The National Freedom Network (NFN) is a nonprofit whose mission is to address rampantwealth inequality through financial literacy. NFN uses financial literacy seminars to introduce the basic tools of credit management and saving. Instead of using high-interest payday loans or car title loans, NFN teaches credit and debt management. The participants learn to manage their finances to increase savings and reduce debt.
NFN firmly believes that debt management and saving for the future can turn change the future of families. NFN demonstrates how families can grow their assets and increase their financial security. The NFN is a member of the FDIC Money Smart Alliance and incorporates its curriculum into classes.
Financial literacy classes are needed now more than ever. Financial instability leads to high risk choices as individuals seek to make ends meet. A study conducted by the Federal Reserve Bank found that more families seek payday loans to make ends meet especially since the Great Recession of 2008. A 2012 Pew Charitable Trust study found that payday loan recipients used the loans to cover ordinary living expenses over the course of months not for emergency circumstances. Auto title loans are an example of the most egregious method of predatory lending in poor and low-income communities. One in five individuals lose their vehicles when they use auto title loans and the Consumer Financial Protection Bureau found those that paid off the loans paid exorbitant interest rates averaging 300%.
Mainstream loans and access to credit is denied to poor and low-income individuals and families. High interest rates and exorbitant fees are in some cases the only choice. An FDIC study found where individuals have low income, poor credit and are unbanked, they are not eligible for mainstream financial services. Basic financial tools are needed. NFN teaches credit correction and management, budget management and demonstrates how to live within earned income.