Financial Inclusion: New Ways to Expand Access to Banking

HarborOne Bank is proving that financial education really can improve the bottom line.

San Francisco has an Office of Financial Empowerment that oversees all sorts of programs designed to help residents handle their money better and recruits banks and credit unions to participate. As other cities adopt a similar approach, more financial institutions have an opportunity to get involved.

Regulators are right to target overdraft and other fees as obstacles to banks offering affordable checking account options, but that’s just the beginning in developing transactional products that work for consumers.

More than half of all U.S. households have suffered a "financial shock" in the past five years. Some say mobile apps could help users brace for — and recover from — such setbacks.

The Coalition for Safe Loan Alternatives intends to become a peer-to-peer forum for best practices among the alternatives to payday loans. The group will not advocate for policy changes. Rather, it aims to offer a platform for local organizations to share information and compare ways to offer low-cost access to credit.

Inefficient, paper-bound processes, oligopolies that can charge high prices, the Rube Goldberg structure of correspondent banking, and excessive regulation all make it expensive for migrants to send money home. Technology is a big part of the answer.

Bank of America will launch a 3% down payment home loan in partnership with Freddie Mac, but will not retain any risk if the loans default. That’s because B of A will immediately will sell the loans and servicing rights to Self-Help Federal Credit Union, a Durham, N.C., community development lender.

The first protection a consumer needs is the assurance that any new reforms will not inadvertently drive all regulated credit from the market.