Exodus Financial Services
Report date
October 2023
What has been most instrumental to your progress?
While our proposal was to expand our municipal-level reform efforts and replicate the successful rate cap campaign from Moorhead, and our early base-building efforts in several communities reflected that goal, the results of the 2022 election necessitated a shift in focus to a statewide reform campaign. As such we had to scale up our issue education, outreach, and stakeholder convening activities to support legislation at this level. Our ability to pivot quickly and effectively was entirely due to our earlier efforts to build relationships and convene stakeholders on this issue in key communities in Minnesota as these communities would be tremendously influential as the conversation shifted from city halls to the State Capitol.
Merging the Minnesotans for Fair Lending coalition with Exodus Lending offered us a streamlined way to convene the Minnesotans most directly impacted by the issue of predatory lending, understand more fully the complexities of the issue, and ensure that the stories of the real people who are impacted were uplifted, shared, and driving the conversation about policy change. We were also able to more seamlessly invite the individuals served by Exodus Lending’s programs into the advocacy process - helping to forge a leadership pathway that we continue to grow and strengthen.
The leadership team of individuals and organizations that we brought together to navigate through a complex and winding legislative process was key to our ultimate success. The relationships needed to bring that team to the table were only made possible through the preceding years of deep partnership and cycles of learning and problem-solving at the community level. The pivot from a local to a statewide campaign didn’t cost us momentum or leadership, but the statewide campaign was made possible because of the local efforts that came before it and the collective understanding and leadership that was formed in communities in the years preceding.
Key lessons learned
We grew in our understanding of how deeply contextual this work is. Conversations about money and debt, values around lending and borrowing, and the resources available to help people in any given Minnesota community all vary, sometimes widely, from one part of Minnesota to another and require skilled leadership and expertise embedded in those communities to help convene and focus efforts that will lead to change. Likewise, attitudes and experiences around advocacy and constituent activity vary and there is no one-size-fits-all approach to supporting constituent engagement.
We learned a lot about the disconnect that can often exist between the legislative process and the people experiencing the issue in our communities. We carved out a role for ourselves as a bridge between the grassroots power we were building on the ground and the lobbying and legislative relationships we were building at the capitol. It was often difficult to navigate the speed and complexity of the lobbying process and our commitment to advocacy work that centered and was directly accountable to the Minnesotans who have directly experienced the problem this legislation would solve. The lessons learned from the push and pull of lobbying and organizing will serve us well as we bring these values into our next issue campaign.
Reflections on the community innovation process
Collaboration continues to be our most significant strength and defining quality. Bringing together a coalition of organizations ranging from small neighborhood-based nonprofits and individual congregations, to statewide advocacy groups and Minnesota’s largest social services organization offered us a strong network of support while keeping us rooted in the issue as it’s experienced on the ground in Minnesota’s communities. This offered our coalition the ability to speak with authority on the problem and our identified legislative solution(s). It was these relationships that kept this issue afloat even in the midst of the most productive (and often chaotic) legislative session in memory.
The most consequential collaboration from this grant period was merging our coalition within Exodus Lending, allowing us the opportunity to weave the direct service of getting people out of payday loans with the invitation into policy change efforts. While this pairing is only a year old, it’s been clearly affirmed as a decision that streamlines both the relief efforts for impacted Minnesotans and issue education and base-building across the state.
The most consequential collaboration from this grant period was merging our coalition within Exodus Lending, allowing us the opportunity to weave the direct service of getting people out of payday loans with the invitation into policy change efforts. While this pairing is only a year old, it’s been clearly affirmed as a decision that streamlines both the relief efforts for impacted Minnesotans and issue education and base-building across the state.
Progress toward an innovation
In this grant period, we achieved the innovation that we were seeking since our our first grant with the Community Innovation grant - a policy solution to the problem of predatory payday lending that grew out of a deep communal understanding of the problem, a period of testing possible solutions at the local level, and ultimately a statewide policy change that was led by the individuals and communities who most directly experience the problem. The progress wasn’t linear and our understanding of the community need and the most equitable solution for the right time and scale changed over time, but we’re confident that the new Minnesota interest rate cap on payday loans will be a sustainable and effective breakthrough in protecting financially marginalized communities in Minnesota when it’s implemented on January 1, 2024.
What's next?
We plan to build on the momentum from this innovation and transition right into the natural next issue campaign for the coalition we’ve built: a legislative opt-out of the Depository Institutions Deregulation and Monetary Control Act of 1980. This law allows for state-chartered banks in states with fewer consumer protections than Minnesota to lend to Minnesotans at higher rates than licensed MN based-institutions can charge. In recent years this loophole has been widely exploited by online fintech lenders who essentially launder their loans through state-chartered banks in less-regulated states. Exodus Lending sees these loans every day in our predatory loan refinancing program, and our hope is that Minnesotans for Fair Lending will lead a campaign that results in Minnesota becoming the third state in the nation to opt-out of this rate-cap exportation, following Iowa and Colorado. Owing to the merger with Exodus Lending, the next campaign will continue to build a base of MN borrowers most impacted and targeted by all forms of predatory lending. While we seek to ultimately end all forms of predatory lending in MN, we will continue to scale up our own small dollar lending solutions.
If you could do it all over again...
The long, slow work of building relationships and bringing people together is always worth it, regardless of the scale of the problem-solving effort. We had statewide success this year after a decade of trying to solve the problem at any level where there could be movement - from city ordinances to federal legislation and consistently struggled to overcome powerful opposition. Ultimately, it was those relationships that were forged over 10 years of convening stakeholders, learning from those most impacted, and testing a variety of solutions that were key to making statewide change that will improve people’s lives in Minnesota. As we build on this momentum and look towards what’s next for Exodus Lending and MN for Fair Lending, we’ll remind ourselves of that work that may be easy to overlook or see as tedious - the one-on-one conversations with community members, the church basement convenings of people who care - are central to our efforts.