No Bank Account And No Car: Simulation Provides An Up-Close View Of Poverty
Whether it's cashing a check, wiring cash to a friend, or trying to borrow money, people living in poverty have a different experience than those on sound financial footing. One North Texas nonprofit aims to close that gap by giving those with financial means, a taste of life without.
A financial experience
Catholic Charities Fort Worth hosted the workshop, which on its face has a simple mission. It's called "Fin X" short for financial experience and it's designed to show working professionals, like people from nonprofits, banks and law firms, how the other half lives. Instead of watching a documentary or listening to a lecture though, these 40 workshop attendees take to the streets.
Their goal? Cash a couple of provided checks, complete a dozen tasks and come away with an understanding of the challenges many people are up against. And speaking of challenges: For this simulation, nobody has a bank account, social security number or a car.
Most of the groups are using Uber to get around. Some people, like Kimberly Lawrence, Neal Shields and Al Comeaux, are doing the whole simulation on foot.
Their first stop was the nearest Chase Bank to cash a $70 payroll check. Since the checks were issued from a Chase account, they figured they could cash them there for free. Al Comeaux says, that didn't turn out to be the case.
"Kimberly was able to write the check over to Neal, Neal deposited it into his account, and we got all of the money out,” he said. “Otherwise, we would have has an $8 fee on a $70 check."
If a team member hadn't been a Chase Bank customer in real life, they would have been out $8.
They had a lot of other tasks, like buying groceries, sending a wire transfer, asking about taking out a cash loan, buying a reloadable prepaid card and picking up a money order. They hit a snag on that one.
"We needed a money order, we ended up getting two because we made a mistake,” Comeaux said.
“And well, in having made that mistake, it cost us another dollar, because we got it for $10 and then realized it was supposed to be $20, and so we had to pay another 99 cents to get it,” Lawrence said.
And those are the little frustrations the folks on this team felt the whole day. Their prepaid card came with a $6 fee attached, plus another fee to run a transaction. And they were startled by what it cost to rent a mattress by the week, another task on the list.
"A twin mattress costs $453, which I think is pretty expensive, but if you pay the minimum payments you're going to actually end up paying $755.” Comeaux said.
The folks on this team say it was a taxing couple of hours, and it was even tougher because they weren't just zipping all over Fort Worth in their cars.
Running out of time
This poverty simulation had a hard deadline too, so this team wasn't able to tick off every item on the list. They ran out of time before they were able to buy diapers and wipes. They were supposed to visit a pawn shop and they couldn't re-load their prepaid card.
Theresa Schmall is with the Center for Financial Services Innovation, which puts on "Fin X." She says for the people who attend these events, falling short is a great way to learn.
"We have anyone from regulators, to bankers, to credit union providers, to nonprofits participate in these to really better understand the folks that they're trying to help,” said Schmall.
And part of understanding people means checking biases at the door. Biases against places like check cashers.
“Or to realize that they're not inherently bad. A lot of times people go to a check-casher because it's someone in their community who knows them and they walk in and they're greeted by their first name, they know exactly what fee to expect, they're super transparent, they're never surprised,” Schmall said. “It's a very different experience than you might expect if you've not personally gone through it.”
A lot of people never will go through that. Forty people in Fort Worth can now say they have.