Nonprofit Community Development Finance Receives AHEAD Grant from Federal Home Loan Bank and Citibank for Financial Coaching and Financial Literacy Training

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Customers and clients of Community Development Finance (CDF) will continue to benefit from financial coaching, small business services and social services assistance due to new funding from the Federal Home Loan Bank of San Francisco and Citibank. The mostly unbanked customers are able to receive one-on-one assistance from CDF staff designed to help them through emergencies as well as provide long term, core financial counseling needed to help them move out of poverty.

Customers and clients of Community Development Finance (CDF) -- a nonprofit check cashing agency -- will continue to benefit from financial coaching, small business services and social services assistance due to new funding from the Federal Home Loan Bank of San Francisco and Citibank. The mostly unbanked customers are able to receive one-on-one assistance from CDF staff designed to help them through emergencies as well as provide long term, core financial counseling to help them move out of poverty and into the financial mainstream.

CDF received a $20,000 grant from the Federal Home Loan Bank of San Francisco’s Access to Housing and Economic Assistance for Development (AHEAD) Program, which makes grants to support economic and community development, and affordable housing projects in Arizona, California, and Nevada. The grant was awarded to CDF through the FHLBank San Francisco’s member bank, Citibank.

To our knowledge, CDF operates the only full-service, nonprofit check cashing store in the country. Located in the Fruitvale neighborhood of Oakland, the store offers very low cost check cashing services (check cashing, payday loans, money wiring, money orders, debit cards, bill payment). These low-cost services save customers very substantial amounts of money each year. (We expect to be able to save neighborhood customers about $175,000 or more annually once we reach our target volume.) The goal of this program is to create a nonprofit check cashing institution that will be a financially sustainable social enterprise offering lower prices and a broad range of financial support services designed to help low income families move out of poverty. The check cashing side of the organization should be self –sufficient soon and the financial coaching activities will require ongoing grant/donations to continue operations.

In addition, CDF offers financial coaching to individual households to assist with budgeting, establishing credit or improving poor credit; establishing a bank account or obtaining a loan; establishing savings and retirement accounts; overcoming debt and credit problems; and taking many other steps to improve financial conditions. The program is designed to increase the wealth-building capacity of low-income households and help them move out of poverty. As a non-profit organization, CDF works with each family, one-on-one, to create an individual financial plan that is tailored to their needs. CDF also offers ongoing monitoring and follow-up. As part of this program, CDF also provides various social services assistance when needed – housing, legal, immigration, job support and assistance, and referrals.

CDF also works with small businesses in the neighborhood. CDF provides assistance in the following areas: General Accounting (balance sheet, profit and loss statement), quarterly State sales tax preparation, and systems development (recordkeeping, financial reports, budgeting, bill payments and planning).

CDF Store Manager and Financial Coach, Luis Diaz Lemus, comments about the clients: “Many people and small businesses do not understand the legal, operational and tax complexities they are facing. They often do not know where to start or what to do. We help them address any difficult, immediate issues and then try to work with them to establish the conditions needed to build long term financial success.”

CDF charges only a nominal fee for the financial coaching and social services and very below-market fees for the small business assistance. This grant will allow CDF to continue using this pricing structure.

“With a decades’ long track record of groundbreaking and successful efforts to increase the flow of capital in service to low-income and working families, the people behind Community Development Finance have also helped clear paths for their financial institution partners to better serve underserved communities,” said Jim Yacenda, VP and Community Investment Officer at FHLBank San Francisco. “We believe that their Community Check Cashing endeavor with Citibank has the potential to explore new ways to justly expand the unbanked’s access to financial services.”

About Community Development Finance
Community Development Finance (CDF, was created in 1998 by Dan Leibsohn, the founder of the Low Income Housing Fund (now called the Low Income Investment Fund). CDF opened what we believe to be the only nonprofit, full-service check cashing store in the country in May 2009.

Presently, the fringe banking industry (check cashers, pay day lenders, pawn brokers, etc.) tends to earn extensive profits from low income people, making it more difficult for them to move out of poverty. Often minority and/or immigrants, these households tend to pay very high fees and interest rates that can take a large percentage from their wages or transfer payments.

CDF seeks to address these issues and assist low income households with several clusters of programs designed to help households move into the financial mainstream where lower costs should help them substantially improve their financial conditions:

  •     Below market priced financial services, including check cashing, bill payments, money orders, money wiring, debit cards, and an affordable short term payday loan;
  •     Financial coaching and literacy training designed to assist low income households to increase their wealth building capacity and help them move out of poverty. The program responds to short term crises and creates longer term individualized financial plans for each participating household tailored to its needs and includes ongoing monitoring and follow-up.
  •     Small business assistance through below market bookkeeping, financial coaching to help develop proper methods of planning, creating systems, etc.;
  •     Social services assistance by offering information and referrals for housing, immigration, food, legal and other issues;
  •     Consumer and business loans and the creation of checking and savings accounts offered by bank/credit union partners.

Contact: Dan Leibsohn, Executive Director
Community Development Finance
Oakland, CA
(510) 848-1174

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Daniel Leibsohn

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