Positive Financial Options

CRC strongly advocates for unbanked and under-banked consumers to become part of the financial mainstream. One strategy for these individuals is to open bank accounts.  While this strategy has the potential to start individuals on a path of asset accumulation, it can also be detrimental for many inexperienced banking customers. 

Major banks offer free and low-cost checking accounts that can also carry a number of fees.  If an account holder overdraws the account, they will either be charged an overdraft fee or a fee to cover the amount of the overdraft (i.e., “bounce protection”).  Banks make it easy for a customer to overdraw an account, whether it occurs through unlimited check writing or withdrawals at an ATM.

CRC wants consumers to have a positive banking experience.  For those consumers accustomed to budgeting their finances with a “cash in/cash out” strategy, CRC developed a starter account known as the Essential Bank Account (EBA). 

The EBA has money orders instead of checks and does not allow the account holder to overdraw the account.  The EBA is not a replacement to banks’ existing checking accounts, but rather a starter account in which an individual can learn to balance and operate an account without the worries of bouncing checks. 

For existing account holders, access to an emergency short-term loan is difficult.  Many consumers turn to payday lenders.  Payday loans are expensive and because the term of the loan is a two-week period, many borrowers are unable to pay the balance of the loan and therefore find themselves in a vicious cycle of debt. 

As an alternative to payday loans, CRC is promoting the Quick Consumer Loan (QCL) to banks.  The QCL has a lower interest rate and a longer term (two months) as well as limits on how many of these loans can be issued within a 12-month period.