The New York Times posted an article recently [The Rich Are Preparing for Coronavirus Differently, March 5, 2020], that details how wealthy individuals and their families are prepared for the COVID-19 health pandemic. Their efforts reflect the benefit of access to resources which includes purchasing pricey air masks to travel on private planes or acquiring expensive survival kits.  It would appear that is easier to manage a crisis for those who can afford an $8,000 concierge medical service than those who do not have the same advantages. In this case, the challenges of addressing the current situation are much different for the average American.

The 2005 catastrophe — Hurricane Katrina — provides vivid and often disturbing imagery of how low-income residents are affected when a calamity hits.  The distressed wards of New Orleans had families with small children in soiled clothes waiting in line at food distribution centers. These residents were unable to access services and aid because they were cut off from support mechanisms.  They lost everything.  We know that 40% of Americans who, according to the “Report on the Economic Well-Being of U.S. Households in 2018 – May 2019” released by the Board of Governors of the Federal Reserve System, would have to borrow/sell or be completely unable to handle a $400 emergency expense.  In the case of a state of emergency, where we now find ourselves, COVID-19 is fundamentally changing how we live – impacting everything from workdays and class schedules to public events and Broadway performances.  As Hurricane Katrina taught us, we should assume that the needs of many Americans may go unaddressed.  Consequently, we need to employ new ideas and strategies to support our most vulnerable communities.

As the founder of a fintech platform that addresses a market failure for Americans who exist in the economic margins of our society, my antennae are aflutter. For many Americans, there is a multi-prong approach to preparing for an emergency: keep cash on hand, have access to a secure bank account with a debit card ready, and if you are fortunate enough to have a credit card with some borrowing capacity available. But, for those who only operate in cash, or rely on check cashing, pawnshops, or payday lenders as their financial institutions, which is 50% or more in Black and Brown communities in this country, they will not fare well when they cannot access these facilities or they run out of cash. A SAMHSA (Substance Abuse and Mental Health Services Administration) report states that “people who are not poor are more likely to have their savings in various places, including financial institutions, which means their wealth is better protected from natural disasters.” [SAMHSA: Disaster Technical Assistance Center Supplemental Research Bulletin, Greater Impact: How Disasters Affect People of Low Socioeconomic Status, July 2017].   As COVID-19 is demonstrating, a lack of access to basic financial services contributes to the ever-widening wealth gap in this country.  This does not have to be the outcome.

In an era of accessibility to the digital economy, providing all communities, especially disenfranchised ones, access to safe and secure banking products must be a priority.  The solution hinges on our ability to give everyone a no/low-fee mobile banking platform.  As federal, state and local governments seek to provide financial resources to families bolstered by efforts in the philanthropic and private sectors, how are we going to get monies to people in a safe, secure and efficient way?  All of us deserve the same financial safeguards – regardless of your zip code, ethnicity, and status.  This can only happen when we reimagine how our financial services infrastructure serves all of us.  MoCaFi is committed to being a part of the solution, strengthening our nation and protecting the most vulnerable amongst us in these unprecedented times.