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Starving Payday Lenders

Targeted Faith-Centered Financial Literacy Training in a Context of Concentrated Poverty

The Context

The City of Fresno, California, currently has the second highest rate of concentrated poverty[1] in the nation among large cities.[2] This is an improvement. In 2005, the Brookings Institute identified Fresno as having the highest rate of concentrated poverty of any large city in the U.S.,[3] and for years it has lived with that moniker. That being said, Fresno still has 45 census tracks where 40 percent or more residents live under the federal poverty line.[4] A lack of a diversified economy, dependence on migrant labor and an under-educated workforce fuel this generational poverty.

One outcome of this economic reality is a complex vulnerability of the general population to economic exploitation. Fresno has become a magnet to the payday loan industry. In Fresno alone, a city of more than half a million people, there are now 68 payday lending establishments. This is a per capita rate of 13.6 establishments per 100,000, nearly three times the rate for the cities of San Mateo and Daly City, CA, and nearly twice the rate of San Bruno, CA.[5] These have been called a form of legal usury, charging up to 459 percent interest per annum. The average person accessing these short-term loans uses these services eight times per year,[6] often getting caught in what some have called a form of debt slavery. Several forms of financial literacy training have been attempted by a handful of civic organizations, banks and other financial institutions to address the need for financial literacy, but with mixed results, and these efforts have fallen off in recent years.

Fresno Pacific University (FPU), a faith-based institution, sits in the heart of this geographic and sociological context. It is one of the few Hispanic Serving Institutions in the Coalition of Christian Colleges and Universities. The families of many of its students have struggled with the lack of financial margin in their lives. In its interviews with Latino pastors and also churches in the predominantly African American West Fresno Ministerial Alliance, the FPU Center for Community Transformation[7] discovered there was a deficit of basic financial knowledge on the part of many church goers living in concentrated poverty neighborhoods. Furthermore, there was a strong sense that existing faith-centered financial literacy curricula popular in many church educational settings was not connecting well with ethnic-specific, urban poor communities, both in terms of the content addressed and the pedagogy or delivery systems used. Some pastors in neglected communities criticized these curricula for discussing among other things, “what to do with a $10,000 investment,” a fantasy scenario to many inner-city residents. Others cited middle class assumptions that were pervasive, and even a tendency to blame the poor for their problems.[8] Pastors complained that those curricula never dealt with predatory lending, the trap of rent-to-own stores, or talked about the role of money in relationships, nor did they do it in a style their members felt comfortable with or in a delivery system that utilized adult learning pedagogies. Most were video driven, and seemed steeped in the assumptions and learning styles of middle-class culture. The backdrop to this missing of the mark is the larger picture of financial literacy education in general which in recent years has confirmed mixed results of standard financial literacy training in terms of changing long-term behavior.[9] Some of these mixed results have been proven to do with the motivation levels of the participant in the training. Those who, for whatever reason, chose to get the training due to their circumstance or a future goal retained more of the information and saw more long-term benefit, as opposed to those who took the training as part of a class at school or work. “Motivated adults benefit from targeted education.”[10] But perhaps more pertinent to the reality faced by the 25 percent of Fresno’s population that lives in poverty, is the choice of financial management training systems. Careful attempts at matching the content and delivery system to the particular issues faced by low-income populations can “seriously impact subgroups of low-income populations.”[11] This is especially true of the immigrant community where there are additional pressures and challenges. Immigrants are attractive targets for criminals since they tend to keep their assets in cash on hand and are less likely to report theft.[12] Furthermore, the potential of faith-based curricula that takes seriously the issues of residents in poor neighborhoods has been documented for its holistic approach and recommended even from secular sources as an effective strategy.[13]

It was in this context in 2013 that the FPU Center for Community Transformation (CCT) undertook a form of financial literacy training utilizing a nationally field-tested curriculum called Faith & Finances (F&F) produced by The Chalmers Center expressly for urban poor communities.[14]

The Process

The CCT created a partnership with seven churches located in urban poor communities in West and Central Fresno[15] that asked each church to screen individuals or couples that the pastors felt were vulnerable financially or whom they felt simply needed this curriculum. Each church designated 2-3 people to send to the class. Each church also agreed to provide dinner once during the duration of the nine-week course. Finally, each church agreed to match the $20 per student cost, to help underwrite the expense. The CCT for its part provided the venue, covered the cost of childcare, funded the training and certification of three instructors, coordinated the publicity, convened the weekly debrief/evaluation and planning process for the instructors, arranged the purchase of in-class materials, and handled communications among the churches and the final graduation ceremony. Two cohorts were accomplished in a six-month period, each taking from 9-11 weeks to accomplish. Each included an entry survey and an exit survey with both quantitative and qualitative data measured. The outcomes of these two cohorts will be discussed comprehensively in this paper.

The Instructors

The CCT took care in choosing the instructors for this course. The goal was for a diverse team along multiple lines. We wanted a team that represented age diversity that would reach people in the 20s, 30s and 40s, and so we chose three trainers representing those age cohorts. We wanted ethnic diversity, so we chose a Latino, African American and White leader each. We wanted gender diversity, but were unsuccessful in identifying a female trainer who was available for the first cohort. (We will discuss this further when talking about the certification process.) We also chose experience diversity. While all three trainers had a passion for the subject, their backgrounds diverged significantly. One trainer was a 30-year veteran of the financial world, having worked for Merrill Lynch that entire time. But he also had many years of experience with financial literacy training via other training systems (United Way, Bank on Fresno, and a church-related curriculum, etc.). Another trainer was a local pastor who had taught many church related financial literacy curricula. Our third trainer was a grad student with little experience teaching this subject, but lots of enthusiasm for it. The diversity of the team connected significantly with the diversity of the participants.

The CCT raised money from its base to send these three leaders to Dallas for The Chalmers certification. The cost was approximately $3000.

Make-Up of Participants

The combined stats for the two initial courses showed a 33 percent male to 66 percent female split, and included a total of 38 participants who finished their course. The classes were diverse ethnically, with 31 percent Latino and 53percent African American, with the rest split equally between those declaring as multi-racial, Asian or white. The clear majority was between 25-30 years old, and fairly evenly split between single and married. Over 36percent had a high school education or less. Each participant was recommended by their pastor as someone especially vulnerable, or in need of this curriculum. The pastor’s recommendation turned out to be key and led to an 80 percent completion rate among participants.

Income (primary and additional) for all members of each participant’s household confirmed that 65percent of participants in the two classes lived under or very near the poverty line (23K for a family of four). Another 11 percent were at 150 percent of the poverty line (35K for a family of four).

Subject Matter Covered

The Faith & Finances curriculum makes no assumptions about the financial literacy of participants. Very basic subjects are dealt with, including what banks are for and how savings accounts work. Subjects are dealt with that middle class curricula tend to ignore, such as why utilizing payday lenders is dangerous, why check cashing establishments cost you more to use, why rent-to-own stores are not good deals. Very basic information is presented about tracking expenses and income, various kinds of insurance, the role of credit and credit reports (Each participant gets a credit check.), and participants hold each other accountable to the process. Most importantly, the relationship between biblical values and financial decisions is probed, and a large amount of time is spent on the connection between money and relationships, dealing with the many heart-level issues that occur in families regarding their finances. Biblical input is woven throughout. The class celebrates victories and openly discusses challenges.

The Pedagogy/Andragogy

Rather than listening to lectures or watching videos, attendees participate in the course via skits, role plays, games, small group discussions and whole group dialogue. Teaching is done by facilitators who are intentionally interactive. Story and narrative are woven throughout. Chalmers calls this style kinetic learning, which is built on a foundation of adult learning theory, and recognizes a more oral/auditory/participatory learning style of many inner-city residents.

Course Outcomes

Over the many weeks of being with individuals and couples, hearing their situations and stories, reviewing their credit reports, walking through household budgets, listening to their challenges, a sobering picture began to emerge of people disconnected from basic financial information and best practices. In some cases participants’ identities had been stolen and they did not know it. Others were enslaved to payday lenders and couldn’t break free. Others had mountains of debt with no way out. But midway through each class, the instructors began to see breakthroughs. One woman brought in her written verification that she had paid off one of her payday loans and publicly vowed that she would never use them again. Another verified that she had paid off all her credit cards. Another showed the class her very first savings book from a bank. Many others told stories of the liberating conversations and decisions happening around money in their homes.[16] By the end of each course it was clear that the curriculum and process was making a difference.

The data emerging from the first two cohorts was not surprising to the facilitating team. For example, entrance surveys demonstrated that while only 55 percent of the participants in the first two cohorts were working from a budget prior to the course. After the conclusion of the course, 78 percent had created a budget and spending plan, 89 percent were tracking their income and expenses. Perhaps more importantly, 82 percent were now talking with their loved ones about money and how it affects their relationships.

With regards to the issue of financial margin in their lives, prior to the course, only 29 percent of participants had any kind of an emergency fund over $99. After the conclusion of the course 67 percent said they had created and were actively adding to an emergency fund.

It was clear to instructors that participants were experiencing the growth of hope regarding their financial situations as a result of the training. Prior to the course only 40 percent of participants reported being optimistic about their finances. After the course 86 percent reported being optimistic about their finances, based on not merely new information, but on actual decisions and practices that had been adopted.

One unanticipated result of how well these cohorts went, after examining the evaluations, The Chalmers Center declared that the CCTs Fresno courses had become a “best practice model for the nation.”[17] They subsequently made Fresno their West Coast hub for Faith and Finances Certification. This allowed the CCT to pursue the goal of placing a F&F course in or near Fresno’s extreme poverty neighborhoods. We will discus this at the end of this paper.

A Strategy for the Whole City: Certification of Church Teams

The vision of the CCT from the beginning was to place F&F courses at congregations in or near the extreme poverty neighborhoods of the city. With 45 census tracks defining neighborhoods with 40 percent or more at the poverty line, and many more neighborhoods where 30 percent or more of the residents are living in poverty, the CCT felt it was imperative that this course be placed, not only in proximity to where the need was, but also placed in institutions where the trust level was high. There are other financial literacy curricula being used in the city, but their inability to address the spiritual issues connected to money, their brevity and incomplete treatment of the subject, and the mixed motivation of the instructors, e.g., banks wanting to sell their products, was seen as problematic. Some have noted the 42 percent of the entire payday loan industry is financed by the major banks.[18] Could the CCT strategically place F&F courses, representing a more altruistic motivation, at the points of greatest access, where they would do the most good?

After The Chalmers Center designated Fresno as their West Coast hub for certification, the CCT asked them to reserve half of the available seats in the certification conference for delegates from the Fresno region. We held a community information meeting to which 40 people came, representing 19 churches and four non-profits. Out of this group the CCT confirms 20 delegates representing 10 churches coming to the upcoming certification conference. This by no means represents all those interested, as the CCT has had to create a waiting list for future training. The gender balance missing in the first group of trainers was achieved in the next set of trainers, with 56 percent of the facilitators being trained to lead future courses being female.

The group of those being certified represents theological diversity, with churches from evangelical and mainline denominations represented, as well as non-profits. It represents ethnic diversity with primarily black and white delegates. They also represent neighborhoods that are characterized by significant levels of poverty (two congregations at 20.1 percent and 21.7 percent, and five congregations at the concentrated poverty levels of 40.4 percent, 42.4 percent, 49.4 percent, 62.7 percent). Only three congregations come from neighborhoods with less than 10 percent living in poverty. Some of those congregations are open to partnering with other churches in neighborhoods characterized by higher levels of poverty.

One initially perplexing fact stood out as the CCT recruited churches to get certified. While churches that had previously sent delegates to the cohorts sang the praises of the curriculum, only 2 churches decided to get certified themselves, even with the CCT underwriting 1/3 of the cost of sending a team. The CCT queried these churches and several factors emerged for their decision. Some of the churches were small and not in a position to identify leaders who were ready for the certification process. Others could still not afford to certify a team, given the $440 cost for a team of two (after $230 assistance from the CCT). It was also determined that some churches were simply interested in sending participants to future CCT courses, rather than in getting certified themselves – certainly a vote of confidence for the CCT but a curveball of sorts to the CCT’s objectives for the city.

Two of the CCT trainers are now in the process of getting a higher, “Train the Trainer” certification with Chalmers that would allow them to certify facilitators for future courses. The CCT will work with the smaller churches that cannot take advantage of this current certification conference.


This process began with a vision of a more holistic and collective approach to faith-based financial literacy training in the city. Initial conversations with key churches and non-profit organizations gave the CCT the confidence to invest in the training of a team. The first two courses produced fruit that demonstrated the effectiveness of the curriculum and pedagogy. And this has led to the momentum now being felt by additional churches that have signed on for facilitator training. A strategy that began with one class appears on track to become a dozen courses being taught at access points at strategic locations in low-income neighborhoods. It will use a delivery system that takes the whole person seriously, that walks alongside people as they create new ways to live, that starves the payday lenders, and that strengthens the church. In the spirit of Nehemiah 5, where the governor made corrupt officials who were gouging the poor shake out their pockets and abandon their abuse, we call on the people of Fresno to dismantle systems that make life harder for the poor, instead equipping and empowering them. In the spirit of 2 Kings 4, where Elisha devised a financial solution for the widow who was being threatened by a creditor, we call on the people of Fresno to protect the marginalized from exploitation and create new pathways to economic stability. In the spirit of Ezekiel 22, where private business and political process was used to oppress the poor and needy and the alien, we call on the people of Fresno to reject systems that use people and love money. And in the spirit of Jesus who, when his disciples wanted to send the people away to buy food, to fend for themselves, said, “You give them something to eat” (Mark 6:37 emphasis added).

Appendix 1

A sample of verbatim comments from the first two cohorts.

  • “I was able to reduce my debt, pay off and close credit cards I was previously using as a crutch, but now they are closed and cannot use them anymore.”
  • “I shared my long-term goals with someone for the first time because of this course.”
  • “I have cut back in every category and have already saved $150. My kids said, ‘That’s not fair,’ when the snacks were reduced, but I stayed firm. I just looked at that $150 and smiled.”
  • “My 5 year old son made me a lunch because he wanted to help me save money by not buying my lunch.”
  • “I just paid off one of my payday loans because of this class. Two more and then I am done with those people. I am free.”
  • “Owning up to my own spending, I learned that I spend most money on things I don’t need.”
  • “I got some clarity on how some financial situations work which in turn helps me make better decisions.”
  • “The class introduced me to creating budgets. Prior to the class I had never created a budget for myself. This has changed my life tremendously.”
  • “Started riding the city bus Monday, Tuesday and Friday to reduce my spending.”
  • “Honestly not only are my finances coming in order but my relationship with the Lord is better. I have really applied what I’ve learned to my life. Thank you for teaching me this.”
  • “Six months after we took the class my wife and I have a savings account for the first time in our marriage. It has $1000 in it!”

[1] Concentrated poverty is defined by any neighborhood where 40 percent or more of the residents live under the federal poverty line. Fresno has 45 census tracks that fit this designation – U.S. Census Bureau.

[2] Wozniacka, Gosia, “California Poverty: Three Metro Areas in Central Valley Rank among the Poorest in the Nation,” Huffingrton Post, (accessed Feb 10, 2014, 12:19pm).

[3] Berube, Alan and Katz, Bruce, “Katrina’s Window: Confronting Concentrated Poverty Across America,” Brookings Institute, October 2005.

[4] 2008-2012 American Community Survey 5-Year Estimates, U.S. Census Bureau.

[5] “Determining the Number of Establishments Per Capita,” Insight Center for Economic Development, (accessed February 10).

[6] Ellis, Blake, “Fast Cash Payday Loans Cost Borrowers $520 per Year in Fees,” CNNMoney, July 18, 2012, (accessed Feb 10).

[7] The purpose of the CCT is to pursue God’s abundant community in the Central Valley. The core initiatives of the CCT include: faith-based job creation, GED completion, financial literacy training for low income communities, Latino leadership certification, comprehensive immigration reform, anti-human trafficking and civic renewal.
[8] Evans, Rachel Held, “What Dave Ramsey gets wrong about poverty,” Belief Blog, CNN, (accessed February 7, 2014). And Rivadeneira, Caryn, “Things Broke People Do,” Her Meneutics, Christianity Today (accessed February 7, 2014).

[9] Braunstein, Sandra and Welch, Carolyn, “Financial Literacy: An Overview of Practice, Research and Policy,” Federal Reserve Bulletin 445 (2002).

[10] Mandel, Lewis and Klein, Linda Schmidt, “Impact of Financial Literacy Education on Subsequent Behavior,” Journal of Financial Counseling and Planning, Vol. 20 Issue 1, pg. 18 (2009).

[11] Anderson, S.G., Zhan, M. and Scott, J., (2004) “Targeting Financial Management Training at Low income Audiences,” Journal of Consumer Affairs, 38:167-177. Doi:10.1111/j.1745-6606.2004.tboo470.x.

[12] Singer, Anna; Paulson, Audrey; Smith, Jeremy; Newberger, Robin: “Financial Access for Immigrants: Lessons from Diverse Perspectives,” Federal Reserve Bank of Chicago, The Brookings Institution, (2006).

[13] Vitt, Lois A.; Anderson, Carol; Kent, Jonnie; Lyter, Deanna M.; Siegenthaler, Jurg K.; Ward, Jeremy, “Personal Finance and the Rush to Competence: Financial Literacy Education in the U.S.”, Institute for Socio-Financial Studies, Fannie Mae Foundation (2000).

[14] For a detailed description of the content and process please consult the Capstone Project of Andrew Feil, submitted to Bakke Graduate University ( in partial fulfillment for the requirements for a master’s degree, “Faith and Finances: Financial Literacy Training for Low-Income Residents in Fresno,” February 7, 2014.

[15] Churches: Westside Church of God, Bethany Inner-City Church, On Ramps Covenant Church, Hope Now Bible church, Rising Star Baptist Church, The Way Christian Fellowship, United Faith Christian Fellowship.

[16] See appendix 1 for verbatim comments.

[17] Conference call conversation with F&F Director Jerilyn Sanders of The Chalmers Center, (December 3, 2013).

[18] National People’s Action, “Profiting From Poverty: How Payday Lenders Strip Wealth from the Working Poor for Record Profits,” January, 2012.

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