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Baltimore Program Aims to Curb Fringe Banking

by Elizabeth Ryan 


Tags: Urbanite, Baltimore, payday lending, banking, Baltimore Cash Campaign, fringe banking, Brookings Institution, Elizabeth Ryan,

urbcovmarMost people don’t want to turn to check cashers and payday lenders to do their banking, but for some people in West Baltimore, there are no legitimate bank branches within walking distance.

The Urbanite cited a 2008 Brookings Institution report on the “non-bank basic financial services industry,” which found that one neighborhood convenience store providing check cashing services for a fee is “at the epicenter of a west-side financial services desert—approximately four square miles with no convenient access to basic services such as checking and savings accounts.” No wonder we have yet to stunt the growth (out of necessity) of fringe banking practices—for many, it’s the only convenient and feasible option for paying their bills on time.

Thankfully, a new coalition has formed to help residents. The Baltimore Cash Campaign aims to help low-and moderate-income families become financially literate. The group organizes free tax preparation services at trusted community locations and helps educate and provide resources to residents on checking accounts, certificates of deposit, and savings options, with the goal of turning those initial sessions into long-term practices—an important first step toward a larger financial conversion that’s desperately needed, especially when you consider some general findings from the Brookings Institution report: Households collectively pay more than $8 billion in annual fees to these non-bank establishments, and a full-time employee can lose upwards of $40,000 of earnings by using these fringe banking services instead of traditional banks. Yow!

 Source: Urbanite

The Urbanite was nominated for an Utne Independent Press Award this year for its social/cultural coverage.

asa q
6/13/2009 12:49:33 AM

Payday lending is popular these days. Talking about this, have you heard about Kiva microfinance? Kiva microfinance is moving into the United States. Kiva is a microlender, a type of finance company that does things on the small scale using a type of loans called microloans. Microloans are small loans that are given to people in order to create their own industry or business, usually cottage type industry, and for the most part a lot of microfinance goes on in countries that are stricken with rampant poverty. Venturing into the U.S., where so many can get online loans, isn't the worst of ideas since the recession has hit the finance industry very hard. Microfinance has come into it's own over the last decade, and some charitable cash advances given through Kiva is a worthy cause. Read more about this on: http://personalmoneystore.com/moneyblog/2009/06/10/kiva-lends-money-businesses/


asa q
6/13/2009 12:49:13 AM

Payday lending is popular these days. Talking about this, have you heard about Kiva microfinance? Kiva microfinance is moving into the United States. Kiva is a microlender, a type of finance company that does things on the small scale using a type of loans called microloans. Microloans are small loans that are given to people in order to create their own industry or business, usually cottage type industry, and for the most part a lot of microfinance goes on in countries that are stricken with rampant poverty. Venturing into the U.S., where so many can get online loans, isn't the worst of ideas since the recession has hit the finance industry very hard. Microfinance has come into it's own over the last decade, and some charitable cash advances given through Kiva is a worthy cause. Read more about this on: http://personalmoneystore.com/moneyblog/2009/06/10/kiva-lends-money-businesses/