PHILADELPHIA, Sept. 18, 2015 (GLOBE NEWSWIRE) -- The Wells Fargo NEXT Awards for Opportunity Finance today awarded nearly $6 million to improve financial product offerings and services to consumers. Through investments in six community development financial institutions (CDFIs) the NEXT Awards aim to transform how the underbanked and unbanked in Native, immigrant, rural, and urban communities get responsible personal financial products and services.
The winning CDFIs have demonstrated how their common-sense budgeting, savings, and credit products can address the more than 25% of households across the country who are turning to high-cost financial products and services because they do not have access to responsible ones.
"At Prudential, we've always been dedicated to helping people build long term financial security, and our support for the NEXT Awards is an expression of that commitment," said Lata Reddy, vice president, Corporate Social Responsibility, Prudential Financial, Inc. "We're proud to invest in the winning CDFIs and applaud their efforts to expand access to critical, affordable financial products and services in underserved communities. These organizations are helping create new pathways to prosperity where they are needed the most."
This year's NEXT Awards recipients represent all sectors of the financial services industry and are using every tool in their toolbox—technology innovation, in-depth market knowledge, new credit and savings products, and partnerships with nonprofits and for-profits—to respond to the threats against unbanked and underbanked communities from all angles.
The multimillion dollar NEXT Opportunity Award recipients are CDFIs with powerful consumer finance strategies that are ready to be implemented. The Awardees are:
Sunrise Banks (Minneapolis, MN)
Sunrise Banks won a $2.2 million NEXT Opportunity Award to expand TrueConnect, a small-dollar, affordable employer-based loan. The convenient alternative to predatory loans integrates with employers' payroll systems through proprietary software that Sunrise and its technology partner designed to scale. Sunrise successfully piloted True Connect with three employers and plans to expand the product nationally, starting with new employer partnerships in Ohio, California, and Minnesota.
Freedom First Federal Credit Union (Roanoke, VA)
Freedom First Federal Credit Union (FFFCU) won a $1.725 million NEXT Opportunity Award to expand its new low-cost workforce development loan to tackle high poverty and unemployment rates in areas of rural Virginia. Piloted in partnership with a tractor-trailer training program, the loan offers affordable short-term financing for job certificate or licensing programs that give people a better chance at obtaining or advancing in livable wage jobs. The loan also exposes borrowers to FFFCU's full range of consumer financial products and services, which can help individuals and their families get ahead. The credit union plans to expand this product into more fields, such as healthcare and welding, through partnerships with additional employers.
Lower East Side People's Federal Credit Union (New York, NY)
Lower East Side People's Federal Credit Union (LESPFCU), New York City's largest community development credit union, won a $1.725 million NEXT Opportunity Award to expand its full range of consumer financial products and services to three neighborhoods—Manhattan's East Harlem; Jackson Heights in Queens; and Staten Island's North Shore—where there is great need for affordable, responsible financial services, loans, and education. LESPFCU's expansion strategy of opening new branches, expanding its innovative mobile bus services, and developing new community partnerships can serve as a model for other community development credit unions. The CDFI's membership is primarily low-income immigrant communities.
The NEXT Seed Capital Award recipients each received a $100,000 NEXT Seed Capital Award for their start-up consumer financial services strategies:
Citizen Potawatomi Community Development Corporation (CPCDC) is leading efforts to eradicate predatory lending in Native American communities across Oklahoma and among members of Citizen Potawatomi Nation (CPN) tribal community nationwide. CPCDC will use the seed funds to expand its Employee Loan in CPN and among other tribal communities, and to launch a home improvement loan and a storm shelter loan for tornado-prone areas.
Justine PETERSEN is creating opportunities for consumers to access affordable consumer credit and improve financial health by expanding two loan products—a credit building product and a small dollar loan product—into new geographies. By offering these loans through nonprofit partners and in more states, Justine PETERSEN will leverage the products to help hundreds of thousands of consumers access financial counseling and responsible products that improve credit scores and change lives.
The Disability Opportunity Fund (DOF) is marking the 25th anniversary of the Americans with Disabilities Act by supporting implementation and rapid adoption of the new ABLE account (Achieving a Better Life Experience). The first-of-its-kind account will allow people with disabilities to accumulate savings without losing Medicaid and Social Security benefits. DOF was influential in the passage of the ABLE Act in 2014 and the recent IRS guidelines which highlight CDFIs as a vehicle for administering these accounts. DOF will use its NEXT Seed Capital Award to act as a clearinghouse of resources for the ABLE account, work with policymakers to influence the structure of the account, and help position CDFIs to play a key role in implementation.
"At Wells Fargo, we know that we can only be as successful as the communities we serve. These CDFIs are promoting healthy financial practices by helping customers establish good credit and savings habits and we share this common vision to educate underserved consumers about banking products in order to create long-term economic growth and improved quality of life for members of our communities. We applaud and congratulate this year's winners," said Lesley Milovich, EVP, head of Wells Fargo Community Lending and Investment.
"The winning strategies represent the future of opportunity finance and innovation in responsible banking," said Mark Pinsky, president and CEO of Opportunity Finance Network (OFN), the nation's premier CDFI network.
OFN presents the NEXT Awards in partnership with Wells Fargo and Prudential and support from the John D. And Catherine T. MacArthur Foundation and the Kresge Foundation.
For more information visit NEXTawards.org.
CONTACT: Jackeline Stewart 215.320.4306 firstname.lastname@example.org
Source: Opportunity Finance Network