Traditional Financial Institutions And Alternative Financial Services Essay

Traditional Financial Institutions And Alternative Financial Services Essay

Length: 2874 words (8.2 double-spaced pages)

Rating: Strong Essays

Open Document

Essay Preview

This paper will demonstrate the gap between traditional financial institutions and alternative financial services in vulnerable communities. In the past decade, low-income communities such as Baltimore City and the individuals who reside there have experienced limited access to financial services, affordable credit, and investment capital through traditional financial institutions. This is also known as “redlining” and today this limitation continues persistence of discriminatory lending practices in Baltimore city. Even so, this problem has multiple causes, including historical patterns of racial and ethnic discrimination, banks’ and thrifts concerns about profitability, suburbanization and the flight of capital out of the inner city, and the restructuring of the financial services industry.
According to the National Community Reinvestment Coalition, (NCRC) map, Alternative Financial Services (AFS) had dominated low-income vulnerable community such as Baltimore city. These communities refer to AFS as their community development financial institutions. Even though some may consider AFS centers as providing a convenience to its consumers, it may come at a huge price. These AFS they exploit the consumers they serve, while providing a facade of convenience. The most common argument against the use of AFS is the fees associated with them. Individuals who cashed checks at these centers can incur an average of 3-5% of the check amount in fees, regardless of the nature of the check. On average, the annual costs of using a financial service center for check cashing is greater than fees associated with using a checking account for similar needs. Aside from the convenience AFS centers may present, there is an automatic danger associated w...

... middle of paper ...

... and as individuals develop out of their poverty situations, so do communities, and the two become mutually reinforcing, creating a comprehensive and integrated model that addresses social and economic exclusion and social disintegration which is necessary for effective poverty eradication.
Finally, social work advocacy on a macro level to ensure equal access is critical. To increase opportunities to the low-income and most oppressed populations, we need to try to reduce the growing wage inequality by, joining political organizations that seek to limit the political power of wealth so as to facilitate the election of officials less indebted to economic elites and permitted to support measures to reduce inequality, lobby for direct job creation by the government. Moreover, engage in campaigns to raise the minimum wage such as Earned Income Tax Credit (Goldberg, 2012).

Need Writing Help?

Get feedback on grammar, clarity, concision and logic instantly.

Check your paper »

Credit Unions And The Financial Market Essay

- Graduate Research Paper: Credit Unions in the Financial Market Literature Review Knowing the history of credit unions and how they were originally structured, it is important to understand where credit unions will be going in the future. It is anticipated that there will be less than 3,000 credit unions in the next 25 years. This is down considerably compared to the more than 6,000 existing credit unions in 2015 (Strozniak, 2015). Competition for credit unions will continue to be other financial institutions and financial services providers, but there will also be competitors entering the market, such as Peer-to-peer lenders and other fintech start ups that will begin to take over some of th...   [tags: Economics, Monopoly, Bank, Financial services]

Strong Essays
1095 words (3.1 pages)

Comparison Between Islamic and Conventional Banks Essay examples

- ... Even though Shari’ah discourages the elements of Riba, the Islamic society holds no obligations towards the earning of true profit, which is considered to be an entrepreneurial reward since it is beneficial to the society. The removal of riba was modernized based on values of stability, security and growth, which result in the sharing of the risks between the borrower and the lender (Zaher T. S. and Kabir Hassan M. 2001: 156 – 157). It is forbidden in Islam to have a fixed or pre- determined return on financial transactions instead of an uncertain rate of return, such as those that are associated with earning a profit....   [tags: financial institutions, muslims]

Strong Essays
1298 words (3.7 pages)

Non Traditional College Students Essay

- Non Traditional Students According to current estimates approximately 75 percent of college students are now nontraditional students – older than 25, attending school part time, and having delayed entry or reentry into college for a variety of personal reasons. Post secondary education is needed by such students to develop their careers and to acquire new skills and knowledge in a global society where they are likely to have longer life spans than did workers in the past. This trend is not restricted to North America; it is a worldwide phenomenon....   [tags: programs, maturity, accommodations]

Strong Essays
848 words (2.4 pages)

The Expanding Environment for Non Traditional Students Essay

- Non Traditional Students According to current estimates approximately 75 percent of college students are now nontraditional students – older than 25, attending school part time, and having delayed entry or reentry into college for a variety of personal reasons. Post secondary education is needed by such students to develop their careers and to acquire knowledge and skills required by a constantly changing global society. This trend is not restricted to North America; it is a worldwide phenomenon....   [tags: education, options, degree]

Strong Essays
994 words (2.8 pages)

The Dangers of For-Profit Education Essay

- An attractive, and seemingly affordable, alternative to traditional universities are the for-profit institutions that have gained popularity in recent years. They offer the convenience of community college accessibility with the promise of full degrees. The concept has been around for decades, Devry Institute can trace its roots back to 1931 ("Devry university historical," ), however they truly flourished with the 1992 redefinition by Congress of the 90-10 rule which defined and institution of higher learning for the purposes of government student aid ("Q&A on the," 2012)....   [tags: predatory learning institutions]

Strong Essays
1590 words (4.5 pages)

Essay about Literature Review : Financial Stability

- Literature Review Financial Stability. According to Goodhart (2006), financial stability has proved difficult to comprehend, mainly because there is no one accepted definition of what financial stability means. However, a vast national study by the United Way Worldwide identified two critical components that must exist in order for families to attain financial stability: stable adequate income and stable adequate financial resources (Valley of the Sun United Way, n.d.). Moreover, a report from the Corporation for a Skilled Workforce and United Way Worldwide (2011) stated that financial stability is achieved when families obtain sufficient resources via jobs that render enough income to sust...   [tags: Poverty, United States]

Strong Essays
1411 words (4 pages)

Essay about Cultural and Financial Management

- This paper will scrutinizes the actual impact of culture on financial management. Before I proceed to what I believe to be not only a factually inept argument of cultural influence on economics but also a grossly delusional and rather prejudiced view as well, I must first set some sort of context to what I am alluding to. The assignment stipulates for me to, address if the framework of financial management can apply to any country or culture. The simple and short answer to this is “no”, financial management is different depending on the country and or culture....   [tags: Business Management ]

Strong Essays
1494 words (4.3 pages)

Essay about Community Based Corrections: Viable Alternative to Incarceration

- Community-based corrections alleviate overcrowded correctional facilities, reduce taxpayer burden, and rehabilitate offenders, while providing effective, efficient low cost methods of supporting public safety, community rehabilitation, behavior modification and personnel responsibility, because it uses multiple approaches and involves both legislative and judicial personnel in all steps of the process. Community-based corrections facilities are located in the community and support diverse rehabilitative programs including restitution, community service and repayment of monetary fines (Moses, 2007)....   [tags: legal reform, social reform, criminal justice]

Strong Essays
1689 words (4.8 pages)

Modern Portfolio Theory and Markowitz Efficient Frontier Essay

- 2. Literature Review This chapter will explore the theories associated with the Modern Portfolio Theory and Markowitz efficient frontier. The understanding and role of alternative investments and emotional assets in the financial world are also exemplified. The chapter will then conclude by analysing the importance of alternative investments and emotional assets to a portfolio using existing academic literature. 2.1 Introduction In portfolio optimisation, investors should keep in mind that diversification is key to balance risk and return....   [tags: alternative, investment, emotional, assets]

Strong Essays
2282 words (6.5 pages)

The Benefits of Online Learning Essay

- Online education is an alternative way of study that has been setting ground steadily among students. Also known as e-learning or distance education, it is a style of learning in which the student is not required to physically sit in a classroom. As a matter of fact, online students have the word as their classroom and the freedom to access the course materials at will because of the flexibility e-learning provides (Bowen, Chingos, Lack & Nygren, 2013). The office of Educational Technology of the US Department of Education reports that online learning offers a potential for educational productivity (Bakia, Shear, Tomaya & Lasseter, 2012)....   [tags: alternative, study, elearning, productivity]

Strong Essays
826 words (2.4 pages)