Resources to Advance Community Financial Stability

Resources to Advance Community Financial Stability

According to the results of a 2011 Federal Deposit Insurance Corporation survey, more than one in four (28.3 percent) U.S. households are unbanked or underbanked, conducting some or all of their financial transactions outside the mainstream banking system. Without access to affordable financial services, many families are unable to save for the future or build relationships with financial institutions. The survey found that only 67.8 percent of the underbanked had a savings account, compared with 78.4 percent of the "fully banked" population. That opens up an opportunity to help unbanked and underbanked households build assets by establishing a savings vehicle, particularly by using automatic and direct deposits to a separate savings account.

The National Financial Educators Council notes that the practice of financial capability or stability signifies a person's ability to "possess the knowledge on financial matters to confidently take effective action that best fulfills an individual's personal, family and global community goals." New efforts have emerged to help address these needs. Much information, including a growing body of research, best practice analyses, and tool kits, are designed to educate communities and individuals about how to make better use of their financial resources; a list follows.

"Creating Pathways to Financial Security & Opportunity"
The Corporation for Enterprise Development's annual report provides an assessment of asset development programs and strategies for low- and moderate-income households. The report also includes a review of current research and explores best practices from the field. One creative approach highlighted is the "1:1 Fund," which uses a technology platform to match low-income college-bound students with individual donors who match these students' savings dollar for dollar in qualified child savings accounts.

"Every American Financially Empowered"
 The President's Advisory Council on Financial Capability issues this guide designed for educators, communities, and stakeholders that have an interest in collaborating and engaging in effective strategies to increase financial stability for various target groups, including students and workers. The guide begins with a discussion of characteristics and factors that have represented barriers to financial capability and provides a summary of targeted strategies for an individual's various life cycle stages, including K–12; before, during, and after achieving higher education; and opportunities in the workplace. 

"Assets@21: Lessons from the Past, Directions for the Future"
This symposium sponsored by the New America Foundation explores the history and progress of the asset-building movement and is a resource for both academics and practitioners. In addition to providing research and discussion papers, the symposium engaged in guided dialogue that will be used to promote evidence-based practice and future policy development in the field.

"Promising Pathways to Wealth-Building Financial Services"
This forum focused on helping communities and practitioners make informed choices about how to connect to wealth-building services. The Federal Reserve Banks of St. Louis and Kansas City, the U.S. Treasury's Office of Consumer Policy, and the Center for Financial Services Innovation cosponsored the event. Case studies of real-life examples describe promising strategies and feature how financial institutions are succeeding in this field.

The Financial Capability Institute
This online resource, developed by the Center for Financial Services Innovation, helps nonprofits improve the financial lives of their clients with high-quality financial products. The site serves as a one-stop resource for organizations seeking to improve their financial capability approach.

The community and economic development team at the Atlanta Fed is currently exploring consumer credit conditions and trends in the Southeast through a series of listening sessions and surveys. The focus is on how these factors affect a household's financial status. Results will be posted soon.

By Nancy Montoya, senior community and economic development manager at the Atlanta Fed, New Orleans Branch