I believe our work is more important now than ever.
A growing number of families across the country face chronic economic insecurity, unable to stabilize their financial lives and get ahead. Over half of Americans experience volatility in their income and bills, and more than half either break-even or spend more than they make in most months (Pew 2015). And while parents struggle to achieve economic security, their children face a life of diminishing upward mobility (Pew, 2012).
In San Francisco, these challenges are acute. Dramatic income and wealth inequality increasingly divides those at the center of the city’s booming economy from those at its margins, particularly communities of color. 170,000 San Francisco families (47%) are financially insecure, with less than $2,000 in savings (Urban Institute, 2017).
Achieving economic security is not only a critical challenge for San Francisco residents—the financial health of the city depends on it. When families experience a financial shock, they are more likely to miss bills, face eviction and fail to meet other financial obligations that are often ultimately borne by the city. The Urban Institute estimated the cost to San Francisco from evictions, and unpaid property taxes and utility bills at $24-$54 million in 2016.
Families striving to achieve economic security need policies that enable them to build wealth and resiliency, and address predatory practices that strip what few resources they do have. Given the current federal government’s retreat from consumer financial protection and policies that support a fair and inclusive economy, we believe cities are more important now than ever and the work of the OFE imperative.
So, with a new strategy to guide us and renewed commitment, we are sharpening our focus on those struggling most, marshaling finite city and philanthropic resources, and working in concert—in new ways—with public, private and nonprofit allies to strengthen the economic security and mobility of low income families.
Roberto left his home in Michoacán, Mexico in 1993 and migrated to the Bay Area, hoping to find safety and greater economic opportunity. He found a job as a farmworker, got married and had two daughters. However, as an undocumented immigrant, Roberto has faced challenges in achieving economic security, unable to access safe financial products and services for him and his family.
The San Francisco Bay Area has welcomed 1.4 million immigrants over the years, about 40% of them undocumented. As a sanctuary city, San Francisco legally protects its undocumented immigrants but many barriers to economic security persist for immigrants and are more acute for those who are undocumented.
Access to formal financial services and products plays a significant role in economic stability and mobility, but can be inaccessible for immigrants, with many barriers from language to restrictive ID policies. Trust in institutions has also declined rapidly in the new federal climate and undocumented immigrants are retreating into the shadows to protect themselves and their families. This makes it more important now than ever for local governments, non-profits and the private sector to design financial programs, products and policies that are safe and inclusive for immigrant families.
Use of predatory financial services has put Roberto’s financial security and personal safety at risk. Until recently, he relied on check cashers to cash his paychecks, a service that came at a high price. Each check cashed meant a loss of $20 to $30 in income to meet his family’s needs. Carrying cash made him a target; he has been robbed twice. But recently Roberto was able to access financial counseling at the Mexican Consulate’s Ventanilla de Asesoría Financiera, a joint effort between the Consulate, Mission Asset Fund (MAF), and the San Francisco Office of Financial Empowerment (OFE), with support from Citi Community Development. With help from a MAF financial coach at the Ventanilla, Roberto learned how and where to open a safe, affordable bank account to deposit his paychecks and start building his credit.
Innovative programs like the Ventanilla ensure that everyone has access to financial services to keep their money safe and reduce reliance on wealth-stripping predatory practices. For the OFE, it is important that financial programs, products and services are inclusive with features that specifically meet the needs of our immigrant families. For example, our Kindergarten to College program is designed as an opt-out custodial account, requiring no citizenship information or ID for student participation. Bank On San Francisco sets local standards for participating banks and credit unions that enable immigrants to open accounts with alternative IDs.
The OFE will continue to work with partners to address challenges faced by immigrants and feels urgency in prioritizing and meeting their financial needs so they feel financially safe and secure in our city.