1,000 Bank Branches for the Poor!

"This first ever national network of 1,000 HOPE Inside locations, will become the 'Starbucks of financial inclusion,' and the private banker for the working person, by year 2020."

Fact: There are approximately 100,000 bank branches in America today, but most of them are actually under utilized.

Some will close, others will become something else in time, and still others will move up market, serving a more technology-centered and technology-friendly customer. Frankly, people like myself might even choose to ‘bank’ mostly from our mobile phone, in time. Everything is changing, but some of these societal changes will require an answer which is both a combination of high tech and high-touch.

I am concerned with the 100 million Americans who make just about $50,000 a year, or half of America. People like my late father, who was a working class, very small business owner who ‘had issues’ that he needed to explain -- to someone.

My father’s needs were not going to be served by an ATM alone, and he was not going to apply for a mortgage loan via a computer. He barely trusted the people he actually knew.

My dad 'needed to talk to someone.’ He needed a relationship (banker). Frankly, what he needed was simply the way community banking used to be.

The average American deserves a private banker of their own, and I plan on changing all of this by opening 1,000+ of our HOPE Inside locations.

HOPE Inside of bank branches, credit unions, grocery stores, big box retailers, payment locations, government offices, and even houses of faith in under-served communities. We are even opening HOPE Insides locations inside of two Hyatt Hotels, for their employees. Our flagship office now sits on the hallow ground of the King Center campus in Atlanta, where we operate the HOPE Inside @ Ebenezer, in honor of Dr. King's father, Martin Luther King, Sr. -- who was both a pastor, and served on the board of a bank for 40 years! Yes, the board of a BANK!

Daddy King made sure he taught those in the church pews a little about what happens behind the banker's counter also. In so doing, he changed their lives forever, and not just by giving birth to the great Dr. Martin Luther King, Jr.

My mission today is nothing short of revolutionary in theory.

We will become the first ever national nonprofit ‘private banker to the working poor and struggling middle class in this country.’

We will finish what President Abraham Lincoln first dreamed up in 1865, and what Dr. King tried to advance before his death in 1968.

Facts:

There are more check cashers in America than there are Starbucks, and the predatory financial services sector represents a more than $500 Billion annual industry. That's half a trillion dollars.

And these days you don’t even have to be poor and destitute to be targeted by the broad collection of check cashers, payday lenders, rent-to-own stores, title lenders — even liquor stores. And it isn’t racism which is driving this troubling phenomena.

It's a 500 credit score.

These predators are targeting 500 credit score (and below) communities, with a well thought out science I refer to as 'negative behavioral economics.’

They are all feeding on the distress that arises slowly from a growing sense of stagnant income, over time, for everyone from the working poor to the struggling middle class.

They are feeding on the toxic mix of bills that arrive on time, and reliable incomes that increasingly do not.

They feed on the rampant financial illiteracy at all levels of society, the lost hope, and the lost sense of personal confidence that comes from the erosion of stable, decent paying jobs. Lost hope naturally breeds a crumbling community confidence.

And so, whether we are talking about an inner city urban neighborhood (a Black and Brown community), or rural small towns (white poverty), or outside of a military base ( a mixed bag of everyone), you will find a constant presence of these predatory financial service companies.

But then you have this. When I drive down a once stable middle class main street, as I did recently in my mother’s neighborhood recently in Houston, Texas, only to find one or several of these ‘companies,’ literally every 100-200 yards from each other. This should say something powerful about America, and the continuing struggle of her citizens. We are not talking about so-called lazy people people.

I call this collective group “the teetering class," or the 70% of American citizens that live from paycheck to paycheck, according to the Federal Reserve. Folks with “too much month, at the end of their money,” as I outline “How The Poor Can Save Capitalism.”

Folks identified not by black, white, red, brown or yellow (race), but the collective green (the color of U.S. currency). As in ----- not enough of it.

These companies are preying on underserved communities with a 500 credit score, and increasingly even struggling middle class communities, and I have decided I am going to do something about it.

Respectfully, I am simply going to rob them of their customer, using the same powerful market dynamics that these other companies used to attract these customers in the first place. Aspirations, and a positive version of behavioral economics.

Everyone wants to do better, but if you don't know better, you simply cannot do better.

“Nothing changes your life more than maybe God or love, than moving your credit score 120 points.”

Operation HOPE has quietly been moving credit scores for its clients an average of 120 points over 18-24 months, and now we are going to do this transformational human capital ‘technology’ work inside of 1,000 HOPE Inside locations — mostly inside of now under-utilized bank branches.

Believe it or not, banks want you to like them. Who wouldn't want you to like them? They actually want to find a way to say 'yes' more often, but they find both restrictions and limitations in their own business model, as well as additional newfound and significant regulatory requirements.

We are going to help them to get back into the yes business for American citizens.

In these locations we will provide — all 100% free to the client — HUD approved mortgage counseling, mortgage mitigation (the restructuring of subprime mortgage loans), certified credit counseling, SBA supported small business counseling and the funding of small business and entrepreneurs, new homeownership training, certification and funding, FDIC encouraged financial literacy, and the bundling of qualified public benefits, like EITC.

Fact: Did you know that if you are a teacher in a small town with say three children, the federal government owes you a cash payment of up to $4000? And more — if you have never filed for EITC (the Earned Income Tax Credit), it can be retroactive for as much as three years? That’s $12,000 for a struggling family, or likely more money than they would ever see at any other one time in their working lives.

Cumulatively, this represents approximately $10B that gets returned every year to the federal treasury, because working class families that qualify for EITC have no idea that they do.

1 out of 4 Americans who qualify for EITC, never even ask for it.

This alone translates into thousands of dollars of lost income for working families, every year. Thousands of dollars that these families need.

Often, you don’t need a bank loan, you just need to claim your own EITC (and if you don’t qualify or need it, I guarantee that someone in your family does).

EITC is for anyone in America making $50,000 or less, but most hard working Americans have no clue it exists. Why? Because most people making $50,000 or less per year have no formal financial advisor, or like me and maybe you — they don’t have the benefit of what is called 'a private banker.’

Our 1,000 HOPE Inside locations are going to become the nation’s private banker to the working man and woman.

The goal of every HOPE Inside location is to graduate its client-customers from a growing collection of HOPE 700 Credit Score Communities, 4-square block area by 4-square block area, clear across the nation.

And when you do this, check cashers will turn into banks and credit unions.

Liquor stores will turn in time into convenience stores, renters will turn into sustainable homeowners, and previously poor and unstable neighborhoods will become emerging markets (with a tax base) in America.

Consider this the equivalent of 'the Starbucks of Financial Inclusion.'

The very vehicle for the “inclusive economics” that President Bill Clinton spoke so eloquently about at our recent HOPE Global Forum before more than 2500 delegates, assembled from across the country and more than 40 countries. And this is not even a new idea. Fact is, it is about 150 years late.

March 3rd, 2015, will mark the 150th anniversary of President Abraham Lincoln’s Freedman’s Bank, which was signed into law and chartered on March 3rd, 1865, to ‘teach freed slaves about money.’

As I explain in depth in a LinkedIn piece here, and a recent companion piece on my Blog here, President Lincoln was killed 5 weeks later on April 9th, 1865, and the newly chartered bank soon lost its way.

Frederick Douglass even tried to save the bank, investing $10,000 of his own money and running it until its ultimate closure in 1874. It was said then that ‘the failure of the Freedman’s Bank did more to set back freed slaves than 10 more years of slavery.'

It's time to begin again.

Today I am in Memphis, Tennessee to open our second HOPE Inside location here, with First Tennessee Bank, a solid institution with ethical leadership. Our first location here was with SunTrust Banks, another bank with great leadership, which started this movement with us across the country, with locations already in Atlanta, Memphis, Washington, DC, Tampa and Orlando, Florida.

Popular Community Bank has partnered to open HOPE Inside locations in every Borough of New York City, PNC Bank is opening in Cleveland, Ohio, Bank of the West, US Bank and Union Bank pioneered locations with us in Los Angeles and Oakland, OneWest Bank just opened in the underserved San Fernando Valley of Southern California, Mutual of Omaha Bank is opening in the underserved communities of Las Vegas, Synovus Bank is planning something special, and Regions Bank and Protective Life Insurance Company opened in Birmingham, Alabama, and soon, Regions Bank will open one in Ferguson, Mo. too. Yes, we are coming to Ferguson, Mo, as the problem underneath their problems in Ferguson are most all rooted in poverty, and what I call “the Opportunity Gap.”

Since November, 2013, 15 major U.S. banks have signed on to launch HOPE Inside locations, or more than 100 location commitments within the first year alone.

The credit bureaus are starting to come on board, with Equifax, led personally by its chairman and CEO, providing HOPE Inside locations nationwide with credit reports at no cost to Operation HOPE. CoreLogic, also.

Even the Consumer Financial Protection Bureau is a national partner in this vision for change, with support from HUD, the U.S. SBA, U.S. EDA and the FDIC too. The FINANCIAL SERVICES ROUNDTABLE, the American Bankers Association and the Mortgage Bankers Association are partners, encouraging their private sector members to engage in our good work.

All of this is part of our overall vision for change in America, by year 2020, called Project 5117. And you can play a role in it, designing and making a Project 5117 Commitment of your own, backed by HOPE!

And so, yes, I may be a dreamer, but to quote my friend, the late Dr. Dorothy I. Height, "I am am dreamer with a shovel in my hands."

Here comes the people's bank -- 150 years later.

Let’s go.

John Hope Bryant is the Founder, Chairman and CEO of Operation HOPE and Bryant Group Companies, Inc. Magazine/CEO READ bestselling business author of LOVE LEADERSHIP: The New Way to Lead in a Fear-Based World (Jossey-Bass). His newest bestselling book is How The Poor Can Save Capitalism (Berrett Koehler Publishing).

Bryant is a Member of the U.S. President's Advisory Council on Financial Capability for Young Americans, co-founder of the Gallup-HOPE Index,and co-chair for Project 5117, which is a plan for the rebirth of underserved America.

Bryant is the only bestselling author on economics in the world who is also of African-American descent.

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Photo Credit: Evan Simko-Bednarski