Dallas fintech Stretch to offer former prison inmates bank accounts
Stretch Finance, a Dallas-based fintech, is developing a bank account offering for those about to leave prison.
“We work with incarcerated people to set up a free checking account prior to their release,” the fintech says on its website.
The start-up’s aim is to help America’s formerly incarcerated people transition back into the country’s economy.
Co-founders Yasaman Hadjibashi and Keith Armstrong are behind Stretch. FinTech Futures reached out, but the two aren’t ready to reveal more about the venture. Currently, all that exists is a landing page.
Hadjibashi is a managing director at Citi. He heads up the bank’s data and analytics division globally for its consumer bank.
Prior to Citi, Hadjibashi spent more than seven years at Barclays, where he built out Absa Group’s data and product platform team from scratch out of Johannesburg.
Fellow co-founder Armstrong, a Techstars alum, started out in South Africa as a microfinance consultant. He co-founded Abe AI, a conversational banking platform for banks. The company later sold to Envestnet | Yodlee.
Opening a bank account in prison
Prison inmates can open a bank account at any time via a bank, but there are conditions. The prison has to be the address on the account.
Authorised prison staff can inspect inmates’ financial records at any time. The accounts can’t offer users credit cards or other forms of credit. No cash or cheques can be handled by the customer in prison.
According to The Information Hub, a resource for understanding how criminal convictions can affect daily life, banks “usually refuse” to open accounts on behalf of inmates.
“They may not have been trained to deal with applications from people in prison or they may think they are taking a risk.
“At a more senior level, some banks are worried about risking their profits and their image.”
The US prison population has increased by 500% over the last 40 years, according to data from The Sentencing Project. Such mass incarceration has seen many companies exploit inmate labour.
As the Prison Policy Initiative highlights, incarcerated individuals earn an average of $0.14 per hour. Compared to the federal minimum wage, which is more than 51 times that, at $7.25 per hour.
“There is a tremendous amount of financial exploitation and predation on the part of corporations on all people who are incarcerated and their loved ones, regardless of the facility operational structure,” Bianca Tylek, executive director of Worth Rises, told Yahoo Finance’s “Illegal Tender” podcast last year.
It’s as yet unclear what Stretch’s offering is beyond a free checking account, but it’s likely the fintech will try to address some of the other systemic financial barriers inmates face.