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The UNC Center for Community Capital is conducting a three-year study of the impact of a path-breaking initiative to help underserved Latino consumers build savings and creditworthiness.

Effective Money Management/Manejo de Efectivo is a partnership project of the National Council of La Raza (NCLR), Bank of America Corp. and four community nonprofits that delivers basic banking services and products to underserved Latino households while connecting them with a personal financial coach who helps them build savings and creditworthiness.

The center’s research is funded in part by the Annie E. Casey Foundation.

Latino households are among the most underbanked in the nation. A recent NCLR survey in California revealed that 21 percent of Latinos in that state are unbanked. That creates barriers for accessing basic financial services, such as checking and savings accounts, obtaining home loans or building assets and investing. In addition, research shows that individuals who do not have access to traditional financial products and services spend an average $700 a year on service charges for alternative financial transaction services, such as check cashing.

The Effective Money Management/Manejo de Efectivo program seeks to help more Latino households enter the financial mainstream through a one-year program of coaching on budgeting, using banking services, establishing and maintaining credit, building savings, using insurance and protecting assets. Counselors will also work with participants to assess their financial situation, tailor a financial action plan to achieve their financial goals and track their progress over the year.

The project will test product, incentive, outreach and support innovations for encouraging regular savings behavior. Researchers will study the impact of those innovations to provide insight that can shape better policy and industry practice.

Consumer financial services is key area of study for the UNC Center for Community Capital, the leading center for research and policy analysis on the transformative power of capital on households and communities in the United States. Part of the College of Arts and Sciences at the University of North Carolina at Chapel Hill, the center offers research and analysis that helps policymakers, advocates and the private sector find sustainable ways to expand economic opportunity to more people more effectively. For more information, visit www.ccc.unc.edu or call (919) 843-2140.


Topics(s): Consumer Protections, Financial Inclusion, Financial Services Industry, Savings & Asset-Building
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