A REFRESHED BENEFICIAL STATE WEBSITE
I hope this letter finds you enjoying Holidays with your families and friends. As your bank, we try constantly to improve how we serve you and the values you hold dear. We surely fall short still but our intentions are to fulfill the promise of Beneficial Banking. As a basic commitment to you but also Inspired by the generosity of this season, we are launching a refreshed version of our website today. We hope the new version offers improved navigation, more content when and where you want it, and a cleaner look and feel. Please unwrap it, test drive it, and provide your feedback as a gift back to us.
RECOGNIZING AND SERVING NEEDS
The Holiday Season highlights our connections and therefore our implicit agreement or compact to tend the collective whole. At OPCB, we rededicate ourselves to addressing the vulnerability of many at these times. It is only together that we can meet complex societal issues -- like extreme income disparity, persistent and segmented unemployment, and unsustainable resource development and use. The joy of the Holidays is reflected in our coming together to solve these problems.
Among the complex systems most dear to us at OPCB during the Holidays are those related to financial services -- in particular, access to credit for unanticipated or seasonal needs. After all, who doesn't give their credit cards a workout during this season? But while borrowing needs can certainly increase from the human desire to give gifts related to the holidays, for many those needs are a constant given the state of our economy. For them, the lean times of winter stretch on into the foreseeable future and statistically, most of them have no access to responsible credit at all.
ACCESS TO CREDIT FOR ALL
All the more reason exists then to tend carefully our collective access to credit at all times. For credit to be there to support any of us, it must be accessed responsibly by all of us. We saw too closely how terrible incentives in the financial system produced a debt bubble which in turn produced a housing bubble which upon collapse threatened our entire national economy. As many among us struggle to rejoin financial sustainability, we must work hard to provide debt that builds resiliency and even harder to avoid debt traps that doom takers to financial ruin.
At OPCB, we have been piloting a debt product that we hope will provide just such a helping hand up. The PAL loan, our friendly emergency loan, is a properly amortized, reasonably priced extension of unsecured credit up to $1,000 that meets all FDIC standards for small dollar loans. With nearly 1,000 loans representing about $1MM outstanding to date, we are studying both the performance of the portfolio as well as the structure and delivery to find the product that will produce the most accessible and enduring basis of relief and resiliency.
Individual experience will vary of course but overall, we are striving to find the portfolio dynamic that is sustainable enough for not only OPCB but any bank to offer this product. The stakes are very high. In the absence of such a product, those in need have become the victims of a payday lending system that is bankrupting whole communities. Based on a debt spiral that maximizes return to the capital at the same time it maximizes debilitation of the borrower, payday lending comes as close to legalized loan sharking as politically palatable. It's time we create the conditions to eliminate payday lending as we know it. We need mass access to responsible unsecured credit that undermines both the political rationale for payday lending and the unconscionable lack of policy that enshrines it.
A BENEFICIAL CREDIT CULTURE
Nonetheless, the responsibility for a healthy credit culture does not rest entirely on the financial service industry. Borrowers have a critical role in ensuring that access to credit remains theirs for the uptake. While a certain number of borrowers will default by statistical odds from setback, the overall performance of the portfolio depends also on responsible borrower behavior. Like many collective endeavors, good individual behavior derives not just from personal consequences but from a commonly held "culture" around borrowing that makes repayment a strong mores. Our challenge at OPCB is to engage our borrowers in the PAL program in a way that brings out the best in their behavior to the betterment of all borrowers -- current and future.
While we may look self-serving when we urge borrowers to prioritize their debt repayment*, in the end that is what will save our society as well as their household finances. What is at stake is the availability of a broad borrowing system at all. We may not feel it is our duty to protect access to credit but a society that does not offer credit will soon live with the negative impacts of personal tragedy writ large. In a sense, we all need debt and we all must support a healthy credit culture as a result. To borrow is human, to repay divinely satisfying -- refilling coffers for the needs of tomorrow and affirming our vital social compact to one another.
Have a Happy, Healthy and Prosperous New Year!
Co-Founder & CEO, Beneficial State Bank