Canada Focus B.C.

Dividends in a hard place

A unique institution brings banking to the poor and destitute

Jennifer Hunter May 17 1999
Canada Focus B.C.

Dividends in a hard place

A unique institution brings banking to the poor and destitute

Jennifer Hunter May 17 1999

Dividends in a hard place

Canada Focus B.C.

A unique institution brings banking to the poor and destitute

Jennifer Hunter

Four Corners Community Savings has all the fittings of a traditional bank: the neo-classical architecture, including the requisite Corinthian columns flanking the entrance, the chiming clock outside, the oak-panelled walls, the lofty ceiling. But although everyone in the Downtown Eastside of Vancouver, considered one of the poorest neighbourhoods in Canada, thinks of Four Corners as a bank and calls it a bank, it is not one in the legal sense. Its real title is B.C. Community Financial Services Corp., and it is a unique provincial Crown corporation, set up in a former Bank of Montreal branch at the corner of Main and Hastings streets, to do what traditional banks have failed to do—help the disadvantaged cash welfare cheques, borrow money, set up savings accounts, even get a line of credit. “We have turned the entire model of a bank upside down,” says Four Corners chairman Jim Green. “Banks go after profit. We seek to service

‘We have turned the entire model of a bank upside down. Banks go after profit. We seek to service people who are in poverty or neglect.’

people who are in poverty or neglect.” Since it started business in April, 1996, Four Corners has opened 4,780 accounts largely on behalf of lowincome earners, welfare recipients, single-parent families, the disabled and the mentally ill, many of whom come from across Vancouver to bank there. Unlike the chartered banks, trust companies or credit unions, Four Corners has no service charges on chequing and savings accounts for those on social assistance. “There are a lot of customers who have never been in a bank before,” says teller Lome Gray, 35, a former Montrealer who had himself been on welfare—like many ol the other six tellers— before being hired at Four Corners. “I’ve had people ask me if they were allowed to put money in the bank, they are so used to those cheque cashing places.” Once a month, on “Welfare Wednesdays”—when the doors open at 9 a.m., half an hour earlier than usual—there can be up to 1,000 people visiting Four Corners throughout the day to cash their social assistance cheques. Coffee is

offered, chairs laid out, toys are made available for the kids, and disabled customers are served first. Sometimes the lineup can extend out onto the street and around the corner, and the wait can take up to three hours. Since everyone is required to take a number, customers can leave and come back later. “This place has provided a sense of security for many downtrodden folks,” says account holder Christopher Aman, 51, a physically disabled man who lives nearby in a flophouse hotel on East Hastings Street.

Four Corners was conceived six years ago by Premier Glen Clark, who was then-minister of employment and investment, and is modelled on the South Shore Bank, a Chicago-based bank for lower-income people. Clark knew residents of the Downtown Eastside were having trouble cashing their welfare cheques, particularly if they did not qualify for a bank account because they did not have proper identification or an address. (Chartered banks now say they have relaxed the rules for poorer clients and are more sensitive to their needs.)

Canada Focus B.C.

Four Corners helps the disadvantaged set up savings accounts—even get a line of credit

Many area residents were going to money marts, which charge a usurious 2.9-per-cent commission on welfare cheques plus a $1.99 cheque cashing charge.

(That means a $30 deduction from a social assistance cheque of $969 for a single Vancouver mother with two children.)

Other Downtown Eastsiders were cashing cheques at the local pub or store, but were then expected to spend there. So Clark recruited Green, a former U.S. draft dodger and local community activist, to organize Four Corners. Special legislation was enacted to create the corporation and $10 million was provided for capital and start-up funds. The 11 people on the board of directors include community workers, a blue-chip lawyer, a university business professor, a union president and a film executive.

Green saw Four Corners as a way to generate economic activity and create employment in the area, where the average income is less than $ 10,000 and there is a pandemic of AIDs and intravenous drug use. And in some ways, Four Corners has begun to have a small impact, especially for people such as Karen Wolfchild, a 32-year-old mother of four who has spent the past 12 years in a wheelchair. Wolfchild is a teller at Four Corners and this is her first real full-time job. “It has,” she says, “given me a lot of selfesteem. I feel good about what I am doing.”

But getting Four Corners up and running has not all been smooth sailing. Opinions on the quasi-bank are “sharply mixed,” notes a report called “Banking and Poor People: Talk Is Cheap,” released by the Ottawabased National Council of Welfare. “Some see the bank as a cosdy experiment that is unlikely to succeed,” the report notes. “Others call it a bold and novel attempt to address the social and economic needs of people in the Downtown Eastside.” With no service charges on most accounts, the institution has generated income by investing its deposits in the money market. Four Corners has also started to be more aggressive about making

personal and business loans to improve return on capital. Still, since Four Corners started attracting business in 1996, losses have been recorded every year; by December, 1998, they stood at $450,000. Until lending can pick up, and until more affluent customers decide to join the ranks of the poor and bank there, profits may remain elusive for some time. “No one really knows how to make something like this work,” Green concedes. “Its not a standard financial institution and it is difficult to regulate.” Four Corners has also been slow in attracting large depositors, with some groups balking at banking at Main and blastings, considered one of the most dangerous corners in Vancouver. Still, a few large unions, such as the Canadian Union of Postal Workers and the Canadian Auto Workers, have made deposits. So have church groups, student societies and local associations, but Green recognizes more needs to be done to expand the deposit base. One way to do this is by providing access to automatic tellers. There are no plans to install an ATM at Four Corners, but automatic teller cards were issued this month and Green anticipates that will attract a more diverse mix of clients to Four Corners, since they will be able to do their banking from anywhere in the city. “Once that happens,” he crows, “the sky will be the limit.”

Four Corners could become a political hot potato if a non-NDP government comes to power—given its association with the premier. Green recognizes that the present government—which sits at an uncomfortable 18 per cent in the polls—could be ousted when the next provincial election rolls around in two years. But he is confident Four Corners will not fall with it. “With the list of supporters we have and with over 4,000 people relying on us, it would be difficult for anyone wanting to close us down,” he declares. “We used to have that fear, but we don’t now.” Clearly, he is banking that a little bit of success will go a long way. EH]