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Kansas City Region - Money Smart Model Sites
(Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, and South Dakota)
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Contact: |
Community Affairs Officer
Federal Deposit Insurance Corporation
2345 Grand Boulevard, Suite 1500
Kansas City, Missouri 64108
(816) 234-8000
(800) 209-7459 |
El Centro, Inc.
El Centro, Inc. (El Centro), located in Kansas City, Kansas, serves as one of the Kansas City Region Money Smart Model Sites. This organization provides social services to Latino immigrants living in the Kansas City metropolitan area. The FDIC-El Centro partnership focuses on the following goals: assimilate Latino immigrants into the American financial system; enable Latino immigrants to open bank accounts; foster access to asset building opportunities for Latino immigrants; provide guidance to banks on serving Latino clientele; and promote awareness of the Latino market to financial institutions. FDIC's partnership with El Centro employs a comprehensive asset building strategy. Those benefiting from financial education classes may also access complementary services that enable immigrants to accumulate wealth. El Centro clients can deposit the refunds they secure from the free tax preparation services in to Individual Development Accounts, and in turn use account monies to purchase an inexpensive home through one of El Centro's targeted mortgage loan programs. Latino immigrants, and other clients residing in the Kansas City metropolitan area, may benefit from financial and other related services offered by El Centro. The purpose of El Centro and its subsidiaries is to create and sustain educational, social and economic opportunities for families. One of its objectives is to revitalize the inner city of Kansas City, Kansas and reduce its clients' dependence on predatory lenders and contract for deed schemes.
In 2005, El Centro won a Family Strengthening Award from the Annie E. Casey Foundation. The $10,000 grant will fund El Centro's Home Ownership Center which provides low-income Latino families with homeownership counseling services and other financial solutions to homeownership and home maintenance.
Partners
El Centro was granted 175 slots of The Family Conservancy's Individual
Development Account (IDA) program, and teaches Spanish Money Smart classes
to fulfill the required financial education for account holders. Applicants
for El Centro's special home loan programs, designed for clients with
alternative credit histories and geared toward revitalizing the inner
neighborhoods of Kansas City, Kansas, must complete Spanish Money
Smart course
requirements. FDIC also partners with El Centro on its free tax preparation
through its Volunteer Income Tax Assistance and Low Income Tax Clinic
programs. FDIC and El Centro have also offered four Feria de Finanzas
(Banking Fairs), for immigrants wishing to open accounts. At prior
fairs, several financial institutions that accept alternate identification
such
as the matrícula consular and the Individual Taxpayer Identification Number,
were present to open accounts. In addition, representatives from the
Internal Revenue Service and the Mexican Consulate processed applications
for the
two aforementioned documents.
El Centro offers fixed and variable rate mortgage loan programs, with down payment assistance, for those clients who cannot obtain financing through a traditional lender, such as those who do not possess a Social Security number. It also offers loans to families that have saved down payments, demonstrated creditworthiness through regular payment of rent and utilities and a steady record of employment, and resolved any credit issues through long term collaboration with El Centro's homebuyer education program. Prospective borrowers must have a 10 percent down payment, and pay for closing costs, although these may be financed with the loan. Also, borrowers may open a Individual Development Account and use the funds for down payment. They must also attend Money Smart financial education classes. Brotherhood Bank, an FDIC-supervised institution, provided a $500,000 line of credit to make the initial 10 loans. Gold Bank, Bank Midwest, and Neighborhood Reinvestment Corporation have also assisted with loan financing. Other partners include Central Bank, North American Savings Bank, First National Bank of Olathe, Douglass National Bank, Capitol Federal Bank and Bank Midwest. Neighborhood Reinvestment Corporation, Local Initiatives Support Corporation, and the Kauffman Foundation provide administrative support dollars. For a listing of model site partners please select Financial Institutions or Other Partners.
In 2007, UMB, N.A. agreed to provide $20,000 in funding for IDAs for
home purchases. The program will match every $1 saved with $2 for eligible
participants. The funding will fund approximately 25 IDAs.
Accomplishments
- Since 2002, $900,000 in tax refunds were disbursed back to 750 El
Centro clients.
- An estimated 20,000 bank accounts have been opened as a result of
the ferias and helping financial institutions understand the Latino
immigrants market.
- Families have opened 175 Wyandotte Individual Development Accounts
with approximately $300,000 to be used for home purchase, entrepreneurship,
or homebuyer education.
- Approximately 600 individuals have attended Money Smart classes.
- El Centro has made special home mortgage loans for approximately $2 million to Money Smart students purchasing homes in the Kansas City, Kansas inner city.
The Family Conservancy (formerly Heart of America Family Services) Model Site
The Family Conservancy (TFC) Model Site in Kansas City, Missouri, is
also located within the FDIC Kansas City Region. TFC is one of the oldest
and largest nonprofit social service agencies in Greater Kansas City
with a
primary focus on families. Over 120,000 people are served annually by
TFC programs, which focus on asset building, counseling, early childhood
education, and family support. TFC contracts with housing authorities
and nonprofit organizations to provide counseling and educational services
to residents. Through the Individual Development Account (IDA) and Ways
to Work Automobile Loan Programs that it offers, TFC enables low income
individuals, including immigrants, to access asset building opportunities.
Individual Development Accounts (IDA)
TFC
is the largest administrator of Individual Development Accounts (IDAs)
in the Kansas City metro area, offering over 900 (this is a historical
number; current number is about 100) accounts with $1 million in committed
funding attached. IDA participants must
attend classes for
all ten Money Smart modules to keep their accounts. Clients' deposits
are
matched two-to-one. Participants may only expend account proceeds for
home purchase or home repair, entrepreneurship or secondary education.
TFC recruits IDA participants
from organizations such as the El Centro Model Site, Rose Brooks Center,
a local shelter for homeless women, and the Kansas Department of Social
and Rehabilitation Services. Money Smart classes are regularly taught
at TFC headquarters, as well as at the Rose Brooks Center and El Centro.
US
Bank, the host bank for the accounts, agreed to modify its requirements
for IDA participants with impaired credit histories. Applicants are required
to maintain a two year, rather than the traditional seven year, clean
Chex Systems history. TFC also works with FDIC on the Volunteer Income
Tax Assistance
(VITA) initiative, which provides free tax preparation for lower income
individuals. TFC will allow tax refund deposits to be matched up to $1600
per account. For a listing of model site partners please select Financial
Institutions or Other Partners.
In 2003, the FDIC
worked with TFC to spin off ten IDA slots to the rural community
of Emporia, Kansas. FDIC had been working in this small town for
years attempting to bring financial education to immigrants and other
meatpacking
plant workers. The Ewing Marion Kauffman Foundation, the main funder
of the IDA programs, agreed to provide $8,000 for the Emporia accounts
as an experiment. IDA programs in rural communities are scarce, and
the foundation established the fledging IDA program as a future model.
Emporia Community Housing Organization (ECHO), a Community Housing
Development
Organization, administers the accounts. ECHO is a community based
organization devoted to providing low income housing to Emporia residents.
ECHO purchases
and rehabilitates affordable homes. Emporia State Bank, a local FDIC
supervised institution, hosts the accounts. In 2004, TFC partnered
with First State Bank of Kansas City, Kansas to offer a home repair
IDA program for homes located in Kansas City,
Kansas.
In 2005, The Family Conservancy expanded its FAB program to offer 87 IDAs to participants in two geographic areas, Johnson County, Kansas, and Kansas City, Missouri. The 50 Johnson County and 37 Kansas City, Missouri participants will save up to $2,000 at a $2 to $1 match rate, for a total savings of $6,000. Approved asset purchases will include first time home ownership, post-secondary education or training or, small business development.
Ways to Work Automobile Loan Program
In 2004, TFC became a participant
in the national Ways to Work loan program. The Ways to Work program provides
small loans to low-income families that are commonly used for automobile
purchase or repair, mortgage or housing expenses, or child care to help parents
keep a job or stay in school. TFC uses the funding it received from the national
program for automobile purchase loans. The maximum loan amount is $4,000.
To date, 73 automobile loans have been originated for a total of $253,217
have been funded, and half of the loans has been paid in full. Participants
must attend all 10 Money Smart modules to qualify for an automobile loan.
Accomplishments
- 9,000 hours of Money
Smart financial education training completed by 876 individuals
- 953 IDAs funded
- 1,409 individuals
have opened IDAs
- 404 individuals
have successfully exited the IDA program
- 168 IDA participants
used savings to purchase a home
- 175 IDA participants
used savings for post-secondary education
- 78 IDA participants used
savings to start or expand a small business
- 27 IDA participants used
savings for home repair
- 27 IDA participants transferred
savings to Individual Retirement Accounts
- 73 automobile loans originated
through the Ways to Work program
- $951,000 saved by Money Smart students
- $2,722,250 total potential participant savings
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