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Tag: SB896

SB 896: A Special Policy Briefing

Join MAF’s CEO, Jose Quinonez, in a discussion on the historic passing of California’s SB 896

Mission Asset Fund warmly invites you to our SB 896 Policy Briefing webinar on Monday, September 29 at 10:00 AM PST. MAF’s CEO, Jose Quinonez, will lead the discussion on the historic passing of California’s SB 896 from its initial conception to finally becoming law on August 15th, 2014.

Gov. Jerry Brown, signs the state budget surrounded by Assembly Speaker John A. Peréz, D-Los Angeles, left, and Senate President Pro Tem Darrell Steinberg, D-Sacramento, right, on Thursday, June 30, 2011 at the state Capitol in Sacramento, Calif..

This event is open for all nonprofit staff, policy advocates, and anyone interested in advancing the financial advocacy and asset-building fields. With this law, credit-building becomes the next frontier for asset-based policy.

This is a momentous occasion for us, but an even bigger moment for the asset-building field.

On August 15th, Governor Jerry Brown signed SB 896 into law, making California the first state to regulate and recognize credit-building as a vehicle for good. We will be talking about how MAF and it’s supporters worked to get this new law written, supported, and signed into law.

We encourage you to check out our SB 896 fact sheet prior to the webinar and be ready with questions!

Our discussion will cover the barriers we faced in creating the law, the vital support we received from our partners and community leaders to create momentum for this significant legislation. Finally, we will dive into how SB 896 will pave the way for more hardworking people to access 0% credit-building loans.

Please sign up today to join us on September 29th! REGISTER NOW

SB 896 passes! CA becomes first state to recognize credit-building

It took just 13 months to build the future of nonprofit credit building

In June of 2013, we started laying the groundwork for a piece of legislation that would change the way the state of California thinks about credit-building. Just last week, Governor Jerry Brown signed our bill, SB 896, into law. This is momentous for Mission Asset Fund, but an even bigger moment for the asset-building field. Nonprofit organizations and advocates throughout the state joined SF Treasurer Jose Cisneros and CA Controller John Chiang in support of the bill early on. The bill received unanimous bipartisan support throughout the legislative process, receiving zero votes in opposition.

The passage of SB 896 makes California the first state to regulate and recognize credit-building as a vehicle for good. With this law, credit-building becomes the next frontier for asset-based policy.

Our nation has a long history of legislating policies that help low-income families build assets – from home ownership and investment tax benefits to Individual Retirement Accounts (IRAs) and Individual Development Account (IDA). But until now, credit-building has been largely missing from the discourse around poverty alleviation.

What the 90’s taught us about the need to accumulate savings among low-income households was important; liquid savings is now widely understood to be one of many indicators of the financial resilience of a hardworking family. But when we started Mission Asset Fund, we quickly understood that it would take more than savings to build financial capability in the long run. During the 2007-2009 recession, in a time when mortgages went underwater and personal debt for the lowest income Americans soared, our nation learned even more about credit and debt. 64 million Americans don’t have credit scores right now. That means they don’t have equitable access to things like low-cost bank accounts or prime-rate loans. In fact, many of them can’t even qualify for IDAs, affordable apartments or sometimes even jobs. Their choices are limited to fringe and predatory financial services that entrap them in a cycle of high cost debt.

That’s why our vision was to create a new law that – for the first time – would establish and regulate innovative credit-building approaches so that nonprofits in California could band together to change the financial marketplace for the better. Key elements of SB 896 include:

  • The State of California declares that nonprofit organizations have an important role to play in helping individuals obtain access to affordable, credit-building loans
  • A licensing exemption within the California Finance Lenders Law (CFLL) for 501c3 nonprofits facilitating zero-interest loans of up to $2,500
  • Nonprofit organizations will be able to apply for exemption to provide zero-interest loans, as long as they meet other criteria like provide credit education, report to national credit agencies, open books to the Department of Business Oversight upon request, and annually report lending data to the DBO
  • Recognition of partnerships between nonprofits as an effective strategic way to scale reach and impact throughout the state

SB896 provides regulatory assurance to programs like MAF’s Lending Circles, a social loan program which has provided over $3 million in zero-interest loans to clients nationwide. We are extremely grateful that Governor Brown recognized the enormous potential of the nonprofit sector in helping millions of underserved Californians realize their true economic potential. The enactment of SB896 means that more nonprofits will work with low-income Californians by providing them access to responsible loans, loans that will set them up for success and set them on a path to financial security.

California is now the first state to recognize credit-building loans as an important community-based solution to creating access for the underbanked.

SB896: One signature away from history

After months of movement through the California Senate SB 896 has officially been sent to the Governor for final approval.

Mission Asset Fund is thrilled to announce that as of this morning, after more than a year of movement through the California legislative process, we are a single pen stroke away from SB896 becoming law.

MAF was sent notification that SB896 has moved through the engrossment process and is now on it’s way to Governor Brown’s desk to receive final approval!

We want to thank everyone who has been involved in this long, intricate process. Through your support, we are only one signature away from creating a new and better lending space for hardworking families that supports sustainable scaling and collaboration between micro-lenders statewide.

Now we need to make sure that SB896 gets signed! We sent a letter to Governor Brown yesterday afternoon to ask him to finalize this legislation. Read the letter below.

August 4, 2014
The Honorable Edmund G. Brown, Jr.
Governor, State of California  

RE: SB896 (Correa)

Dear Governor Brown,

On behalf of Mission Asset Fund, we respectfully request that you remove unnecessary barriers to the financial mainstream by signing SB896 into law.

SB896 has overwhelming support from public leaders, nonprofit organizations and policy advocates across the state for its potential to create new opportunities for culturally relevant financial products and services to help low-income Californians realize their true economic potential.

Close to 1 million California families are in the financial shadows without access to the most basic mainstream financial products like checking or savings accounts. According to CFED, 57% of California consumers have subprime credit scores, making loans more costly and inaccessible to low-income families. Indeed, millions of Californians are forced to subsist on the financial fringes, struggling to access responsible financial tools to build their financial security.

SB896 would set a major precedent by recognizing and legitimizing the work in small-dollar lending and credit building fields. The bill will establish a licensing exemption within the California Finance Lenders Law (CFLL) for nonprofit organizations like MAF that facilitating zero-interest loans and provide financial education.

In the past 6 years, MAF has facilitated over $3.0 million in social loans through the tested and proven Lending Circles Program, allowing thousands of clients to improve their credit scores and to have access low-cost loans. MAF serves clients directly in the San Francisco Bay Area and indirectly through partnerships with other nonprofit organizations statewide.

The enactment of SB896 will encourage more nonprofits to help financially underserved Californians. The bill will recognize efforts by nonprofits to network and collaborate together to lower the cost burdens of providing lending services in their own communities.

SB896 has gained widespread support from the following public leaders, organizations, and advocates:

Asian Law Alliance
CA State Controller, John Chiang
California Association for Micro Enterprise Opportunity
Californians for Shared Prosperity Coalition
Calexico Community Action Council, Inc.
Center for Asset Building Opportunities
Centro Latino for Literacy
Family Independence Initiative
National Council of La Raza
Office of the Treasurer & Tax Collector City & County of San Francisco
Opportunity Fund
Pilipino Workers Center of Southern California
Progreso Financiero
Salaami Firm
San Francisco City Supervisor, David Campos
The Greenlining Institute
Watts / Century Latino Organization

We are grateful for your leadership on this critical issue. SB 896 is a strong step forward in helping millions of Californians living in the financial shadows become visible and successful consumers.

Jose Quinonez, CEO