Bridges Spring 2014

Bridges is a quarterly review of regional community and economic development issues, projects and regulatory changes for practitioners from community-based organizations, as well as for Community Reinvestment Act officers, academics and government of

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I N D E X T H E F E D E R A L R E S E R V E B A N K o f S T . L O U I S | C E N T R A L T O A M E R I C A ' S E C O N O M Y S P R I N G 2 0 1 4 5 8 10 Enrollment, Student Debt and LMI Communities CDAC Spotlight: We've Met the Solution, and It Is Us West Tennessee Day Trippin': Rural Tourism Campaign Builds Regional Partnerships for Community and Economic Development By Leigh Phillips I n recent years, city governments have developed new strategies to improve the financial stability of low- and moderate-income households. e city of San Francisco believes in the unique capacity of local government to build economic fairness and inclusion, and the city has been at the forefront of this work over the past decade. e San Francisco Office of Financial Empow- erment (SF OFE) was created to lever- age the power of city hall to increase financial security—and economic opportunity—for all San Franciscans. e United States has two financial systems. In the first—the financial mainstream—the majority of people enjoy access to the types of financial products and services that help them manage money, establish credit and build wealth: checking and savings accounts, credit cards, mortgages and prime-rate loans. is is a system that Local Innovation, National Impact: Engaging Municipal Government in Financial Empowerment Lessons Learned from San Francisco creates upward mobility and allows people to invest in themselves and their families. But there is another system—the financial fringe—that strips wealth from those who can least afford it. ese households, disconnected from the financial mainstream, rely on check cashers, payday lenders, rent-to- own stores, pawnbrokers and auto-title lenders. ese products and services charge exorbitant fees and can mire people in a cycle of debt. More impor- tantly, they do not encourage upward economic mobility. In the United States, more than 25 percent of people rely on fringe finan- cial products. at number increases to 50 percent of African-American households and more than 40 per- cent of Hispanic households. Even in wealthy San Francisco, one in three children are born into families with no savings or assets of any kind, and more >> continued on Page 3 "In the United States, more than 25 percent of people rely on fringe financial products."

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