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Financial Empowerment Centers
September 23, 2010
Presenter:Cathie Mahon, Deputy Commissioner for Financial Empowerment
Office of Financial Empowerment (OFE)Office of Financial Empowerment (OFE)
To educate, empower, and protect New Yorkers with low incomes.
• Launched by Mayor Bloomberg in December 2006 as the first program under the Center for Economic Opportunity.
• First local government initiative in the nation focused exclusively on anti-poverty and financial empowerment efforts for those with low incomes.
EducateEducate● Increase access and strengthen quality of financial education services● Coordinate education and large-scale public awareness campaigns
EmpowerEmpower● Research “supply and demand” of safe and affordable financial products and services● Partner with financial institutions to develop and implement innovative asset-building products
ProtectProtect● Protect workers with low incomes from unfair and predatory practices through targeted advocacy and enforcement
OFE’s Strategic PrioritiesOFE’s Strategic Priorities
• 825,000 NYC adults with no bank account- Nearly half (48%) of unbanked households in New York
City are in one of 10 neighborhoods; 79% are in one of 20 neighborhoods
• $4,000 or more in credit card debt held by 59% of households in low income NYC communities
- In the top 10 unbanked neighborhoods, over 70% of credit card holders are using more than 30% of their available credit, which has a negative impact on their credit score.
• 48% of NYC households have $0 in discretionary income
Citywide Financial Services StudyCitywide Financial Services Study
Financial Empowerment Center ModelFinancial Empowerment Center Model
Selection of non-profit organizations with expertise in financial education and ties to the community
Co-location with multi-service, multi-purpose organizations and sites providing comprehensive approach to those in need
Multiple “mobile” locations throughout City
Receives rollover calls from 311 operators as well as referrals from community partners
Tracking 40 client milestones across 5 financial counseling service areas
Delivery ModelDelivery Model
• The City’s infrastructure provides DCA and OFE with numerous “touch-points” for reaching individuals.
• Linkages to strategic moments like getting employment, receiving emergency assistance and receiving services around homeownership or foreclosure prevention counseling.
• Current partnerships with:
NeighborWorks America, the Center for New York City Neighborhoods, Department of Homeless Services, Human Resources Administration, Small Business Services, Department for Youth and Community Development, the New York City Housing Authority, the Department of Corrections and the Department of Probations.
Financial Empowerment Center LocationsFinancial Empowerment Center Locations
Over 18 Locations in 5 Boroughs
Client ProfileClient ProfileGender
Female 61%
Male 39%
Race
African-American/Black 47%
Latino/a 36%
Other 16%
Family Composition
Married/Common Law 26%
Divorced/Separated/Widowed 13%
Single 61%
Living Arrangements
Rent 63%
Own 10%
Staying with Family/Friends 15%
Shelter/Homeless 4%
Demographics
• Average age of clients is 41• The majority of clients are
women• Nearly half of clients are
African-American/Black• A majority of clients rent
(63%) although the percentage that is staying with family or friends has been steadily increasing.
Income Distribution of FEC Clients
23%
7%
71%
<$20,000
$20,000-$39,999
$40,000 or more
Income and EmploymentIncome and Employment
Employment Status of FEC Clients
5%
35%
17%
6%
37%
Full-time
Unemployed
Part-time
Disabled
Retired
Average Income: $16,153
Median Income: $13,008
Successes to DateSuccesses to Date
• 7,098 Clients Served
• 12,009 Counseling Sessions
• 4,705 Credit reports reviewed
• 3,123 Budgets created
• $2,261,760 In debt reduced
• $220,380 In savings
*As of August 31, 2010
Citywide, 94% of all clients have achieved at least one financial milestone.
Outcomes: Reduce DebtOutcomes: Reduce Debt
• 57% of clients are in the debt service plan
Average Debt: $38,314
Average Non-Mortgage Debt: $25,695
Median Debt: $10,000
• Over 200 clients have significantly reduced their debt• Average debt reduction: $8,125• Average # of sessions: 4.6
Over $2,200,000 in debt reduced!
Average Debt Reduced by Time in Program
$6,721$2,897
$18,053
$2,308$0
$4,000
$8,000
$12,000
$16,000
$20,000
< 1 month N=54
1 - 2 months N=71
3 - 4 months N=35
5+ months N=75
Outcomes: Establish/Improve CreditOutcomes: Establish/Improve Credit
• 63% of clients are working on establishing or improving their credit
Average credit score at intake: 593
• 82% have reviewed their credit report and/or credit score
Positive Change in Credit Score No Change in Credit Score
• Avg # of Sessions: 4.55 • Avg # of Sessions: 1.75
• Score Increase: Avg: 41 Median: 31 • Avg Score Increase: N/A
• Avg Debt: $18,425 • Avg Debt: $28,066
Outcomes: Increase SavingsOutcomes: Increase Savings
• Only 21% of clients report having any savings at time of intake
• Median savings: $1,132
• 18% have included a savings plan in their budget
205 clients are saving money regularly
Total value of increased savings: $220,000
Average Dollars Saved by Time in Program
$1,805
$866
$879
$533
$0
$400
$800
$1,200
$1,600
$2,000
< 1 month N=58
1 - 2 monthsN=72
3-4 months N=35
5+ months N=46
Outcomes: BankingOutcomes: Banking
• 28% of clients are unbanked at intake
• Overall, 20% of clients have a banking service plan
• 181 clients have opened either a checking or savings account
Opened a Bank
Account3%
Have a Bank Account
72%
Unbanked28%
• 75% of clients completed an initial budget
• Over 200 clients report living by their budget
Outcomes: Budgeting*Outcomes: Budgeting*
* As of 6/1/10, this outcome has been refined to “increased income to expenses ratio”
Clients working on budgeting
12%
6%
6%
75%
Completed estimatedbudget
Completed realisticbudget
Revised budget
Living by budget
Current Evaluation EffortsCurrent Evaluation Efforts
• Data Sharing with City Agencies
• Credit Score Project
• Anticipated Quasi-experimental Study
42 Broadway, New York, NY 10004www.nyc.gov/consumers