Last year was tumultuous for members, but relatively stable for the credit unions themselves. Credit unions are starting to look at the new year with adjusted budgets and inspiring initiatives. They effectively changed the way they serve their members while strategically navigating devastating economic hurdles. Unfortunately, not every American gets to experience the sensation of improved financial health lifting them out of economic despair. Racial equity continues to be top of mind for organizations in the financial services space, particularly the need to include underserved communities in financially beneficial programming.
Financial inclusion is one of the most effective strategies to provide low-income individuals, particularly those in underserved minority populations, the credit-building tools necessary to achieve financial health and stability in the years ahead. QCash Financial believes credit unions are the best, most responsible financial institutions from which members and consumers can access financial services and financial education programs. By their nature, credit unions are a superior vehicle to encourage and promote economic revitalization while linking consumers with more affordable and sustainable financial products and services.
Throughout history, minority populations have been unfairly segmented by mainstream financial institutions and financial products and services. The lack of access to such assets has overwhelmingly limited their ability to create financial health and greater wealth.
It is important to remember the need for financial inclusion doesn’t only affect minority communities and low-income earners. According to the CareerBuilder, 78 percent of all full-time workers live paycheck-to-paycheck, while 71 percent of U.S. workers live in debt. Experian found 35 percent of the adult population have credit scores below 650. Credit unions and the knowledgeable professionals therein, can be a consistent and dependable solution to such modern-day challenges to financial inclusion and economic stability.
As the regulatory space continues to push small dollar lending as a fundamental need for credit union communities, there are many small dollar loan programs that may be a fit for your credit union’s specific needs:
- Special Purpose Credit Program (SPCP) – offered to a specific minority community
- Buy-Now-Pay-Later (BNPL)
- Salary Advance
Such practical and beneficial small dollar loan programs confirm that credit unions should be the tip of the spear in lifting up minority and low-income populations. By incorporating a credit union presence in low-income communities, these member-owned financial institutions back up their reputation for financial inclusion by offering such benefits like more affordable loan terms, lower credit card fees, and more flexibility for those with imperfect or no-credit histories. CU Management research found that credit unions “consistently demonstrate that financial inclusion and community development are not only sustainable activities but, in fact, they are primary drivers of growth and relevance.”
January’s $600 stimulus checks can only solve so many problems for low-income and underbanked minority communities. The proposed addition of $1400 will surely provide some additional relief, but neither stimulus check represents any form of long-term problem-solving initiative to increase overall financial health. QCash Financial is proud to stand with credit unions in 2021 and be part of the many financial inclusion programs aimed at providing economic relief to our nation’s communities in need.