Supporting Returning Citizens in Entrepreneurship and Credit … · 2019-05-15 · §Prison Entrepreneurship Program §Rising Foundation This toolkit was developed with generous funding

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© 2019 Credit Builders Alliance, Inc. Some rights reserved

Maria SennettManager of Training & Program Development

Credit Builders Alliance


© 2019 Credit Builders Alliance, Inc. Some rights reserved. CREDIT BUILDERS ALLIANCE and the accompanying Logo are trademarks of Credit Builders Alliance, Inc. This document is licensed under a Creative Commons Attribution-Noncommercial-Share Alike License (US/v.3.0).

Noncommercial uses are permitted on the condition that you include an attribution to Credit Builders Alliance. If you alter, transform, or build upon this work, you may distribute the resulting work only under the same or similar license to this one. Moreinformation regarding the license is at: http://creativecommons.org/licenses/by-nc-sa/3.0/ . Requests for permissions beyond the scope of the license should be directed to Credit Builders Alliance, Inc., at www.creditbuildersalliance.org/. Credit Builders Alliance ("CBA"), a not-for-profit organization, makes this information available for informational purposes only. This information is not intended as legal, financial, or other advice, and you and your clients should consult qualified advisors before making any decisions. CBA does not represent that any of the information will produce results.

Supporting Returning Citizens in Entrepreneurship and

Credit Building

2019 Personal Finance Seminar for Professionals 5.16.2019


About Credit Builders Alliance

http://creativecommons.org/licenses/by-nc-sa/3.0/

http://www.creditbuildersalliance.org/

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CBA Credit Builder Community


CBA Platform Services•Report option from TransUnion, Experian,

LexisNexis, Nova Credit, and ChexSystems•Reports used for financial coaching/

counseling and loan underwritingCBA Access

•Report loan data to consumer bureaus (CBA Reporter)

•Report loan data to commercial bureaus (CBA Business Reporter)

CBA Reporter

•Credit as an Asset signature training•Customized credit building and rent reporting

program and product design

CBA Training & ConsultingTo learn more about CBA services, please visit: www.creditbuildersalliance.org


Credit Catch 22Opening and successfully managing

financial products is key to building and maintaining a good credit history

BUT…

Individuals, families and communities with no, thin or poor traditional credit

histories have few opportunities to build good credit

http://www.creditbuildersalliance.org/

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Credit Realities Among U.S. Consumers

Approximately 45.4 million Americans (almost 20 percent of the population) have “unscored” credit records or are “credit invisible”

SOURCE: CFPB


Credit: Andrea Levere, Prosperity Now

Good “Credit”: Passport to the New Economy


n Financial productsn Rental housing n Utilities n Cell phone plans n Insurance productsn Asset buildingn Employment

Why Credit Building?

Increases Access, Affordability, and Options for…

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The Role of Credit Building

Credit Building as a strategy

Establishing and maintaining ACTIVE paid on-time trade lines (installment or revolving) that are reported to the major credit bureaus

Focus on behavior now to create opportunities for the future


Fair credit(near-prime)


The Role of Credit Building

in Reentry


The Problem

§70 to 100 million Americans (or 1 in 3 Americans) has a criminal record§Over 65,000 are released annually§A disproportionate number of minorities are incarcerated §1 in 17: white§1 in 3: black§1 in 5: Latino

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The Challenges

§Employment is a barrier§Access to capital is a challenge§Debt is of essence§Credit is limited, if even in existence§Opportunities are limited§Entrepreneurship as a strength


Credit Challenges Faced by Returning Citizens

§Credit inactivity and misuse§ Identity theft§Child support and/or pre-

incarceration debt§ Fines and fees§ Legal issues§ Employment and housing

barriers

§ Lack of trust in institutions§No financial institution

account§ Lack of ID§No permanent address§Derogatory banking history

(ChexSystems) § Etc.


Credit Challenges Faced by Returning Citizens

§Credit inactivity and misuse§ Identity theft§Child support and/or pre-

incarceration debt§ Fines and fees§ Legal issues§ Employment and housing

barriers

§ Lack of trust in institutions§No financial institution

account§ Lack of ID§No permanent address§Derogatory banking history

(ChexSystems) § Etc.

Top debts:

Medical collectionsTelecom billsChild support

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Introducing CBA’s Achieving Credit Strength Toolkit

Accessible at: bit.ly/CBA_Returning_Citizens


Acknowledgements

§ Defy Ventures§ The Fountain Fund§ Goodwill Industries of Central IN§ Guidewell Financial Solutions§ Justine PETERSEN§ Mercy Corps NW§ Mon Valley Initiative§ Prison Entrepreneurship Program§ Rising Foundation

This toolkit was developed with generous funding from the Small Business Association’s PRIME Program. CBA thanks our many contributors, including:

§ Rising Tide Inc.§ Sunshine Enterprises§ CitySquare§ The Financial Clinic§ Goodwill Industries of Sacramento

Valley & Northern Nevada, Inc.§ Haven Neighborhood Services§ Pathfinders§ University of Minnesota Extension


About the Toolkit

§Offers CBA’s Credit Strength Model as a framework

§ Incorporates call-outs§Provides credit building strategies and

tools to enhance client outcomes§Designed for use in financial capability,

community development and reentry programming

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Call-outs: The Many Voices of Returning Citizens

How to talk about credit with returning citizens:

§ “Explain the importance of credit in a tangible way. Speak in street terms. Simple is Key”

§ “Out in the streets, your name is your credit. If you have bad credit, you’re not going to get what you’re looking for. But if your name is ‘golden’ or ‘platinum’…now that’s a different story”

§ Find ways to formulate self-limiting beliefs in a positive way§Avoid saying you need to do this


The Role of Credit for Entrepreneurship and Small Business Development

§Highlight the role of credit in small business development programs as early as possible

§Discuss the role of credit in personal finance and small business endeavors

§A business plan is not everything, credit impacts access to capital!


Provides a Framework

§Credit/entrepreneurship education will be most effective if presented with tangible, actionable steps

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Highlights Program Examples

JP’s Aspire Entrepreneurship Initiative (AEI)§Self-selective participation – 14-week program§ Individual and group counseling/training§Review credit and address early on§ Ice House Entrepreneurship curriculum§Access up to $50K in small business loans


Key Takeaways

§Offer credit education as early as possible (ideally pre-release!)§Potential to minimize

common issues, including identity theft, debt accrual, etc.

Program Example: Lansing Financial

Empowerment Center engages with individuals

prior to sentencing interviews to assist in

freezing credit!


Key Takeaways

“I saw having good credit as a source of pride. I wanted to figure

out how to make myself have a really great credit score. I felt good

[as I achieved it]’-- Jason

§Don’t underestimate the role credit and entrepreneurship can have on improving the self-worth of returning citizens

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Key Takeaways

§Supporting returning citizens in their reintegration into society is work that requires a holistic approach to facilitate healing and growth and will require a change of narrative

Returning Citizen

Support Web

Reentry Program s,

Legal Aid & Financial Coaching

Entrepreneurship Training

M ental Health Professionals


Make Credit Building Count


Program Mapping

How, if at all, does or credit building integrate into yourprogramming?

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Introducing CBA’s Products-in-a-Box

Reentry Opportunity Toolkit

Accessible at: bit.ly/CBA_PIAB


CBA’s Products-in-a-Box (PIAB)

Goal: Support nonprofits in choosing and offering small dollar consumer loans and other credit building products that meet the needs of specific populations in their community through…

1. Turnkey Toolkits2. Technical Assistance3. Loan Capital and Program Funding


Reentry Opportunity Loans

§Loans to help those who have had exposure to the criminal justice system build credit and stability as they reenter into a community.

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Reentry Opportunity Loan: Potential Uses

§ Repay court-imposed fees, costs, restitution or other obligations, or pay back child support

§ Purchase specialized equipment necessary for particular jobs, or

§ Start small businesses§ Housing needs: money for a

security deposit and first and last month’s rent, bed/furniture, etc.

§ Bail bond debt, and other high cost predatory debt

§ Basic needs such as clothing

§ Costs associated with getting a drivers license or a vehicle registration

§ Fees for certificates, courses and job training

§ Credit building



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How CBA Members Do It…


Resources

§ For basic credit guidance: CFPB’s Your Money Your Goals: Focus On Reentry Companion Guide

§ For serving returning citizen entrepreneurs: CBA’s Achieving Credit Strength Toolkit

§ For reentry loan product design: CBA’s Product-in-a-Box: Reentry Opportunity Toolkit

§ Stay tuned for deeper dive into entrepreneurship with reentry: AEO’s Endeavor Ready Initiative


Call to Action: Role of Credit Building in Reentry & Entrepreneurship

§Reentry-focused service providers can explore integration of credit building programs and assessment.

§Nonprofit financial capability and social service providers can explore access to credit building strategies (ie. Products)

§Nonprofit lenders can report their loan portfolios.§ Funders and other stakeholders can advocate and support

credit building as a strategy to support business development and recidivism reduction.

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Acknowledge All Success, Regardless of Size

“Of course every contract has benchmarks and outcomes that have to be hit – but for real, for real, I measure the outcome when people come back smiling. When they finally get their first job after searching for seven months for nothing. Access is bite sized chunks for where their best step is.”

- Mon Valley Initiative


Thank You!

[email protected]

Documents

Supporting Returning Citizens in Entrepreneurship and Credit … · 2019-05-15 · §Prison Entrepreneurship Program §Rising Foundation This toolkit was developed with generous funding