Mayor’s Economic Inclusion Advisory Committee Releases Recommendations.

Nashville Financial Empowerment Center and US Community Credit Union Will Partner on New Loan Option

Metro Nashville Press release, October 27, 2017 - Mayor Megan Barry’s Economic Inclusion Advisory Committee today unveiled its report containing recommendations to build a more financially inclusive city by increasing financial literacy, empowerment and capability. Mayor Barry was joined at the announcement by committee co-chairs Eddie George, managing partner of Edward George Wealth Management Group, and Dr. Shawn Joseph, director of Metro Nashville Public Schools, as well as Paul Johnson, President and CEO of US Community Credit Union, which announced an innovative new small-dollar loan for working Nashvillians who can’t qualify for traditional loans.

Since Mayor Barry launched the committee in September 2016, its members have worked in subcommittees to produce a report with short-, medium- and long-term actions. Mayor Barry charged the committee with developing a “Nashville Vision” that provides a comprehensive approach to empowering low-income and moderate-income Nashvillians toward financial inclusion.

“Nashville has been experiencing terrific economic growth, but that prosperity has not been shared by all. I asked this committee to come up with ways to improve the financial well-being of all Nashvillians. The recommendations in this report will help guide those efforts,” Mayor Barry said. “I’ve instructed my staff to move these ideas to action and complete implementation plans for each of them.”

Each subcommittee created a set of actionable strategies to (1) increase financial literacy, (2) empower residents in their financial decision-making and (3) increase access to financial capability. Their recommendations fall under three target areas for improvement:

• Financial Literacy: Every student graduating from Metro Nashville Public Schools should be financially literate and understand basic financial concepts.
• Financial Empowerment: Nashville needs to expand, grow and professionalize financial empowerment tools to empower its residents.
• Financial Capability: The city needs to increase access to the financial mainstream, meaning safe and affordable financial services, for all Nashvillians, regardless of cultural, societal or legal barriers.

In its report, the committee recommended opportunities for Metro and its educational, non-profit, financial, and legal institutions to prioritize financial inclusion to improve residents’ quality of life. Some key recommendations include:

• Clearly defining a consistent personal finance curriculum across the school system;
• Developing criteria and a process for re-credentialing of MNPS personal finance teachers;
• Forming a private-public partnership that reduces barriers to access workforce or post-secondary attainment; 
• Finding new innovations that support access to small-dollar loan alternatives;
• Commissioning an impact analysis of proposed and existing court fines, fees and taxes and the collateral consequences affecting financial security and capability;
• Deploying pretrial pilot projects that substantially reduce incarceration rates, the associated costs and failures to appear;
• Protecting consumers against unfair and deceptive business practices by developing a consumer protection program

Discussions have already begun between the Mayor’s Office and several criminal justice agencies about how to implement financial justice strategies, including the use of text-message reminder systems to help ensure that additional debts are not created by a missed court date.

“Personal finance is an important component of a young person’s education,” said Dr. Joseph. “We need the right information at the right time for students to understand this importance, and our teachers need to be equipped with the right tools. Our team will be working with our local Federal Reserve to develop an enhanced training and re-credential process so our teachers are prepared.”
“In principle, personal finance is simple: maintain an active budget, spend less than you make, and save for emergencies and large purchases,” said Eddie George. “However, the process for how to do these things has become increasingly complex. We recommend expanding the capacity of our financial empowerment counseling services to meet these needs.”

“Community Development Financial Institutions across the country are working to improve the economic opportunity of low-income communities, and we are incredibly excited to continue this mission in partnership with the Nashville Financial Empowerment Center,” said Paul Johnson, President and CEO of US Community Credit Union. “We are proud to partner with the Nashville FEC to pair a quality loan product with the financial counseling needed to repair credit and gain financial acumen.”

The Opportunity Loan is designed to help consumers pay off expensive debt and will provide qualifying clients with a loan option up to $4,000. The interest rate and the amount someone can borrow will be based on income, credit score, and ability to repay. Consistent payment will be positively reported to credit reporting agencies.
Full Economic Inclusion Advisory Committee Report

My Comment: I commend Mayor Barry for this endeavor. There are several good initiates outlined in the report. For those interested in this issue, I encourage you to read the report at the link above.

For most of my career I have worked with low-income people in some capacity. For about the last 25 years I worked with a non-profit organization as a housing counselor and for many of those years I served as the director of the housing counseling programs.  I have designed programs, written grants and tracked results, counseled clients and taught classes.  I worked with both low-income people who were trying to obtain home ownership and with clients who were facing foreclosure.

One of our programs that was quite successful was "Homebuyers Club."  In this programs we worked long-term with people who were very poor, teaching them financial skills, encouraging them to save money, repair their credit and build good credit, and we helped them get grants and loans to buy a house.  For people who come from generational poverty and have spend their life in public housing, who have lived in an environment where most people were on some sort of welfare and where there were few intact two-parent households, there are tremendous obstacles to getting out of poverty.  As you teach these people how to improve their financial standing and give them skills, you must also help them change their behavior and their way of thinking. That is not easy.

The Homebuyers Clubs were a combination of financial literacy classes and something that resembled an AA meeting. It was as much about encouraging and motivating people as it was about giving them information. In the years I managed the program we had approximately 900 families achieved home ownership.  Most of these were the hard core poor, many of them residents of public housing when they came to us. For those families who succeeded, we changed their life and the lives of future generations.  I feel good about that. For those who did not achieve homeownership, they still may have benefited. I hope so.  Unfortunately, for every success we had probably 100 people who did not achieve success. Some would only come for one meeting or one one-on-one session and when they realized they were not just signing up for something that would just be handed to them, they did not come back. Others tried really hard but the obstacles were just too great and after months of trying they gave up.

I have a lot of thoughts about what needs to be done to lift people out of poverty and what causes people to become part of a class of the permanent poor that have little hope of ever improving their lives.  There are no simple answers but there are things that can help.  The problem of poverty is complex. While there are the hard core poor, there are also people who just do dumb stuff because they don't know better. These people can benefit most from financial literacy. I have seem people who were not the hardcore generational poor but who fail to get out of poverty or who fall into poverty, simply due to poor money management skills or making other poor decisions. I strongly endorse financial literacy being taught in the schools. Knowing some basic life skills like understanding interest rates and how to balance a check book are very important.  Financial skills is probably more beneficial than advanced calculus. While this endeavor of the mayor's will not solve the problem of poverty, it will help.  It is the right thing to do.

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