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Financial Empowerment Centers September 23, 2010 Presenter:

Financial Empowerment Centers September 23, 2010 Presenter: Cathie Mahon, Deputy Commissioner for Financial Empowerment. Office of Financial Empowerment (OFE) To educate , empower , and protect New Yorkers with low incomes.

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Financial Empowerment Centers September 23, 2010 Presenter:

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  1. Financial Empowerment Centers September 23, 2010 Presenter: Cathie Mahon, Deputy Commissioner for Financial Empowerment

  2. 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.

  3. OFE’s Strategic Priorities • Educate • ●Increase access and strengthen quality of financial education services • ●Coordinate education and large-scale public awareness campaigns • Empower • ●Research “supply and demand” of safe and affordable financial • products and services • ●Partner with financial institutions to develop and implement • innovative asset-building products • Protect • ●Protect workers with low incomes from unfair and predatory • practices through targeted advocacy and enforcement

  4. Citywide Financial Services Study • 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

  5. Financial 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

  6. Delivery 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.

  7. Financial Empowerment Center Locations Over 18 Locations in 5 Boroughs

  8. Client Profile 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.

  9. Income and Employment Average Income: $16,153 Median Income: $13,008

  10. Successes 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.

  11. Outcomes: 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!

  12. Outcomes: 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

  13. Outcomes: 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

  14. Outcomes: 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

  15. Outcomes: Budgeting* • 75% of clients completed an initial budget • Over 200 clients report living by their budget * As of 6/1/10, this outcome has been refined to “increased income to expenses ratio”

  16. Current Evaluation Efforts • Data Sharing with City Agencies • Credit Score Project • Anticipated Quasi-experimental Study

  17. 42 Broadway, New York, NY 10004 www.nyc.gov/consumers

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