Because low-income communities lack access to traditional banking services, they are driven to use costly and predatory check-cashing services, payday loans, or pawnshops. Because they live on the edge, they are more likely to be caught owing overdraft fees and other bank charges.
City residents acknowledge a need for more financial help and counseling. In a recent survey by the Philadelphia Federal Credit Union, large majorities of respondents said they were “not very successful” in maintaining a budget or controlling spending and “not very knowledgeable” about personal finance. According to the survey, 37 percent were unable to save “at all” in the past year and 37 percent said they were in “critical need” of improving their financial condition.Strategies
This year, CEO and Financial Empowerment Centers will target programs that combine direct service, public awareness, and advocacy efforts to give Philadelphians more resources to manage their incomes, strengthen their economic security, and reduce their debt. It will expand the network of existing programs for community-based financial education to address consumers’ range of personal financial goals, from debt management and low-cost banking to saving for a home or paying college tuition. CEO will collaborate with credit unions, banks, and other private financial institutions to expand and promote the use of low- or no-cost transaction checking accounts. It will ensure referral to consumer credit counseling services from other public agencies and nonprofit providers, and promote financial tools that incentivize savings. CEO will increase public awareness of predatory lending and check-cashing practices.