The California Department of Business Oversight (DBO) announced the launch of CalMoneySmart. This $4 million grant program was set in motion by SB 455, introduced by Senator Steven Bradford (D-Gardena) in 2019, which created the California Financial Empowerment Fund to remove financial barriers and improve monetary security.
“Too many Californians are forced to turn to high-cost products and services to meet their financial needs in an emergency,” said Senator Bradford. “The financial market is already a challenging sector to navigate. The COVID-19 crisis has only made things more difficult. It is my hope that this program will set a framework leading to generations of financial security in our communities.”
According to the most recent Federal Deposit Insurance Corporation’s Survey of Unbanked and Underbanked Households, approximately 7% of California households are unbanked, and another 18% are underbanked. Even though two-thirds of California’s households are fully banked, only half of California households save for unexpected expenses or emergencies, and many of those who save still lack the money necessary to cover a $400 emergency expense. Californians, on average, carry $10,500 in credit card debt, the fourth highest in the nation.
SB 455 (Bradford, 2019) empowered the Department of Business Oversight (DBO) to direct necessary funds to nonprofit organizations that offer responsible financial products and services to underserved Californians. Specifically, SB 455 created the California Financial Empowerment Fund (FEF) and authorized the Commissioner of Business Oversight to award grants of up to $100,000 to non-profit organizations that offer financial education, financial coaching, products, and/or services to un- and underbanked individuals free of charge.
The first round of funding for CalMoneySmart will be released on July 1, 2020.