James Gutierrez, Fintech Entrepreneur, to Launch New Platform to Serve the Underbanked
Fintech pioneer James Gutierrez is once again developing a solution to help address the difficult and insidious issue of underbaking. His initiative is designed to address populations that often are overlooked by traditional banking and insurance systems, including Latinx and underbanked neighborhoods.
Gutierrez, who served as chief executive officer of Oportun from 2005 to 2012, has decades of experience in addressing the inequities in the finance systems throughout the world. His latest venture is a mobile-first platform designed to connect these underserved and underbanked communities with banking and insurance options.
The goal? Provide affordable, accessible, and reasonable options for individuals and families that allow them to build credit, make purchases and develop financial security.
a champion for the Underserved
Throughout his career, James Gutierrez has been a fierce advocate for the rights of those whose traditional finance systems fail. The COVID-19 pandemic and resultant economic slip have only worsened the impact on some of the most vulnerable populations.
For many communities, access to basic, fair, and affordable financial services is nonexistent. Limited access has multiple repercussions. For some, it means not being aware of the options available, due to a lack of education or community resources.
That can mean families are unable to open a checking account due to not having enough cash. A lack of a Social Security number means that even those with good credit cannot open a bank account.
Those realities have given rise to the check-cashing industry, which typically uses predatory tactics to keep underbanked families in a cycle of financial vulnerability. These businesses often offer payday loans with exorbitant interest rates, upwards of 500 percent in some cases.
For people with no other options, it’s the only way to pay bills.
Often these populations are Black or brown and are evidence of a larger social justice and equity issue.
Even in those areas with some banking services, the barriers to entry can be steep. Opening a checking account often requires having a minimum balance. Loans require some kind of credit history, which for many in underserved populations is impossible to develop.
Those realities lead them back to predatory lenders and the cycle continues.
Gutierrez has understood these complexities and worked hard to address them. At Oportun, he led the company’s work to provide more than 500,000 Hispanic people with loan opportunities.
James Gutierrez has also lobbied to get more laws passed that provide access to loans to those who need them the most. During the pandemic and the resultant economic downturn, he’s pushed even harder for CommunityDevelopment Finance Institutions, which are private entities dedicated to providing affordable financial products in distressed communities, and MinorityDepository Institutions (MDIs), which are majority-owned or majority-governed by people of color.
Consider, however, the scope of those banking institutions. As of 2020, there were just142 MDI banks in 28 states, the District of Columbia, Guam, and Puerto Rico, and520 MDI credit unions in 36 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.
By providing alternatives, James Gutierrez hopes to shift the power away from centralized financial institutions and into the control of the people most in need.
