Independent Banker - October 2020 - 54

financial health for all. Recent
data shows a substantial increase
in financial anxiety, even though
just a third of respondents had
actually experienced an interruption
Money anxiety:
then and now
in income.
" That anxiety comes from the
unknown, the interconnection of the
financial crisis and the health crisis
and the inability to predict how it
will affect your job, family, the small
business you run or even the supply
chains you access, " Thompson says.
" We've known for a long time that
there's a strong connection between
the stress you feel about money and
how it translates into physical health
and state of mind. "
Understanding financial anxiety
Carver State Bank, a $46 millionasset
Black-owned community
bank in Savannah, Ga., serves a
low- to moderate-income community
often defined as the working poor.
This group is far more likely to be
underbanked or unbanked than
white households, says Robert
E. James II, president of Carver
Development CDE and Carver State
Bank's director of strategic initiatives.
Many in minimum-wage jobs related
to tourism have been laid off, while
essential workers in grocery stores
and those who make deliveries worry
about the risk of getting sick and
losing income.
" There is tremendous money
anxiety, " James says. " We're hearing
that people are concerned about
their future ability to earn money
at the individual level, and we're
hearing from people who are either
heads of churches or other nonprofits
or small businesses that they are
concerned about the future viability of
their organizations.
" There is this long-term anxiety
where we don't see what the end is
going to be. When assistance runs out,
they're not sure how they're going to
make ends meet. "
Carver State, which is a community
development financial institution
54 Q ICBA Independent Banker Q October 2020
For many Americans, the last time financial
anxiety was this high was during the Great
Recession, but the feeling looks different than it
did back then.
That crisis emerged when the housing bubble,
propelled by subprime lending, burst. That's a
far cry from today, when new home purchases
and refinancing are in high demand due to low
interest rates.
" In 2008 and 2009, people were desperate,
because they couldn't afford their house, " says
Tim Cruciani, president of Citizens State Bank
in Cadott, Wis., which services $80 million
in secondary market loans and is seeing
surprisingly few request for deferrals. " When
you pile on foreclosure after foreclosure after
people are put into mortgages they couldn't
afford, it increases the supply of homes and
devalues homes. "
Today's anxiety centers on uncertainty, says
John Thompson, chief program officer for the
Financial Health Network, a Chicago nonprofit.
The income volatility associated with job
instability is overwhelming people as businesses
and schools fluctuate in reopening.
Now, money anxiety takes the form of small
business owners worrying about covering
payroll and expenses while managing their
businesses in an environment that is continually
changing, says Kevin Langin, senior director of
public relations and communications for First
National Bank of Omaha in Omaha, Neb. For
others, the focus may be on how to pay bills
when they're unemployed or if their work hours
have been cut.
But it's not all bad news. " A positive difference
from the Great Recession is that, overall, people
were carrying less debt and were better off
financially at the start of the pandemic then they
were 10 years ago, " Langin says.
Meanwhile, banks are in a better position to
help. " Banks have more tools now, " Cruciani says
of deferrals and other modifications made due
to lost income. " When people can't afford their
homes because they were misled about their
loans, it's a very difficult situation to manage. "
Independent Banker - October 2020

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