In Opening Mobility Pathways by Closing the Financial Services Gapan idea paper co-authored by Bill Bynum, CEO of Hope Enterprise Corporation (Hope); Ed Sivak, executive vice president of policy and communications, Hope; and Diana Elliot, senior research association at the Urban Insitute—a proposal is put forward to test whether a coordinated regional strategy can reverse a legacy of segregation, disinvestment, and exclusion. The paper was published by the US Partnership on Mobility from Poverty, and includes ideas about creating greater access to banks and mainstream financial services. 

"Greater access to banks and mainstream financial services can improve the economic mobility of low-income families and communities. We propose four ideas that capitalize on the nation’s existing financial service infrastructure and, where necessary, create new tools.

1. Triple bank lending, services, and investment in underserved markets. The federal Community Reinvestment Act could help more communities by emphasizing service, lending, and investments in places where banks generate revenue—not only where they have physical branches.

2. Strengthen community development financial institutions (CDFIs). CDFIs play a vital role in the nation’s financial system by ensuring that services such as deposit accounts, mortgages, small business loans, and financing for community facilities are accessible to underserved people and places. 

3. Establish universal basic accounts for all Americans. Require or encourage all financial institutions that receive federal deposit insurance to offer all customers a universal basic account—a free account that is simple, transparent, and does not charge overdraft or other hidden fees.

4. Cultivate a fair and responsible marketplace for all Americans. Financial service providers must be leaders in ensuring that consumers are protected from abusive financial practices that strip wealth and limit economic mobility."

The Urban Institute, with funding from the Bill and Melinda Gates Foundation, is supporting the US Partnership on Mobility from Poverty. The collective ambition is "that all people achieve a reasonable standard of living with the dignity that comes from having power over their lives and being engaged in and valued by their community."

Read the full idea paper here


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