In today’s capitalistic environment after the 2008 financial disaster, our community still find itself extremely underserved and difficult finding stable sources of financial backing. Whether it consist of Home Mortgage financing, small personal loans, student loans, Start-up capital, business loans or just finances to purchase a vehicle or simple personal property dollars for our families needs. Those financial institutions willing to fund our ventures are just not readily available to our ethnic community.


So we have resorted to the only financial services organization within our community and consequently financially backed by those TBTF’s, whom some of us still try and sign capital contracts for finances we are continually being denied. However, if we need capital most of us use those high interest credit payday or title loans institutions that are present on almost every corner in our community. Consequently, we have become so unimportant to the financial industry that their word for us is UNDERBANKERS. The underbanked is a general label describing two consumer segments: individuals with no bank accounts (unbanked) and individuals with bank accounts who regularly use nontraditional financial institutions such as check cashers and payday lenders (underbanked), banks have identified the underbanked as a separate market segment and are dedicating resources to them as such. Other banks treat them as a part of an existing market segment.  For example, some banks have created specialized departments to focus on this and similar segments, sometimes referred to as emerging market departments, while others incorporated the underbanked in their existing retail divisions. They exploit this financial segment of society by not lending directly to the individuals but to the above mentioned payday lenders who then charge loan shark interest rates to those unfortunates.


These underbanking individual are a huge source of untapped profits for those institutions who use them for their bottom line growth numbers to investors. We are finding out quickly that we are not the only source of capital growth for these banks. The student loan arena is another segment of our society that has been a boon for banks that have recovered from the ‘08’ financial crisis. This is another extremely lucrative and stable source of growth to banks who have become “Too big to Fail” (TBTF).


This bring us to a little known solution within our community, some creative instruments for funding that will take away some of that growth income from banks so maneuvering into those instruments will not be easy because those banks will not let that easy income be taken from them without a fight. Community Development Financial Institutions (CDFIs) are mission-driven financial institutions that create economic opportunity for individuals and small businesses, supporting quality affordable housing, and essential community services throughout the ethnic United States. The four types of these institutions are included in the definition of a CDFI: Community Development Banks, Community Development Credit Unions, Community Development Loan Funds (most of which are non-profit), and Community Development Venture Capital Funds. Some, but not all, CDFIs are certified by the CDFI Fund. Certification is often necessary in order to receive support from the CDFI Fund. Let’s be perfectly clear the above institutions are regulated by the Department of the Treasury and those TBTF’s will not take it lying down if too many communities take advantage of those resources to fund individuals in our community. These kinds of funding have been around for many years but our community has not taken advantage of these instruments for financial growth.

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