Read about how the Community Financial Services Centre has made a positive financial impact for people like Beryl Raven.
ACU helped make history in November 2006 with the unveiling of a unique Community Financial Services Centre (CFSC) pilot project that is believed to be the first financial services centre of its kind in Canada. It addresses inner-city poverty by offering low-income people an alternative to payday-loan operations, cheque-cashing outlets and pawnshops.
The CFSC is the culmination of many years of planning involving over a dozen Winnipeg organizations.
It began in 1997, when concerned community organizations, including ACU, formed the Alternative Financial Services Coalition to address the issue of access to reasonably priced financial services for low-income people in Winnipeg. Their work led to the concept of a community-based solution for the North End of Winnipeg. With the support of SEED Winnipeg, the North End Community Renewal Corporation (NECRC) agreed to lead the two-year project to develop and pilot the CFSC. Starting in early 2006, a project team from NECRC and ACU worked to complete the design for the CFSC, including specific products and services.
CFSC is unique because it found ways to get around many of the obstacles low-income residents face when dealing with traditional financial institutions, if indeed they are able to at all. For example, many low-income earners lack identification and have been unable to open bank accounts. Without accounts, they are forced to pay high fees to turn cheques into cash.
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“If this centre had not opened we would have made the cheque-cashing places richer and the people poorer.”
That’s how Beryl Raven sums up the tremendous impact the Community Financial Services Centre has had since opening in her inner-city Winnipeg neighbourhood. She figures she saves $100 a month now that she doesn’t have to depend on expensive cheque-cashing outlets. Thanks to the centre she’s also learning how to better manage the money she is saving. Beryl was the CFSC’s first client when it opened in November 2006.Within ten months she was joined by many of her neighbours, including her sisters Edith Raven and Bev Raven-Smith. Along the way, Beryl became the centre’s unofficial community champion. “I get stopped on the street all the time by people wanting to know what I think about it and how they can go there,” she explains. Her sister Bev is equally vocal.
“This place is important to the community because there are too many people who don’t know how to use the banking system and they go to places where they have to pay a big fee,” she says. “There are those cheque-cashing places on every corner in our neighbourhood.”
As many as 10 bank branches have closed in Winnipeg’s core area over the past 15 years. When that happened, thousands of people were left without easy access to affordable financial services. When they needed to cash cheques, get loans or access money quickly they were forced to pay high fees and interest rates at pawnshops, payday loan operations, rent-to-own stores and cheque cashing outlets. A number of concerned community organizations, including ACU, formed the Alternative Financial Services Coalition to address these issues and find solutions.
After several years of research and planning involving many community organizations, the concept of a community-based alternative was born. ACU worked with community partners to help launch the CFSC, the first centre of its kind in Canada.
CFSC clients are referred by community partners in Winnipeg’s North End. The Centre creates client cards (with photo) for them, provides personal financial counseling and assists them to open ACU accounts (ACU covers the cost of their membership). As ACU members, CFSC clients can use special cheque cashing and depositing services to access cash quickly. The next goal is for SEED Winnipeg to offer money-management workshops. The centre started its micro-loan program in August 2007, lending $100 to a parent who needed to buy school supplies.