Reimagining How Banks Can Work for Black and Brown Customers - Change Machine

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Reimagining How Banks Can Work for Black and Brown Customers

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This interview was originally featured in Tech For Equity Updates — a biweekly newsletter about Change Machine’s platform, including upcoming trainings, and insights from our community of practice. Subscribe today!

Meet Parisa Esmaili, the executive director of Community Financial Resources (CFR), a national nonprofit that provides a pathway to financial wellbeing through products, tools, and services with a focus on BIPOC communities. Parisa has been an executive director since 2020, where she drives CFR’s strategic vision and growth.

CFR’s premier Focus Prepaid Visa Debit Card is featured on our recommendation engine. The debit card includes a linked savings account with built-in automatic transfers, allows users to create an account without a credit or Chex systems review, and gives access to over 80,000 free US Bank, Allpoint, or MoneyPass ATMs.

We spoke to Parisa about the value of partnering with traditional financial institutions as a means to building financial security for underserved communities. How can we partner with financial institutions to not only supplement financial coaching, but embed equity into financial resources? Find out below!

Tell us more about CFR’s Focus Card.

Our Focus card has no overdraft fees, no monthly maintenance, and no check system or credit check. You can also be as young as 14 and receive the card without a custodial signature — all of which helps folks who experience barriers have access to a safe account where they can store, spend, and save their money.

The Focus Card has been complementary to Change Machine’s work and is on Change Machine’s recommendation engine. We don’t do direct services, so by partnering with Change Machine we’ve been able to reach other organizations and practitioners who have not been able to access our product beforehand.

What have been the challenges in connecting more households navigating financial insecurity with traditional financial institutions?

A lot of folks have an inherent distrust for institutions because it’s really expensive to be banked, so we focus on re-establishing or creating trust. We want to create a safe place where folks don’t feel like they have to store their money under the mat or lose their money through a check casher.

The CFPB and other players are cracking down on overdraft fees, but that’s the bread and butter of how banks make money. When we see who is being charged the most, it is the most financially marginalized households.

How do we work with existing financial institutions to prioritize the needs of communities navigating financial insecurity?

Our unique relationship with US Bank – which allows us to use the Focus card — is an example of how financial institutions can think about change in their models. When US Bank offers us the Focus card, by default other financial institutions have to look into it and discuss if they can build it into their product and business model. We want these banks to not just check a box off to be Community Reinvestment Act (CRA) compliant, but to also think about how they can offer these products more creatively.

What we and US bank demonstrate is that you can bank low-income communities and still be profitable. If you demonstrate that you can scale small pilots into larger programs, then it might lead to some changes. They don’t happen overnight, but they happen incrementally. We see it as a win whenever we get a bank to actually think about its underwriting.

How do we shift the narrative on navigating financial insecurity from personal responsibility to addressing systemic issues?

We need to stop telling the story of pulling yourself up by your bootstraps because the bootstraps never even existed for a lot of folks. If someone has more money, here’s what happens: more money goes back into the economy. They have the opportunity to look into different jobs so they can make better lives for themselves and their families.

We try to center people’s experiences, and let them be the storytellers of their own story — as opposed to us telling their stories — and empower those individuals. Change and data can tell you all the things in the world, but data doesn’t change hearts. Stories do, so by centering those individuals who are most impacted, it really changes the narrative of the story we’re working on.

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