Credit Builders Alliance gives credit where credit is due

Over the last year, long-term Consumer Action partner Credit Builders Alliance (CBA) has been ramping up its use of technology and innovation to train financial coaches and educators and to help consumers improve their financial capability and build wealth. Consumer Action first reported on CBA’s Training Institute (which was launched last year) in our October 2017 INSIDER newsletter. The institute has since helped many organizations move consumers from poverty to prosperity by delivering training taught by experienced credit practitioners and by helping staff of member organizations become credentialed to deliver trainings to the communities they serve.

“Credit Builders Alliance has done so much good over the last year,” Consumer Action’s Audrey Perrott said. “We’re excited to honor them in October at our 47th anniversary event in Washington, DC. The breadth of CBA’s work embodies the theme of this year’s event, ‘Credit Where Credit Is Due.’” (Learn more about the anniversary event.)

Since launching the institute, CBA has gone on to form strategic partnerships with two major organizations that help consumers financially: the Association for Financial Counseling & Planning Education (AFCPE) and The Financial Clinic. These partnerships are helping to make financial education training more accessible to financial educators, counselors and coaches and to provide enrollees with continuing education units (CEUs). CBA offers full courses, like Credit as an Asset (approved for six CEUs through AFCPE), and mini-courses, like Building Credit Without a Social Security Number and Making Sense of Free Credit Platforms, all in an e-learning, on-demand format. These self-guided trainings include a mix of lectures, interactive Q&As, mastery quizzes and certificates of completion. The courses also include progress trackers, which make it easy for adult learners to resume the lessons at their own pace, since they often have day jobs and family obligations.

In addition to the many educational opportunities it offers, CBA has also become a community development financial institution (CDFI). These organizations play an important role in generating economic growth and opportunity in some of the nation’s most distressed communities by acting as intermediary lenders and injecting capital into these neighborhoods, which traditionally have lacked access to financing. The name of the CBA CDFI is the CBA Fund.

CBA recently launched a pilot for its CBA Fund alongside four community non-profits located in Florida, Oregon, Texas and Washington State. CBA loaned capital to the non-profits at 0% interest. These non-profits will go on to make loans to underserved consumers at a rate of between 5% and 18% interest. Each non-profit within the cohort is required to make a minimum of 10 loans. The average loan amount is between $500 and $1,000. The non-profits are providing ongoing education and support to consumers receiving loans for causes ranging from: re-entry after incarceration (to pay rental deposits, pay off fines, etc.) in Oregon; assistive technology for persons with disabilities in Washington; and household needs (e.g., rental deposits, monthly expenses, back property taxes, etc.) for low-income populations in Texas and Florida.

Finally, CBA launched a pilot with FinTech innovator Nova Credit in May. The pilot will help non-profit lenders to run foreign credit files on consumers who have recently immigrated from Mexico and India, to help them build credit in the U.S. Opportunities remain for non-profit lenders to participate in this pilot (but first they must become members of Credit Builders Alliance).

Consumer Action, Credit Builders Alliance and Nova Credit are all members of the FinTech & Nonprofit Partnerships Working Group, which is administered by the Center for Financial Services Innovation (CFSI) with the support of the Financial Solutions Lab, a program managed by CFSI with founding partner JPMorgan Chase & Co. All three organizations have been busy serving the community: In June, they joined a panel to share best practices with other working group members at the FinTech & Nonprofit Partnerships Working Group pre-conference session of CFSI’s EMERGE Financial Health Forum in Hollywood.

CBA’s Credit as an Asset course costs $225, but is discounted to $75 for CBA members. The mini-courses are $15, and are free for CBA members. CBA also has arranged for a 30-percent discount for AFCPE members and Change Machine subscribers. Finally, CBA is hosting master trainer sessions on Credit as an Asset, giving groups the ability to charge others for the trainings and earn revenue to sustain their financial education programs.

“Credit isn’t just about getting a loan or a better interest rate. It is about stabilizing lives. It also is about knowing how the rules work and using them to improve quality of life,” CBA Deputy Director Sarah Chenven said.

If you’re interested in learning more about CBA and its classes, click here.