Renewal Financial Services, LLC, is specifically focused on building networks that improve the availability and accessibility of a comprehensive portfolio of financial services to unbanked, underbanked and thin-file consumers. Our efforts are carried out through the effective and efficient delivery of financial education, products and services available through our network partners. We serve as a catalyst for change and collaboration at the point of service within the community. According to the United States Federal Reserve and Federal Deposit Insurance Corporation (FDIC), the fringe financial service market consists of consumers who are predominately unbanked, underbanked and thin-filed. This market also includes:
- Twenty-eight percent (28%) of the adult American population
(53% of whom are African-American and Hispanic)
- An estimated 80 million people in the U.S. with credit scores of 660 or below
- An estimated 54 million individuals with no credit score or a “thin” credit file
- Consumers who live in income polarized communities where mainstream financial service organizations have either left the market or have seriously curtailed their offerings
- People who live in communities with cash economies and believe a bank account does not make sense for their cash-driven transactions
- Individuals who live in communities that have high debt-to-income ratio, lower levels of education causing higher unemployment rates and income fluctuations, experience extraordinary special needs such as major medical bills, cash purchases of household appliances, incarceration, etc. and lack financial discipline and/or foresight
- Consumers who live in communities that often require them to rely on sub-prime mortgage companies, pawn stores, check cashing outlets, rent-to-own merchandisers, payday advance loan companies, auto title loan firms and refund anticipation loan organizations to meet their financial needs
While banks and other mainstream financial service institutions may be available to some consumers in this market, most people often lack access to these services. Although many factors contribute to their inability to access mainstream financial services, the most common reason is low credit scores. This score is vital to obtaining credit, employment, insurance and many other necessary goods and services.
For institutions that use credit scores as a factor in their lending decisions, scores that fall below certain numbers may result in the outright denial of credit or credit being offered at a higher interest rates. According to research, the vast majority of communities with low credit scores share similar characteristics, including lower educational attainment (secular and financial), higher rates of unemployment, lower family median incomes, higher rates of poverty and challenges in paying debt on time. Disproportionately, these communities are populated by minorities, African- and Hispanic-Americans. These conditions cause extraordinary financial disparities between those who have prime credit scores and those who have sub-prime scores. A partnership within our network addresses this situation by offering financial education, banking, credit, mortgage and community development services.