finEQUITY

Being incarcerated greatly affects one's credit reputation. The majority of recently released community members will have no recent credit history, and at least 1/3 will have no credit history whatsoever (if they were arrested as a young adult or their score has gone dormant/disappeared due to inactivity). We help the formerly incarcerated attain a visible credit score so they can acquire better outcomes as they search for apartments, job and affordable rates on cars, phones and utilities. We provide digital orientations on how credit impacts them after release from prison, using credible messengers (formerly incarcerated members who have been home and successfully navigated credit and capital issues). And then, we provide a free credit building opportunity designed to ensure they have at least 7 months of positive information on their credit report and have a visible score. 

In the United States, more than 650,000 people are released from prison every year. Formerly incarcerated people have trouble accessing credit and financial products like low interest loans and low cost accounts, making it hard to gain financial stability or build generational wealth.  In New York alone, up to 21,000 people now come home from long-term incarceration every year. The vast majority of those coming home have been away from their families and communities over 10 years. Nearly two-thirds of them are parents. And about 30% of them will end up struggling to access economic security because they have been absent from the credit and finance space. When someone has never used credit or has not used credit in the past 7 years, their credit profile becomes invisible or stale. On top of a lack of recent credit history, returning citizens have not had access to financial knowledge for nearly a decade. In response, finEQUITY has launched two programs that bridge the gap between the racial wealth divide by providing credit education and a recent credit history through our credit builder loan program.

We provide access to a digital course that orients newly released community members to how credit plays a role in their community reintegration process. That course engages participants through digital quizzes and prepares them for our credit builder loan, if this is what makes sense for their situation. If our loan will not help them gain credit history or establish a visible credit score, we connect them with community partners. Our credit builder loan is a no-fee, no-interest loan that is provided to them upfront. Our participants hold on to the loan in their bank account (i.e. Venmo, Cashapp, Paypal or traditional banks). Every month, we collect a small portion of the money back and report that repayment to three major credit bureaus operating within the United States. Every three months, we do a check on their credit to see what the impact has been so that we are measuring our impact. 

The technologies we use including chatbots for our educational digital courses and a set of APIs and form builders to move a participant along the process from course completion to enrolling in our credit builder loan process. The repayments occur through our lending and credit reporting partners.  

Our credit builder loan is best suited for returning community members who don’t have a credit score or who have limited credit history. Our educational offerings are highly valued by formerly incarcerated community members uncertain about how to move forward with credit, credit cards and debt issues. The income levels of our current users range from $5,000 to $45,000 a year. More than 60% of our target users are underemployed or have experienced intermittent periods of unemployment. We understand their needs through community feedback sessions that we have every quarter; we have a proven track record in centering lived experience to ensure that our services are relatable, credible and easy to use. For example, our current digital credit education is voiced, curated and co-written by formerly incarcerated community members. Our organization is led by a governance board made entirely of formerly incarcerated community members. And our implementation team, which handles service design and operations, includes technology and financial inclusion experts working in tandem with formerly incarcerated community members.

All of our current enrollees are on track to obtain a visible credit score and at least 7 months of positive credit history providing equitable opportunity to jobs, visible credit, and generational wealth creation. 

We created a no-barrier digital tool to access no-fee and no-interest credit in order to widen the door of generational wealth and stability. After participating in our credit builder loan, participants can gain access to additional financing (capital) through us, to cover an important reentry-related need (such as a security deposit or job uniform deposit).  While we serve any formerly incarcerated community members (and their closest family members), our work is focused on communities of color due to fact that communities of color are much more likely to be impacted by mass incarceration. 

FinEQUITY formed in early 2020 in Brooklyn, New York after community conversations around the unmet needs of formerly incarcerated community members. In the summer of 2020, we launched a paper-based curriculum focused on financial and credit literacy that we began to disburse throughout prisons (we use software to send our personalized educational materials to over 60 NY state incarcerated residents in New York State). We then launched a digital credit product January of 2021 with over 50 formerly incarcerated individuals joining our pilot program. All of our current enrollees are on track to obtain a visible credit score and at least 7 months of positive credit history.

We built a digital and easy-to-navigate pathway to establishing credit. Through strategic partnerships, we were able to offer our credit builder loan at no-cost, with no-fees, and no interest. Through co-creation with formerly incarcerated community members, we were able to create relatable content and also understand how to make our tools easy to use. We incentivize participation with small digital rewards and increase the digestibility of credit education through SMS engagement, phone check-ins and zoom (video conference) meetings to address any and all questions and barriers for enrollees. Our program is transformational, not only because participants obtain a visible credit score and a long term source of positive credit history, but also because they gain financial capabilities that they can share with their family and relatives. We do expect it to have positive impacts on the space. We hope to encourage other community-based lenders and financial institutions to get rid of burdensome applications and fees that are actually discouraging those coming home from applying. And we hope to impact the private companies who charge for credit builder loans - our goal is to encourage them to get rid of their fees and higher interest for loans that are focused on the most under-resourced communities. That instead, certain critical financial services can be offered for free to then engage communities and build trust so that they themselves feel inclined to adopt additional financial services (such as banking and savings, etc). 

We currently serve around 70 people with all of our services. Our pilot - the credit builder loan, consist of about 15. In one year, we will have around 60 people enrolled. Our marketing is all word of mouth for right now. In 5 years, we want to surpass 600 at the least (through digital marketing and strategic partnerships).  

We envision a world in which a credit score never stops a formerly incarcerated American from prosperity. After building their credit scores and financial capabilities, our formerly incarcerated clients will have: 1) Safe housing: our initiative launched based on conversations with formerly incarcerated community members stuck in a homeless shelter or in insecure housing because they could not pass a credit check (and were even further concerned about affording the security deposit). 2) Jobs: credit checks block job opportunities and job promotions ; 1 in 7 employers run credit checks. 3) Mobility: credit checks block access to affordable cell phone plans and car loans which play a substantial role in getting to work and maintaining employment (in addition to getting to work and maintaining relationships with loved ones). And lastly, 4) Capital: our formerly incarcerated clients will retain more money in their pocket as opposed to it being taken by the extractive economy. Community members with no credit score or a short credit history spend at least $4K a year in extra fees and surcharges (they may spend even more if their only financial service provider available to them are local predatory lenders).

We have two team members working on product and community outreach/ marketing who work around 30 hours. And then we have three technical leads who work on long-term contracts.In addition, we have three short-term software developers (full-stack) who work 30 hours a week. And we have one short-term operations staff member working around 20-30 hours. 

Our leadership team is primarily African American. Our product advisory and governance board is made up entirely of formerly incarcerated community members with strong ties to the United States national prison reentry network of organizations and advocacy groups. Our head of operations has launched three social innovations including enarahealth and Dcrefers.org and has a decade of prison-reentry policy experience. Our technical lead has over 11 years in software strategy and development. 

 finEQUITY’s operations team is led by a community advisory board. Our advisory board members are all affiliated with organizations within the reentry services landscape. Our advisory members are committed to making sure our product roadmap stays responsive to the needs of communities that have been directly impacted by mass incarceration. They also play a role in hiring by recruiting community members with a proven track record of leadership within the community. We intend to bring on a technical co-founder with past incarceration experience, through one of our partners this year after completing fundraising campaigns this summer.

As an organization, we have internal plans to bring on more women, some of whom are formerly incarcerated, to join our governance board. 

We especially want to join solve to help us navigate through our fintech innovation process. As we mentioned, the field of money transfer and payments and even the innovation around financial inclusions is rapidly changing. We want to join solve to capitalize the latest financial capabilities to benefit the communities we serve. 

Above, we explained, designing our financial products is important. We have the user feedback to make sure our products are designed in light of community needs. But we need more financial expertise at the table to help our product innovation. 

We believe that having additional members on our board can also help our growth. We want to continue to have a board that is mostly made up of formerly incarcerated community members. But we believe there are other mission-aligned folks that can add value. 

Our business model needs work admittedly as we hope to sustain ourselves on more than just grants and philanthropy. 

We need more time to look into this. 

We are a pending nonprofit - provide economic opportunity by addressing financial barriers to housing, employment and affordable rates experienced by those coming home from a prison facility. 

We provide economic opportunity by addressing financial barriers to housing, employment and affordable rates experienced by those coming home from a long-term prison facility.