In addition to sharing some of my personal experience and the positive impact of access to credit in my life, I’m also proud to share a few things we’re doing at Possible to help communities break the debt cycle and unlock economic mobility for generations to come—our mission and responsibility as a Public Benefit Corporation.
Black History Month is a time to celebrate the rich history and triumphs of Black Americans, while also acknowledging and reflecting on atrocities of the past. Black Americans have overcome unspeakable obstacles and have made great strides toward equality, but there is still much to be done.
The facts speak for themselves. Here are just a few of them.
According to research from the Brookings Institute, the net worth of a typical white family was $171,000 in 2016, nearly ten times greater than that of a Black family: $17,150. This gap in wealth between Black and White households reveals a centuries-in-the-making lack of economic equity.
The wealth gap disproportionately impacts Black Americans’ retirement and long-term financial wellbeing. A 2022 study showed “the median White American in their early thirties had $29,000 more than the median Black American of the same age. This racial wealth gap is even greater among older adults: the median White American in their late fifties had $251,000 more than the median Black American.”1 This is not just because initial wealth gaps compounded over time—even conditional on having the same wealth in their early thirties, White Americans reach a significantly higher wealth rank by their late fifties than Black Americans.
On top of that:
Young Black Americans are more likely to begin adulthood with lower-than-average credit scores.2
Black households have higher percentages of unbanked households and lower rates of access to credit.3
Though they make up only 13.6% of the US population, Black consumers represent 23% of storefront payday loan customers.4
Possible’s mission is deeply personal to me.
Possible's mission resonates with me because of my upbringing. I grew up in Detroit in a low-income neighborhood. I am blessed with a large and loving family and never went hungry, but things were tight and I watched my mother struggle to make ends meet.
We were often one unexpected emergency away from being unable to pay a critical utility bill or meet a basic need.
When I read reviews from our customers that thank us for giving them a chance when no one else would, or comments that a family was able to purchase groceries because of our loan, it is not hard for me to put myself in their shoes because I was once there. Combined with the love, prayers and support of my family, it was access to credit (in the form of student loans) that ultimately helped me to increase my earning potential and chart a different course for my family. I was able to attend a top law school and am now in a leadership role at a company that is doing its part to bring affordable and fair credit to communities in need.
Since its inception, Possible has been intentional and explicit about this mission; and in 2021, we officially converted to a Public Benefit Corporation. Since day one, we’ve chosen to do things differently—in short, we do well when our customers succeed.
Advocacy for fair and responsible short-term lending
At Possible, being a Public Benefit Corporation means that we have a corporate responsibility to benefit the financial wellbeing of our customers and the public—part of that work includes addressing financial inequities that have disproportionately impacted Black communities. Our products help customers build credit history and never have hidden fees. Quite simply, we don't make money by keeping you in debt.
Product features that drive an inclusive economy
We use alternative data sources for underwriting. That means instead of just pulling your FICO score, a system facing increasing criticism for its roots in structural racism,5 the Possible app looks at a variety of factors like income and bank transactions to learn about our customers’ financial situations. Once you have a Possible product, we also report payments to credit bureaus—unlike other lenders of the same type—so we can help customers build credit history and get out of debt for good. On top of that, we offer payment flexibility with free rescheduling, no late fees, insufficient funds fees, or penalty fees; the option to pay bi-weekly installments, and no rollovers.
These are all just small steps to achieving our mission, and recognizing and addressing the inequities that are commonplace in the financial services and lending industries.
As we close out Black History Month, I want to salute the great civil rights leaders who fought and continue to fight for equality and my loving family who prioritized education and ingrained in me a sense of obligation to reach back and help others as we climb. Here at Possible we celebrate Black History Month this February, but we fight for fairness and equality every day. 🟦
1 “The Black-white gap in wealth mobility and what to do about it”, Brookings, https://www.brookings.edu/blog/up-front/2022/06/29/the-black-white-gap-in-wealth-mobility-and-what-to-do-about-it/#:~:text=Black%20Americans%20who%20have%20high,Americans%20(77th%20percentile)
3 “Young Adults’ Credit Trajectories Vary Widely by Race and Ethnicity”, Urban Institute, https://www.urban.org/urban-wire/young-adults-credit-trajectories-vary-widely-race-and-ethnicity
3 “2021 FDIC National Survey of Unbanked and Underbanked Households”, FDIC, https://www.fdic.gov/analysis/household-survey/2021execsum.pdf
4 “Investing in—and with—Black consumers in financial services”, McKinsey, https://www.mckinsey.com/bem/our-insights/investing-in-and-with-black-consumers-in-financial-services
6 “How structural racism plays a role in lowering credit scores”, CNBC, https://www.cnbc.com/2022/10/11/how-structural-racism-plays-a-role-in-lowering-credit-scores.html
