This just in: Financial Literacy Project a huge success

Consumer Action recently released a final report on the success of our Financial Literacy Project, made possible by funding from the Rose Foundation for Communities and the Environment. The 2015 project awarded $5,000 in mini-grants to six community-based organizations across the country. These groups used the stipends to educate unbanked and underbanked consumers about how to open bank accounts and make wiser banking decisions (including reducing account fees, switching to lower-cost accounts, opting out of courtesy overdraft protection and eliminating out-of-network ATM fees).

The grantee organizations reached a total of 242 clients during the project period and helped these clients open 140-plus bank or credit union accounts. Overall outcomes exceeded expectations in terms of the number of bank accounts opened. “We were gratified to see that an impressive number of participants took real action to improve their financial health by, for instance, adding money to savings accounts, eliminating or reducing fees paid for check cashing services and selecting the right overdraft protection plan,” said Ken McEdowney, Consumer Action executive director.

While the numbers tell a compelling tale, Consumer Action’s report also includes selected success stories narrating the progress that participants made toward financial empowerment as they moved away from wealth-stripping financial services like predatory payday loans and began to use mainstream banking products.

Take Maria, for instance, a young single mother of three who was unbanked due to a negative banking history. Prior to participating in the program, she believed that costly check cashing services were her only option. With encouragement, Maria opened checking and savings accounts at a credit union and learned to manage her accounts properly. She said she now avoids check cashing facilities at all costs. Maria also opened a savings account for her three children, ages eight, nine and 10, so they can learn to save allowance money and get started on the road to financial literacy.

The Rose Foundation-funded educational module, A Wise Choice: Checking and Savings Accounts, proved to be a useful educational tool throughout the project and will continue to make an impact on consumers going forward. (Several community-based organizations have indicated that the module has become the core their financial literacy programs.)

Consumer Action is grateful to the Rose Foundation for its continued support of our financial education initiatives and proud to boast of the Financial Literacy Project’s solid and impressive return. “The project has not only had a huge positive impact on the day-to-day lives of many consumers, but also on their prospects for building wealth and achieving their future financial goals,” noted McEldowney.