Growing up, B.C. Silver remembers a time when the prevailing financial institutions in his neighborhood were check cashing places. Silver was raised in the Atlanta foster care system and, having grown up a ward of the state, he saw up close how the reliance on these sorts of alternative financial services widened the wage gap that persists between Black and Brown Americans and their white counterparts.
Silver broadened his financial worldview after going away to school and beginning his professional career. He got his start in marketing roles for consumer goods stalwarts like Proctor & Gamble, but it wasn’t until he made a pivot into the financial services space that he felt he’d found his calling.
In early 2017, Silver took on a leading role at 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 completely different animal to work on people’s finances,” says Silver. “The amount of care and support you have to provide for those folks is very intimate and personal.”
His experience at the helm of Green Dot brands like RushCard gave him the confidence to strike out on his own. In 2019 he launched the fintech platform Grind Banking before joining forces with the Change Company and being named president and CEO of ChangeFi in early 2021.
*The following interview has been condensed for length and clarity
In March, you took over as president and CEO of ChangeFi. What was it about ChangeFi and its mission that convinced you that it was the right next step on your path to increasing financial access in communities of color?
Our goal was similar to most fintech companies: to launch a debit card program and then continue to scale and offer different types of product solutions, whether it was getting rid of payday loans or [offering] home loans, etc. That was always the vision.
When I met the Change Company folks, they already had a mortgage business and a lending business, so they were already operating in a space I wanted to explore. They were in the community, and they were already helping the same audience that I was serving. And so, it felt like, from an opportunity standpoint, that we’d be stronger if we walked together in our path versus trying to do it separately. So that’s what drove the level of interest in the partnership.
In 2019, the FDIC found that Black and Latinx households make up about 32% of the U.S. population but comprise 64% of the “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, that means you have a debit card or a checking account, but you use secondary financial solutions. So, [that can mean] payday loans, bill pay locations, Western Union, et cetera. Unbanked [refers to] the people entirely outside of the banking system. So [that includes] people using cash with no checking account who [rely on] separate secondary financial solutions.
The ripple effect is, if you’re in the banking system, you have an opportunity to develop credit, you have an opportunity to secure a credit card, and you also don’t pay any additional fees [to access your money] like you would at a check-cashing place. If you have influxes in your cash flow, you can use a credit card, and you aren’t getting charged 450% interest the way you would if you were taking out a payday loan. And [those fees make] a world of difference when you think about someone living paycheck to paycheck.
If not for lack of awareness, what’s causing this underbanked community to shy away from traditional banking services, even if it means facing higher interest rates and predatory lending cycles?
I think it’s a series of unfortunate events that push people out of the financial banking environment. They’ve been forced to leave because the system wasn’t built for them. The number one barrier between the underbanked or unbanked is a lack of trust. And in fairness to our community, if you’ve been mistreated [by traditional banks] for 40, 50, 60 years, it’s no wonder why people don’t trust banks. And in many cases, these folks live in bank deserts. So, from an accessibility standpoint, those banks aren’t even in their neighborhoods.
Many people would also say, “It doesn’t make sense if you had a banking account that you’re no longer banked.” But those people, I’d say, probably never counted on only having a hundred dollars in their bank account before getting hit by three overdraft fees, and all of a sudden, they’re in the negative. We don’t play that game. That’s why we don’t have any hidden fees, no monthly fees, and no minimums. That’s a part of giving people the playbook on how to succeed and grow financially.
So what does an overhaul of the banking system 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 got you. If you want to improve your credit, we can help with that. If you want to scale to buying a home eventually, we want to help you get there. And so, as you think about our portfolio of products, you’ll see we have financial solutions that help support you at every step.
Also, a key place that I want to improve is in the payday loan space. So, if we can eradicate the cycle of payday loans in our community, that would set off a ripple effect in how our community thinks about getting support from financial institutions.
What would you say, if anything, separates ChangeFi from some of your competitors in your team’s approach to addressing the wage gap?
One, a best-in-class product, including a fully functioning mobile app. You can move money in and out. You can do a P2P (person to person) transfer. It works in Apple wallet. You can get a direct deposit and get paid up to two days early. You can do all of that stuff that all the other solutions do, and more. On top of that, our fee structure is drastically lower than where the rest of [our competitors] play. So, I would say cost convenience 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 another two billion in loans to help support diverse homeownership.
The fact that we have the capital, we have the history and the track record on supporting you in making the ultimate financial purchase – that’s a huge differentiator. Do you want to build a track record 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 give you a home loan one day?
You’ve mentioned that Nipsey Hustle’s platform really inspired you while you were laying the foundation for Grind Banking. Before we go, I’d love to hear – what was it about Nipsey’s message that resonated with you the most?
He was just a visionary and a passionate, very well-read, genuine human being. And I think the thing that inspired me most about him is; he represented what we all hope to be. What I mean more specifically is, there was no blueprint laid out for him on how to become an innovator or a catalyst for change.
He grew, he evolved, and he learned more – in many cases, outside of the traditional educational system – and I found it inspiring as a fellow Black man. He really challenged the paradigm of how to invest your money, how to think about your hustle and how to evolve – not just for yourself, but for your community. So, that’s what I hope to continue in the marathon.