Financial Inclusion Efforts Can Provide a Brighter Future for Low-Income Residents

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This post was co-written by Courtney Coffin. Courtney is the senior associate for financial inclusion in the NLC Institute for Youth, Education, and Families.  

This is the first post in a new blog series on financial inclusion. This series will explain what financial inclusion is and provide examples and action steps to help city leaders start or strengthen financial inclusion efforts.

As many city leaders can attest, recovery from the 2008 recession has been uneven in communities across the country. Many families remain financially vulnerable, unable to cover monthly bills or save adequately for emergencies.

The Corporation for Economic Development (CFED) found that 43 percent of U.S. households do not have a basic safety net — enough savings to cover basic expenses for three months — to weather emergencies such as a sudden job loss or medical crisis, or to prepare for future needs, e.g., a child’s college education or homeownership.

Additionally, a 2013 national survey from the Federal Deposit Insurance Corporation (FDIC) revealed that 28 percent of U.S. households either do not have a bank account at all, or do have one but also rely on alternative financial services such as payday loans or check-cashing services.

Individual and family financial instability jeopardizes the overall well-being of families and the health of local economies. Without financially stable residents, cities generate less money from property taxes and can lose revenue from unpaid public utility bills. Diminished health and education outcomes and higher foreclosure rates are also related to financial instability.

FI_QuoteConcern about the consequences of this instability has spurred many cities, including Columbia, S.C., Lansing, Mich., San Francisco and St. Petersburg, Fla., to implement robust financial inclusion strategies.

Financial inclusion strategies, such as Bank On programs, financial empowerment centers and children’s savings accounts, can bolster a city’s fight against poverty and help low-to-moderate income individuals and families move toward brighter, more economically secure futures.

NLC’s recent report, City Financial Inclusion Efforts: A National Overview, identifies seven key findings resulting from an in-depth scan of financial inclusion programs in cities across the U.S. The report explains the importance of city-led interventions to help families build financial stability, and highlights the role local elected officials and city leaders play in shaping innovative strategies to address the economic, public safety and personal concerns that are byproducts of family financial insecurity.

BUILDINGBLOCKSsmalltable_web-version_SorenA key finding from NLC’s scan was that financial inclusion strategies are best delivered through a comprehensive municipal framework built on strong city support, vision and leadership. Our report, which this blog series draws on extensively, illustrates that if key systems are in place, any city can become a major player in this arena.

The report and this blog series lay out an array of actions any city leader can take to leverage resources and expertise, regardless of a city’s level of experience with financial inclusion or related financial empowerment strategies. Each of the upcoming posts in this series will focus on one or two fundamental elements that the report offers as key building blocks for developing a city-led financial inclusion system.

Additionally, a guest post by a city leader from a community with a comprehensive financial inclusion program in place will highlight how these practices benefit residents, the local economy and the community overall.

Mara Heneghan
About the Author: Mara Heneghan is a summer intern with the NLC Institute for Youth, Education, and Families. Contact Mara at