The financial inclusion stories presented this week were contributed by the Cities for Financial Inclusion (CFE) Fund in the framework of the call for short stories on local public-private partnership initiatives for financial inclusion directed at disadvantaged groups.
This article is the second in the series of 4 blogs on financial inclusion in the month of April 2014.
In January 2013, the CFE Fund, with the support of Bloomberg Philanthropies, awarded grants to five cities to replicate New York City's successful Financial Empowerment Centers. Denver, CO; Lansing, MI; Nashville, TN; Philadelphia, PA; and San Antonio, TX were selected to receive Financial Empowerment Center grants through a competitive process in which nearly 50 cities applied. Since the Centers opened their doors in early March 2013, professional counselors have already helped clients reduce their debt by a total of more than $3.5 million and increase their savings by more than half a million dollars.
These impressive aggregate accomplishments are made up of thousands of individual stories, like a woman named Rosa in Nashville. Rosa came to the Financial Empowerment Center facing unemployment and a debt level that caused her such "incredible pressure" that she frequently would awaken in the middle of the night, Rosa met with a Financial Empowerment Center counselor, Ashley Warbington. "I felt like I was drowning in debt. Before coming [to a Financial Empowerment Center], I felt alone," she recalls. Working with her counselor, Rosa reduced her debt by nearly $29,000, increased her savings from zero to $4,000, and opened a safe, affordable bank account. Through referrals to partner agencies, Rosa also secured a part-time job and moved into senior housing. Rosa is continuing to meet with her counselor and make progress toward prolonged financial stability.
A 50-year-old male client came to the Lansing Financial Empowerment Center seeking help after being paroled after 30 years of incarceration. At the time, he was being housed by the Michigan Department of Corrections’ housing program. He arrived to his first session professionally dressed and serious about working on his financial life. He was working sporadically doing landscaping work, but his felony record and technology barriers were employment challenges. His initial financial goals were simply to be able to provide for himself, and to make and manage a budget. He was given a community resource book and a list of felon-friendly employers that he could apply to. By his second visit, he had found part-time employment in fast food. He began working with the Financial Empowerment Center Program Manager to learn about banking basics, in addition to his counseling. By his third visit, he had obtained a second part-time job and opened a savings account. Within seven months, he had opened a checking account with direct deposit and a debit card, and he was able to use his savings to move out of parole housing and into an apartment. He is now excited about his financial future and a huge advocate for the program.
A practicing doctor came to the San Antonio Financial Empowerment Center facing suspension of her medical license due to non-payment of student loans. The participant was extremely overwhelmed when she first arrived and could hardly speak without tearing up. The Financial Counselor immediately began sorting through the paperwork of the various student loans. The first step the counselor followed was to help the client consolidate all the loans. Then working side-by-side the participant she prepared documentation for the participant to take to her State Medical Board Hearing. The day of the hearing the counselor received an unexpected call from the State Board’s Attorney who wanted additional information on the process the counselor was following. The Counselor assured the Attorney and the Board that the client had taken all proper steps and was simply waiting on the final step to complete the consolidation process. This participant now has the federal loans consolidated and remains a practicing medical doctor at a local hospital. The counselor and client continue to work on overall budgeting and arranging payment plans for some of the private student loans.
About The CFE Fund
The CFE Fund supports municipal efforts to improve the financial stability of households by leveraging opportunities unique to local government. By translating cutting edge experience with large scale programs, research, and policy in cities of all sizes, the CFE Fund assists mayors and other local leaders to identify, develop, fund, implement, and research pilots and programs that help families build assets and make the most of their financial resources. For more information, please visit www.cfefund.org or email us at firstname.lastname@example.org.
You can read the first blog of the series titled "Financial Education, Savings and Bancarization in Colombia - The Experience of IED-VITAL" here