Payday Loan, and it costs them $675 in interest, then $1.3 million has been drained from that one neighborhood. This reality fuels the cycle of poverty in our city.
What is AC CAN doing to solve the problem?
In partnership with the Alameda County Public Health Department and our members, AC CAN developed the Savvy Consumer Toolkit, an innovative financial education curriculum that uses popular education methods to raise awareness about predatory financial products and services and help consumers avoid them by deconstructing marketing and messaging strategies used in the financial industry. The Toolkit also connects people to the most appropriate, low cost banking product for their needs, and a local income and asset building service provider who can work alongside them to create a long term plan towards financial self-sufficiency.
The Toolkit includes a facilitator manual, participant guide, and tools that help people answer questions like: What are predatory products? What should I watch out for? What are the real costs?
- Check Cashing,
- Payday Lending,
- Refund Anticipation Loans and Checks,
- Car Financing,
- Car Title Loans,
- Prepaid Debit Cards, and
- Credit Cards.