The bad news keeps coming on JPMorgan Chase's lending practices around the financial meltdown, including a new $50 million fine and an admission that it engaged in illegal robo-signing practices in processing foreclosures. With all this negative attention, it's no surprise that the bank's corporate responsibility department is trying to keep the good news coming as well—although, to be fair, JPMorgan Chase has a long history of philanthropy.
The latest good news is the bank's commitment of $3 million to one of the more interesting nonprofits working to help underserved Americans achieve financial security.
The funds will go to the Center for Financial Services Innovation (CFSI) to back a challenge to innovators to create new financial products that will help households with tight budgets manage their finances. The competition is accepting applications from February 24 until April 7, 2015, and the awards include "up to $250,000 in capital, along with national partnership opportunities, industry expertise, mentorship, and cutting-edge consumer and design insights necessary to power the next generation of leading financial services innovations."
I wrote about CFSI back in December, when the Ford Foundation gave the group a $1 million grant for its work to improve financial services for low-income Americans.
As I wrote then, CFSI is so interesting because of the compelling case it makes for rescuing poor people from a predatory web of check-cashing outfits and pawnshops that now bleed these folks dry. Toppling that empire of legal loansharking isn't just the right thing to do, it can be profitable.
A key argument that CFSI makes to anyone who'll listen is that since unbanked Americans are getting killed by high interest payments and fees, there's a huge opportunity here for institutions and entrepreneurs who can "develop high-quality, affordable solutions to address the financial health of underserved consumers."
The competition that JPMorgan is getting behind reflects that spirit. The winning projects will demonstrate an embrace of consumer-friendly design, and will have the capacity to improve consumer success with finances. Winners will also create products that help build trust and create opportunity in order to positively impact both consumers and providers.
JPMorgan Chase is one of a long list of banks, credit unions, and credit card companies partnering with CFSI. Plenty of foundations are behind the organization as well. CFSI sees itself as "seeding the innovation that will transform the financial services landscape."
CFSI's Financial Solutions Lab is a $30 million, five-year initiative to identify, test, and expand the availability of financial products that help Americans increase savings, improve credit, and build assets. The Lab provides competitions and incentives for entrepreneurs, businesses, and nonprofits to develop products and services that improve consumers’ financial health. To learn more about applying for the challenge, go here.
Winners will be selected by a cross-section of leaders from JPMorgan Chase, CFSI, and strategic partners in "human-centered design, behavioral economics, community outreach and for-profit entrepreneurship."
A new Advisory Council for the Financial Solutions Lab that has been created for this project is a veritable who's who in philanthropy and asset building, including stars like Ben Jealous and Darren Walker as well as Andrea Levere, president of the Corporation for Enterprise Development, and head honchos from Salesforce.com and the Omidyar Network. This Advisory Council will "play an integral part in guiding the success of the winning innovations to ensure they meet the needs of consumers and can be made widely available."
As we said, CFSI has some real juice, and is definitely an outfit to watch carefully as it woos new funders and allies.
Winners will be announced at CFSI’s Emerge Conference on June 11th.