How Being Unbanked or Underbanked Could Cost You $360,000 Over a Lifetime
Wells Fargo and Operation HOPE are partnering to provide free financial coaching through HOPE Inside centers, with a focus on serving unbanked and underbanked communities. The first center in New Mexico, located in a Wells Fargo branch near the Navajo Nation, is helping residents stabilize finances and build wealth. Eli Tully, a Navajo-speaking financial coach, is bridging cultural gaps and providing important financial education.
The initiative aims to address the challenges faced by unbanked individuals, who may lose up to $360,000 over a lifetime due to high-cost alternative financial services. Wells Fargo plans to expand to 50 HOPE Inside centers by 2026, as part of its Banking Inclusion Initiative. The program has shown success in helping clients save money, reduce debt, and increase credit scores.
Wells Fargo e Operation HOPE stanno collaborando per fornire coaching finanziario gratuito attraverso i centri HOPE Inside, concentrandosi nel servire comunità non bancarizzate e sottobancarizzate. Il primo centro nel New Mexico, situato in una filiale di Wells Fargo vicino alla Navajo Nation, sta aiutando i residenti a stabilizzare le finanze e costruire ricchezza. Eli Tully, un coach finanziario che parla Navajo, sta colmando le lacune culturali e fornendo un'importante educazione finanziaria.
L'iniziativa mira ad affrontare le sfide che affrontano le persone non bancarizzate, che possono perdere fino a 360.000 dollari nel corso della vita a causa di servizi finanziari alternativi ad alto costo. Wells Fargo prevede di espandere a 50 centri HOPE Inside entro il 2026, come parte della sua Iniziativa di Inclusione Bancaria. Il programma ha mostrato successo nell’aiutare i clienti a risparmiare denaro, ridurre il debito e aumentare i punteggi di credito.
Wells Fargo y Operation HOPE están colaborando para proporcionar asesoramiento financiero gratuito a través de los centros HOPE Inside, con un enfoque en servir a comunidades no bancarizadas y sub-bancarizadas. El primer centro en Nuevo México, ubicado en una sucursal de Wells Fargo cerca de la Navajo Nation, está ayudando a los residentes a estabilizar sus finanzas y construir riqueza. Eli Tully, un asesor financiero que habla Navajo, está cerrando las brechas culturales y ofreciendo educación financiera importante.
La iniciativa tiene como objetivo abordar los desafíos que enfrentan las personas no bancarizadas, que pueden perder hasta $360,000 a lo largo de su vida debido a servicios financieros alternativos de alto costo. Wells Fargo planea expandirse a 50 centros HOPE Inside para 2026, como parte de su Iniciativa de Inclusión Bancaria. El programa ha demostrado ser exitoso en ayudar a los clientes a ahorrar dinero, reducir deudas y aumentar sus puntajes de crédito.
웰스 파고와 오퍼레이션 호프는 무료 재정 코칭을 제공하기 위해 HOPE Inside 센터에서 협력하고 있으며, 은행 서비스 이용이 되지 않거나 부족한 커뮤니티를 지원하는 데 중점을 두고 있습니다. 뉴 멕시코에 위치한 첫 번째 센터는 나바호 네이션 근처의 웰스 파고 지점에 위치해 있으며, 주민들이 재정을 안정시키고 부를 쌓도록 돕고 있습니다. 나바호어를 사용하는 재정 코치인 엘리 털리가 문화적 장벽을 허물고 중요한 재정 교육을 제공하고 있습니다.
이 이니셔티브는 고비용 대체 금융 서비스로 인해 비은행 고객들이 평생에 걸쳐 360,000 달러를 잃을 수 있는 도전에 대처하는 것을 목표로 하고 있습니다. 웰스 파고는 2026년까지 50개의 HOPE Inside 센터로 확장할 계획이며, 이는 은행 포함 이니셔티브의 일환입니다. 이 프로그램은 고객들이 돈을 절약하고, 부채를 줄이며, 신용 점수를 높이는 데 성공을 보여주었습니다.
Wells Fargo et Operation HOPE s'associent pour offrir un coaching financier gratuit à travers les centres HOPE Inside, en mettant l'accent sur le service des communautés non bancarisées et sous-bancarisées. Le premier centre au Nouveau-Mexique, situé dans une agence Wells Fargo près de la Navajo Nation, aide les résidents à stabiliser leurs finances et à construire de la richesse. Eli Tully, un coach financier parlant Navajo, comble les écarts culturels et fournit une éducation financière importante.
L'initiative vise à relever les défis rencontrés par les personnes non bancarisées, qui peuvent perdre jusqu'à 360 000 $ au cours de leur vie en raison de services financiers alternatifs coûteux. Wells Fargo prévoit d'élargir son réseau à 50 centres HOPE Inside d'ici 2026, dans le cadre de son Initiative d'Inclusion Bancaire. Le programme a montré son efficacité à aider les clients à économiser de l'argent, à réduire leurs dettes et à augmenter leurs scores de crédit.
Wells Fargo und Operation HOPE arbeiten zusammen, um kostenloses Finanzcoaching über die HOPE Inside-Zentren anzubieten, wobei der Schwerpunkt auf der Unterstützung von unbanked und underbanked Gemeinschaften liegt. Das erste Zentrum in New Mexico befindet sich in einer Wells Fargo-Filiale in der Nähe der Navajo Nation und hilft den Bewohnern, ihre Finanzen zu stabilisieren und Wohlstand aufzubauen. Eli Tully, ein Navajo-sprechender Finanzcoach, überbrückt kulturelle Barrieren und bietet wichtige finanzielle Bildung.
Die Initiative zielt darauf ab, die Herausforderungen zu bewältigen, mit denen unbanked Personen konfrontiert sind, die im Laufe ihres Lebens bis zu 360.000 $ durch hochpreisige alternative Finanzdienstleistungen verlieren können. Wells Fargo plant, bis 2026 insgesamt 50 HOPE Inside-Zentren zu eröffnen, als Teil seiner Banking Inclusion Initiative. Das Programm hat sich als erfolgreich erwiesen, um den Kunden zu helfen, Geld zu sparen, Schulden zu reduzieren und Kreditwürdigkeit zu erhöhen.
- Partnership between Wells Fargo and Operation HOPE to provide free financial coaching
- Expansion plans for 50 HOPE Inside centers by 2026
- Proven success in helping clients save money, reduce debt, and increase credit scores
- Culturally sensitive approach with multilingual coaches like Eli Tully
- 7% of New Mexicans were unbanked as of 2021, 2.5% higher than the national average
- Unbanked individuals may lose up to $360,000 over a lifetime due to high-cost alternative financial services
This article highlights a important initiative addressing financial inclusion in underserved communities, particularly the Navajo Nation. The collaboration between Wells Fargo and Operation HOPE to establish HOPE Inside centers is a significant step towards bridging the financial gap for unbanked and underbanked populations.
The impact of this program is substantial:
- It targets the 7% of New Mexicans who were unbanked as of 2021, which is 2.5% higher than the national average.
- The program provides free, personalized financial coaching, which has been shown to help clients save money, reduce debt and increase credit scores.
- By offering services in native languages, including Navajo, the program overcomes cultural and linguistic barriers that have historically contributed to financial exclusion.
From an investor's perspective, Wells Fargo's involvement in this initiative demonstrates a commitment to corporate social responsibility and community development. This can potentially enhance the bank's reputation and customer base in underserved markets, leading to long-term growth opportunities. However, the immediate financial impact on Wells Fargo's bottom line may be , as the services are provided free of charge.
The program's success could lead to increased financial literacy and economic participation in these communities, potentially creating a larger customer base for banking services in the future. This aligns with Wells Fargo's Banking Inclusion Initiative and could position the bank favorably in terms of regulatory compliance and community relations.
While the direct financial returns may not be immediate, the long-term benefits of fostering financial inclusion could contribute to sustainable growth and market expansion for Wells Fargo in previously untapped demographics.
The article underscores a critical economic issue: the substantial cost of being unbanked or underbanked over a lifetime. This has significant implications for both individual financial well-being and broader economic development.
Key economic impacts to consider:
- The Brookings Institution found that an unbanked person could spend up to
$40,000 on check-cashing services over their lifetime. - The article suggests that being unbanked could cost an individual up to
$360,000 over a lifetime, though it doesn't provide a detailed breakdown of this figure. - Unbanked individuals miss out on three important elements of wealth creation: credit access, earned interest/returns and financial education.
The economic ripple effects of increased financial inclusion could be substantial:
- Increased participation in the formal banking system could lead to higher savings rates and more efficient allocation of capital.
- Improved credit access could stimulate small business creation and homeownership, driving local economic growth.
- Reduced reliance on high-cost alternative financial services could increase disposable income, potentially boosting consumer spending and local economies.
From a macroeconomic perspective, the success of such financial inclusion initiatives could lead to more robust and inclusive economic growth. This is particularly important for regions like the Navajo Nation, which have historically been economically marginalized.
For investors, this trend signals potential growth in the retail banking sector, particularly for institutions that can successfully serve previously underbanked populations. It also highlights the importance of considering social impact and community development initiatives when evaluating financial institutions' long-term growth prospects and risk profiles.
In Gallup, New Mexico, a financial coach is helping the Navajo Nation and other residents stabilize their finances, build wealth, and avoid high-cost banking alternatives.
NORTHAMPTON, MA / ACCESSWIRE / July 31, 2024 / Winding single-lane highways connect the corners of the Navajo Nation. Near the country's largest reservation - bigger than West Virginia - Eli Tully connects communities, too. Each journey through the Southwestern desert to meet a client is a financial bridge where there may not have been one before.
Tully, an Operation HOPE financial coach, primarily helps clients from the nonprofit's first HOPE Inside center in New Mexico. The center, which is in a Wells Fargo branch near the reservation border town of Gallup, New Mexico, is among a growing number of HOPE Inside centers in Wells Fargo branches around the country that provide free, one-on-one financial coaching. Operation HOPE data shows this coaching has empowered people to save money, reduce debt, and increase their credit scores (see infographic below).
"We have some individuals here that are so, so private that they would never walk into a bank," Tully said. "These people are getting the knowledge now that they weren't getting 10 or 20 years ago."
Tully is particularly well-qualified to reach the
He understands firsthand that many Indigenous and Native American people grow up with a distrust of the banking system. Historically, Native Americans and Alaska Natives have been more likely than any other demographic to be unbanked, though that has reversed quickly in recent years, according to the FDIC (PDF).
"When I was 18, 19, I didn't have this kind of coaching. I didn't have any type of direction on credit cards, building credit, finding a way to get a vehicle - none of that was coached," Tully said. "I wanted to be that connection for all walks of life in my community."
He's already helped some clients with no credit history, including people in their 50s. A 26-year-old client - who never opened a bank account and didn't understand credit - went from a poor credit score to one in the high 700s.
"He called me and was almost in tears because he understands the credit scoring system now. Before, he thought a credit score of 300 was the best he could have," Tully said. "I showed him the scale and said, ‘Dude, you're way up here now.'"
How the cost of being unbanked adds up over time
In place of a banking relationship, unbanked Americans may use alternative financial services that may carry risks: higher interest rates, bigger fees, or losing valuable assets like a car. In Gallup, for example, Tully reaches out to payday and auto title loan companies to try and get referrals for clients who could benefit from his coaching.
"This community is really, really bombarded with payday loans," he said. "They're fishing. They're reeling in all these people to take advantage of."
Relying on services from payday lenders, check cashers, pawn shops, and money transfer services can feel like getting stuck on a treadmill. It's hard to move forward when you're paying high fees or interest rates. The Brookings Institution found that an unbanked person could spend as much as
"People wind up paying those fees over and over and over again," said Michael Martino, head of Diverse Customer Segments for Consumer, Small and Business Banking (CSBB) at Wells Fargo. "[Relying on these alternative banking options] never allows the unbanked person to get ahead and participate in the banking economy."
For some, these nonbank or costly alternative financial services may act more like daily money managers rather than long-term wealth builders. Martino said it gets worse when unbanked households don't have a mainstream banking relationship and miss out on three keys to creating multigenerational wealth:
Credit access through credit cards and loans
Earned interest and returns via savings and investment products
An education on how the financial system works
So, why are people unbanked? The most-cited reasons are the costs of banking, unpredictable or unexpected fees, and issues reaching minimum banking requirements, according to the most recent 2021 FDIC survey data (PDF).
On the Navajo Nation, accessibility to high-quality banking services - and necessities like electricity and groceries - has been an issue.
"Our community is considered unbanked and underbanked because we're always a community that is forgotten or last, and that's true across the board," Tully said.
How HOPE Inside centers help unbanked and underbanked clients
When Tully sits down with a client for the first time, he checks to see if they're from the same community. It's possible they may be related. Even if they're not, it creates a community-level relationship.
"I say, ‘Oh, you're from the next community to mine?' Most likely, they know my grandparents. I create the relation. I create the trust," he said.
Coaching offered through HOPE Inside centers focuses on financial goals like improving your credit score, boosting savings, or building a budget. The coaching is free, and clients have no obligation to bank with Wells Fargo. By working with coaches like Tully, clients build a path toward reaching their financial goals.
"The most important thing is what happens next. Once you can achieve [financial stability], can you buy a home? Can you start a business? Can you achieve a better auto loan? Can you put your kids through college?" said Mary Ehrsam, Operation HOPE's president of partnerships. "That's what we're here for."
Wells Fargo serves one in three of the country's 574 federally recognized tribes, and its work with Navajo Nation goes back more than six decades. In fact, there are five branches throughout the reservation.
"Our roots are in the West. And what that means is our leaders have experience working with tribal communities. They understand them and they've been to reservations," said Dawson Her Many Horses, head of Native American Banking at Wells Fargo.
Wells Fargo continues to invest in HOPE Inside centers to help more communities as part of the Banking Inclusion Initiative. In 2023, 20 centers served more than 2,700 clients. Wells Fargo aims to have 50 centers inside branches throughout the U.S by the end of 2026.
"At the end of the day, we're empowering people to be able to take control of their financial future," Martino said. "And that's multigenerational, because they can teach their children and their families, too."
Key takeaways
An Operation HOPE financial coach is serving residents of New Mexico, Arizona, and the Navajo Nation in their native languages. Many are unbanked or underbanked.
This free, one-on-one financial coaching is possible through a HOPE Inside center in Gallup, New Mexico, the first of its kind in the state, located inside of a Wells Fargo branch.
Millions of unbanked and underbanked households use nonbank financial services, according to the FDIC (PDF). These may come with high fees or interest rates that make it harder for people to accomplish their financial goals.
Clients of Wells Fargo's HOPE Inside centers have made proven strides in growing savings, reducing debt, and raising credit scores, according to Operation HOPE data.
View additional multimedia and more ESG storytelling from Wells Fargo on 3blmedia.com.
Contact Info:
Spokesperson: Wells Fargo
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SOURCE: Wells Fargo
View the original press release on accesswire.com
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