Artwork by Jordon Cheung
Average read time: ~5 minutes
In the world of financial services, there’s a status quo and an expectation about how you’re supposed to do business: shareholders want profits and boards of directors are pushed to achieve them. That format works for a lot of successful, responsible businesses; but when it doesn’t, it really doesn’t.
In 2008, subprime mortgage lenders and investors triggered a global economic catastrophe1. In 2020, Wells Fargo agreed to pay $3 billion2 after over a decade of widespread mistreatment of their customers. In 2022, Regions Bank reached a $191 million settlement after they charged customers illegal surprise overdraft fees3. Behind each of these events, blind motivation for higher profits caused a disregard for customers’ best interests.
When we started Possible, we wanted to do things differently. We show up to our board meetings with two goals: profits and social impact. From day one, we made a commitment to the communities we serve, to end the debt cycle and unlock economic mobility. Our mission is to bring fair and affordable financial services to those who need it most—namely, people who have been neglected and underserved by traditional banking products. So when our customers succeed, we do too.
This is the way we’ve always done business, part of our mission since the beginning—but now it’s official: we’re a Public Benefit Corporation. Our mission is unmistakably anchored in how we set up our company. Starting today, we are legally bound to not only achieve profit, but also to make a positive social impact.
This means that our long-standing practice of aligning our interests as a company with the best interests of our customers is now part of our corporate DNA. It means that we have a responsibility to benefit the financial wellbeing of our customers and the public: you.
This makes us unique. There are very few Public Benefit Corporations that offer consumer loans and, with the upcoming launch of Possible Card, we will become the first PBC credit card provider.
Here are a few examples of product decisions, servicing benefits and community outreach that we do now, and will continue to do now that we’re a PBC:
1. We win when you win.
We are economically incentivized to align with your long-term interests. That's not the case with many other financial services companies and business models. Our products help you build your credit history and never have hidden fees. Quite simply, we don't make money by keeping you in debt.
2. Unlike other financial services, we never charge late fees or penalty fees.
According to Bloomberg, US consumers who are frequently charged overdraft fees drive more than half of the profitability of mass-market checking accounts—costing consumers over $8 billion a year. Fees are a source of enormous profit for our competitors, but we are not pursuing this stream of revenue; it does not align with our commitment to our customers. That means no late fees, no insufficient funds fees or overdraft fees for failed payments.
3. We offer flexible repayment plans at no additional cost for our products.
Life happens. Sometimes our customers need extra time to make their payments. Instead of trapping customers in a debt cycle, it’s in our best interest to help them succeed.
4. We maintain a close relationship with our customers.
We regularly conduct customer interviews and invite customers like you to our quarterly company-wide meetings, to hear from you directly so we can better understand your needs and our opportunities for improvement.
This is just the beginning. We’re on this path for good.
Becoming a Public Benefit Corporation isn’t the end of our story. This is just a small step in a longer journey towards achieving our mission.
Now that we are one of few PBCs in the consumer finance space, we are eager to expand our reach and continue to provide public benefits in the form of fair and affordable financial products to communities in need. We are #HereForGood and ready to prove it. 🟦
Comments or questions? Drop us a line at [email protected]—we’d love to hear from you.
What is a Public Benefit Corporation? +
Public Benefit Corporations are corporations where the board of directors actually have a broader mandate than simply maximizing value for shareholders—which they still have to do, but it’s not their only job.
How is a Public Benefit Corporation different from regular corporations? +
Usually when you start any corporation, you have to file a charter—a document establishes your company as a corporation. Your corporate charter must detail the governance, structure, objectives, operations, as well as other major details of the company. Your board of directors has to deliver on the objectives in your charter.
In a PBC, your board of directors has a broader mandate to not only consider the interests of stockholders, but also to deliver on different interests that are defined in the charter. For some PBCs, this might be a community-related cause, a social one or an environmental commitment to sustainability. That makes it official: the board of directors’ goal is to figure out what’s going to be in the best interest of the various stakeholders including public good.
The company must include a statement of its public benefit in the corporate formation documents on file with the state. Once a company becomes a public benefit corporation, it is required to balance the interests of its shareholders with the interest of those affected by the company, taking into account their public benefit.
What is Possible Finance’s Public Benefit? +
Possible’s public benefit is making a positive impact on underserved and low income consumers by providing greater access to affordable financial products and tools to improve financial health. Now that Possible is a PBC, we are required to consider the impact to customers and the communities we serve, in addition to the interests of our shareholders, as we develop financial products and services.
1 “The 2007–2008 Financial Crisis in Review.” Investopedia, https://www.investopedia.com/articles/economics/09/financial-crisis-review.asp
2 “Wells Fargo to Pay $3 Billion to U.S., Admits Pressuring Workers in Fake-Accounts Scandal.” Reuters, 21 Feb. 2020. https://www.reuters.com/article/us-wells-fargo-scandal-deal-idUSKBN20F2KN
3 “CFPB Orders Regions Bank to Pay $191 Million for Illegal Surprise Overdraft Fees.” Consumer Financial Protection Bureau, https://www.consumerfinance.gov/about-us/newsroom/cfpb-orders-regions-bank-pay-191-million-for-illegal-surprise-overdraft-fees/