Business Insider – What to Know About Second Chance Banking
First Step Alliance has published several articles highlighting systemic issues of discrimination in mainstream financial services for formerly incarcerated individuals. There is increasing media attention to these challenges, including from Business Insider in their recent article, “What to know about second chance banking — and how it opens up access for formerly incarcerated and underserved groups.”
The article broadly covers second chance banking and its impact on bridging gaps that affect people of color and low-income communities. First Step Alliance was interviewed to provide additional insight on "the role of second chance banking in providing financial freedom for formerly incarcerated individuals." Our Founder, Nancy Eiden, talked about the high percentage of recently incarcerated people who are unbanked or underbanked both prior to and following their incarceration. She further elaborated that when these individuals try to open a bank account, they may be denied because they don't have proper identification or because of their criminal history. Those who had bank accounts before incarceration also might experience an involuntary bank account closure due to inactivity or significant fees. The article also mentioned First Step Alliance's efforts to start a credit union dedicated to meeting the financial needs of formerly incarcerated individuals and their families. The initial application for this new credit union was submitted to the National Credit Union Association (NCUA), the credit union industry government regulator, in early April 2022.
It's difficult for formerly incarcerated people to qualify for bank products and services at most financial institutions, so starting a credit union is an important step in reaching out to more people and addressing a larger systemic issue.
--- Nancy Eiden Founder, First Step Alliance
You can read the Business Insider article in its entirety HERE.