Nov. 26, 2012
-- The Consumer Financial Protection Bureau’s “Project Catalyst” team invited FlexWage Solutions CEO Frank Dombroski, one of a select group of entrepreneurs with innovations, to its kickoff event in Northern California last week. Project Catalyst, an initiative to support consumer-friendly innovation in the public marketplace, is the CFPB’s answer to developing better policy decisions by gathering entrepreneurs, innovators, consumer trends, and emerging technology. “The results will be demonstrative improvement in the fiscal health of the underbanked,”
Dombroski said. “FlexWage was built on the belief that technology could more quickly transform the lives of the country’s 50 million underbanked workers than legislation. Clearly the CFPB has embraced the same belief. We’re honored to be part of the CFPB’s Project Catalyst.”
Dombroski demonstrated FlexWage’s WageBank employee-managed debit card tool to access earned wages in advance of payday. “Employees who have access to wages earned today can pay bills tomorrow without ever visiting a check-cashing store, payday lender, or other predatory enterprise,”
Dombroski said. “It changes lives, and that’s the mutual goal of the CFPB and FlexWage.” The WageBank tool is available both on the web and via tailored mobile applications for Apple’s iPhones and Android’s smartphones. Consumers without smartphones can choose to use the WageBank toll-free voice-response system.
Estimates show that average underbanked individuals making less than $42,000 per year spend more than $1,000 annually to simply cash checks and pay bills. Further, since they have not been able to build an economic buffer to deal with unforeseen emergencies or short-term cash volatility, they often turn to predatory products such as payday loans between paychecks. The average payday borrower takes out nine loans a year, spending up to $700 for a $325 loan.
More information on the CFPB’s Project Catalyst is available at http://www.consumerfinance.gov/projectcatalyst/
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