TrustPlus

Is predatory debt costing your organization profits and impact? Predatory debt is a debt product that exploits borrowers by capitalizing on their urgent financial needs, per Neighborhood Trust Financial Partners' new brief, Predatory Debt: A New Definition and Why it Matters, which draws on the experience of TrustPlus clients and the expertise of our coaches. Among the key findings: 💡 Over half (55%) of TrustPlus’ clients have predatory debt at baseline. 💡 Among them, 94% had at least three products we identified as predatory. 💡 Clients with predatory debt have a median of 5 late payments, while clients without any predatory debt have a median of 0 late payments. 💡 Several products that we identified as predatory are among the 10 most common products on our clients’ credit reports. 💡 Clients who reported higher levels of financial distress were more likely to carry predatory debt. We set out to redefine predatory debt because so many of our clients are struggling to get their heads above water due to overwhelming, burdensome debt. But not all debt products are created equal: some carry a particularly high risk of causing financial harm due to high costs or by trapping borrowers in debt cycles, while other products can be helpful for affordably bridging a cash flow gap, covering an emergency expense, or consolidating other expensive debts. Developing a working definition of predatory debt enables us to parse out these groups to more effectively help our clients prioritize tackling the most burdensome debts. Predatory debt is characterized by the following: 😲 Excessive costs; 😲 Excessive or hidden fees; 😲 Hidden or misleading repayment structures; 😲 Weak underwriting; 😲 Trapping mechanisms; 😲 Exploitative targeting; 😲 Poor lender credibility. We hope that this new definition supports the work many of our peers are already doing to disrupt the harm of these legal but high-risk products, and mobilizes employers and member orgs who are becoming attuned to the scale of the damage these predatory debt products are doing to your workers and organization. Read Predatory Debt: A New Definition and Why it Matters: https://lnkd.in/eC8SY8E4 #financialwellness #benefits #financialcoaching #debt #humanresources #leadership

As we prepare to gather with family and friends to give thanks, we share a message of gratitude for you, organizations, #employers, leaders, who are investing in the financial health of your people. Your investment in the financial health of workers benefits them throughout the holiday season and beyond. It’s a testament to the fact that you recognize the financial challenges workers face, and are doing something about it, especially at a time when expenses spike, from turkey and travel, family and friends. From all of us at TrustPlus, wishing you a happy Thanksgiving! #humanresources #financialwellness #benefits #leadership

National Care at Home Month (National Alliance for Care at Home) celebrates and supports paid and unpaid caregivers and builds on the existing work of National Family Caregivers Month. This week we turn special attention to Home Health Week and salute the heroes among us who care for our loved ones along the home care continuum. We see you, we hear you, and we thank you. 👀👂🙏 May you have access to world-class financial coaching as a workplace benefit which will be good for you, those you serve, and the organization that pays you. 💲🎧💪 And, may the generosity of spirit you share with those you serve everyday be returned to you tenfold, this holiday season and beyond. ⛄🎁🙌 #HomeHealth #CAHM #financialcoaching #benefits #leadership

77% of workers say credit card debt is a problem, while 45% say they're distracted by financial stress on the job, per the 2024 Workplace Wellness Survey from Employee Benefit Research Institute and Greenwald Research. We explore why smart employers are turning to financial coaching to boost profits and impact in our latest article (link in first comment). TLDR: Personal, data driven, solves for interconnected issues. The virtue of personal financial coaching is that it is tailored to each member of your team, solving for diverse individual challenges amidst systemic ones like inflation, high interest rates, and the rising costs of financial services themselves. Employers who prioritize 1x1 financial coaching prioritize what data are telling us about reducing employee financial stress (literacy alone isn't enough), changing behavior, and creating a supportive culture where people can thrive. #CreditCardDebt #humanresources #benefits #financialcoaching

“Employers should offer and promote inclusive emergency and retirement savings plans and provide relevant financial educational resources and coaching,” says The National Strategy for Financial Inclusion in the United States: https://lnkd.in/dGDgvUpS. Here are key recommendations for employers from the strategy released yesterday by the U.S. Department of the Treasury: 💡 Employers have a significant ability to impact their employees’ current and future financial resilience and well-being, including through their insurance, retirement, and other benefit options. 💡 Employers in all sectors should evaluate their suite of benefits to identify opportunities to improve their employees’ ability to build emergency and retirement savings…For example, employers could raise the level of non-matching employer contributions that are made regardless of employees’ ability to contribute or use dollar caps for employer matches. 💡 Research suggests that auto enrollment is the most significant policy change that affects plan participation rates of lower-paid employees, and Black and Hispanic employees. The SECURE 2.0 Act allows employers to automatically enroll workers in sidecar emergency savings accounts linked to their 401(k)s known as “pension-linked emergency savings accounts,” and expands workers’ ability to make limited penalty-free withdrawals for emergency expenses. 💡 Employers are also well-positioned to provide unbiased financial advice and education for their employees. Financial literacy has a positive effect on retirement readiness and retirees’ satisfaction with their financial situation during retirement. 💡 By offering evidence-based financial wellness programs or financial planning services that educate employees about retirement planning, investment basics, and the importance of starting to save early, employers can empower their workforce to make informed decisions and build sufficient savings for the future. One nuance we’d add is the importance of coaching, like (completely objectively) ongoing 1x1 financial coaching from TrustPlus, because research tells us that financial literacy alone is not enough: “One-size-fits-all financial education has little to no effect on changing real-world financial behaviors. A meta-analysis of more than 200 studies found that educational interventions explained only 0.1% of the financial behaviors studied,” finds Martha Menard. Overall, The National Strategy for Financial Inclusion in the United States is a giant step toward financial security for all U.S. workers, with actionable steps for employers. Congratulations to everyone involved in creating it, including TrustPlus alum Kate Griffin! #employers #financialwellness #benefits

Financial concerns stress 58% of U.S. adults over the holidays, the top cited stressor, per American Psychological Association. Meanwhile, U.S. holiday sales are expected to grow by the slowest pace in six years, per the National Retail Federation, as shoppers slow spending on non-essentials: “We expect consumers will continue to be more price conscious and pragmatic in their spending decisions, looking for discounts and better value for holiday goods, as still-high interest rates and lingering inflation in some categories continues to be on their minds,” says NRF CEO Matthew Shay, per Reuters. Do your people have a go-to expert to avoid the financial stress that drags on your people, profits, and impact through the holiday season and beyond? In our latest article, TrustPlus Senior Financial Coach Elise Nussbaum shares her go-to strategies to help people avoid and minimize debt over the holidays (link in first comment). #debt #financialwellness #benefits #humanresources

🎉 As National Hispanic Heritage Month comes to a close, we celebrate Latino-owned businesses and the 3.5 million people nationwide LOBs employ. (We need a better acronym.) We consider 1 in 4 children in the United States is Hispanic/Latino per U.S. Census Bureau; the economic output of American Latinos would rank fifth in the world as a country per Latino Donor Collaborative and Wells Fargo, reports CNBC; and since 2007, the number of Latino-owned businesses in the United States has increased by 57%, compared to 5% among white-owned businesses, per Ana Valdez in a recent piece for Forbes Business Council. And we reflect on how between 2007 and 2022, annual payrolls of Latino-owned businesses soared by 123%, a testament to LOBs' growing role as a catalyst for economic and job growth. ¡Vamos! #NationalHispanicHeritageMonth #FinancialWellness #Benefits #SmallBusinessOwner

As we reflect on Indigenous Peoples Day and on Columbus Day, and on creating a future in which financial security is feasible for all, we see a bright future fueled by the ingenious spirit of younger Native individuals in the face of historic odds. Per the Federal Reserve Bank of Minneapolis, "Shedding light on Native American households’ financial stress:" 💡"Despite striking gaps in household wealth and geographic challenges in access to small business support, self-employment among younger Native individuals (i.e., those under age 35) has consistently approached or exceeded the national average for the past decade." 💲"Tribal governments own and operate innovative businesses that create jobs and use revenues to help fund critical services for communities." 🚀"...research has shown that the presence of Native-focused financial institutions in Native communities can lead to increases in individual credit scores through pathways such as providing borrowers in varied circumstances with access to diverse, high-quality loan products." It's a bright future that relies on access to quality financial products and services, in Native communities and beyond. #IndigenousPeoplesDay #ColumbusDay #FinancialWellness #Benefits #InclusiveEconomy

Financial stress including a high debt-income ratio puts physical and mental health at risk, says Oscar Jimenez-Solomon (Jimenez Ugarte), PhD, MPH, a research scientist at Columbia University Irving Medical Center: “Studies show that people who have difficulty repaying their debts and have a high number of debts have a significantly greater risk for depression and suicidal thoughts and behaviors.” And those are bad for business and impact, profit and people. With credit card debt at an all-time high and borrowing costs expected to drop following the recent cut to the Fed’s federal funds rate, now’s a strategic time to ensure your people have a plan to reduce debt.   In our latest article, “How to reduce debt, boost mental health among workers,” we dive into the astronomical costs of financial stress and its impact on mental health. And we explore what Jiménez-Solomon’s research tells us about the importance of having a plan. When your people have a plan to vanquish their debt, their financial health and mental health benefit. And that’s good for everyone, people and organizations alike. Read more via the link in the first comment. #employers #mentalhealth #financialwellness #benefits

Borrowing costs are expected to drop on credit cards, auto loans, and mortgages, following the cut to the Fed's federal funds rate. Do your people have a plan, to take advantage of the shifting interest-rate landscape, and a go-to expert to talk to? Financial stress from debt (medical, student, credit card, auto) weighs on your people and on your organizational performance. In our latest article, "Debt reduction strategies for workers," we cover what your workers should know about debt management plans, debt settlement, and two new products we've introduced to help people save money by refinancing their credit card and auto debt: 🚗🚙 TrustPlus Auto and debt consolidation loans from TrustPlus in partnership with community credit unions. 💰💲 You can read more at the link in the first comment. #debt #financialwellness #benefits #humanresources #smallbusiness #financialservices