Bloomberg Philanthropies: National Three-Year Evaluation of Municipal Financial Counseling Model Shows Financial Counseling Works as Public Program
The Cities for Financial Empowerment Fund (CFE Fund) released today An Evaluation of Financial Empowerment Centers: Building People's Financial Stability As a Public Service, a three-year evaluation of the initiative's initial replication in 5 cities (Denver, CO; Lansing, MI; Nashville, TN; Philadelphia, PA and San Antonio, TX). Financial Empowerment Centers (FECs) offer professional, one-on-one financial counseling as a free public service. First piloted in New York City under Mayor Michael R. Bloomberg in 2008, the Centers have worked with almost 34,000 clients, helping them reduce individual debt by almost $40 million, and increasing their families' savings by close to $5 million. The evaluation shows that the model worked in a variety of city contexts, and that clients succeeded in reducing debt, increasing their savings, establishing and improving credit, and opening safe banking accounts, despite deep financial challenges. The CFE Fund also opened new funding opportunities for additional local governments looking to replicate local FEC programs.
At the Financial Empowerment Centers, professionally trained FEC counselors help consumers with low incomes manage their finances, pay down debt, increase savings, establish and build credit, and access safe and affordable mainstream banking products. At the core of the FEC model is the integration of counseling into other social services, including housing and foreclosure prevention, workforce development, prisoner reentry, benefits access, domestic violence services, and more.
"Mayors and other local leaders know well that individual and family financial stability is key to neighborhood and citywide stability. And like any other serious and complex need, when people are in financial trouble, they don't just need education, they need individual, professional help that delivers measurable outcomes," said Jonathan Mintz, President and CEO of the Cities for Financial Empowerment Fund. "This new evaluation of the FEC model demonstrates the impact and successes of this critical public service, detailing how it changed the social service landscape in our five partner cities. We thank these five city partners for being on the forefront of this innovative movement, as well as Bloomberg Philanthropies for their investment in this work and look forward to partnering with more local governments to continue replicating this important and successful public program."