Growing up, BC Silver remembers a time when the dominant financial institutions in his neighborhood were check-cashing places. Silver was raised in Atlanta’s foster care system and, growing up in a neighborhood of the state, saw firsthand how reliance on this type of alternative financial service has widened the persistent wage gap between Black and brown Americans and their white counterparts.
Silver broadened his view of the financial world after leaving school and starting his professional career. He got his start in marketing roles for consumer goods mainstays like Proctor & Gamble, but it wasn’t until he made a pivot in the financial services space that he felt he had found his calling.
In early 2017, Silver took on a leading role within the mobile banking solution Green Dot Corporation and it was here that he realized the impact he could have by increasing access to financial services in communities that traditional banks had forgotten. “It’s a whole different animal working on people’s finances,” says Silver. “The amount of care and support you need to provide these people is very intimate and personal. “
His experience at the head of Green Dot brands like RushCard gave him the confidence to go it alone. In 2019, he launched the Grind Banking fintech platform before joining the Change Company and being appointed Chairman and CEO of ChangeFi in early 2021.
* The following interview has been condensed for length and clarity
In March, you became President and CEO of ChangeFi. What did ChangeFi and its mission convince you that this is the next step on your path to increasing financial access in communities of color?
Our goal was similar to that of most fintech companies: to launch a debit card program and then continue to evolve and offer different types of product solutions, from getting rid of payday loans. Where [offering] home loans, etc. It has always been the vision.
When I met the folks at Change Company, they already had a mortgage business and a loan business, so they were already operating in a space that I wanted to explore. They were part of the community and were already helping the same audience that I was serving. And so, it was as if, from an opportunity perspective, we would be stronger if we walked our path together rather than trying to do it separately. So that’s what sparked the level of interest in the partnership.
In 2019, the FDIC found that black and Latin households made up about 32% of the U.S. population, but included 64% of “unbanked” and 47% “underbanked” communities, respectively. What do these terms mean and what are the implications of being underbanked as a black or brown consumer?
So if you think of the word underbanked, it means you have a debit card or checking account but are using secondary financial solutions. So, [that can mean] payday loans, bill payment points, Western Union, et cetera. Not banked [refers to] people entirely outside the banking system. So [that includes] people using money without a current account who [rely on] separate secondary financial solutions.
The ripple effect is that if you are in the banking system, you have the option of building credit, you have the option of securing a credit card, and you don’t pay any additional fees either. [to access your money] just like you would at a check-cashing location. If you have cash flow, you can use a credit card, and you won’t have to pay 450% interest like you would if you took out a payday loan. And [those fees make] a world of difference when you think of someone living paycheck to paycheck.
If not for lack of awareness, what is driving this underbanked community to shy away from traditional banking services, even facing higher interest rates and predatory loan cycles?
I think it’s a series of unfortunate events that push people out of the financial banking environment. They were forced to leave because the system was not designed for them. The main barrier between underbanked and unbanked people is lack of trust. And in fairness to our community, if you have been mistreated [by traditional banks] for 40, 50, 60 years, it’s no wonder people don’t trust banks. And in many cases, these people live in banking deserts. So from an accessibility perspective, these banks are not even in their neighborhoods.
A lot of people would also say, “It doesn’t make sense if you had a bank account that you are no longer in the bank. But these people, I would say, probably never expected to have only a hundred dollars in their bank account until they were hit with three overdraft fees, and all of a sudden they’re in the negative. . We don’t play this game. That’s why we have no hidden fees, no monthly fees and no minimums. It’s a part of giving people the manual on how to be successful and grow financially.
So what does a banking system overhaul look like and how does ChangeFi fit into that equation?
We want to meet you, no matter where you are in your financial journey. So if you need a debit card, we’ve got you. If you want to improve your credit, we can help. If you eventually want to move on to buying a home, we want to help you do that. So, thinking about our product portfolio, you will see that we have financial solutions that help you every step of the way.
Also, a key place that I want to improve is in the area of payday loans. So if we can eradicate the cycle of payday loans in our community, it would trigger a ripple effect in the way our community envisions getting support from financial institutions.
How about, if anything, that separates ChangeFi from some of your competition in your team’s approach to closing the pay gap?
One, a top notch product, including a fully functional mobile application. You can bring in and out of money. You can perform a P2P (person-to-person) transfer. It works in the Apple wallet. You can get direct deposit and get paid up to two days in advance. You can do everything all of the other solutions do, and more. On top of that, our fee structure is significantly lower than the rest of [our competitors] to play. So I would say the convenience of cost is a differentiator.
I would also say that homeownership is huge for us. We’ve already funded around 50,000 loans worth over $ 10 billion, so that’s real money [that we’re injecting] in the community. And [this year], we aim to fund an additional $ 2 billion in loans to help support diversified home ownership.
The fact that we have the capital, we have the history and the track record to help you make the ultimate financial purchase – that’s a huge differentiator. Do you want to build up a balance sheet with a bank that will say “Thank you” and charge you more fees, or do you want to establish a history with a banking solution that will one day grant you a mortgage?
You mentioned that the Nipsey Hustle platform really inspired you while you were laying the groundwork for Grind Banking. Before I go, I’d like to hear – what struck you most about Nipsey’s post?
He was just a visionary and a passionate, very cultured and genuine human being. And I think what inspired me the most about him is; he represented what we all hope to be. What I mean more specifically is that there was no blueprint for him on how to become an innovator or a catalyst for change.
He grew up, he evolved and he learned more – in many cases, outside of the mainstream education system – and I found that inspiring as a black compatriot. He really challenged the paradigm of how to invest your money, think about your turmoil, and scale – not just for yourself, but for your community. So that’s what I hope to continue in the marathon.