Financial Counseling & Access for the Financially Vulnerable
With support from Treasury, Prosperity Now, the Center for Financial Security at the University of Wisconsin-Madison (CFS) and the New York City Department of Consumer Affairs Office of Financial Empowerment (OFE) developed a pilot program that paired access to a basic checking account with an average of one to two hours of financial counseling for a population of adults who were transitioning off of public benefits in New York City. All 1,034 study participants were offered safe, affordable bank accounts with direct deposit, and half were also offered free one-on-one financial counseling with trained providers through the City’s Financial Empowerment Centers.
The pilot allowed researchers to examine the impact of the financial counseling on participants’ financial capability, including credit history, financial behavior, and attitudes. Overall, the research found that participants who received the one-on-one counseling were more likely to stay current on debt payments at the six and 12-month follow-ups. Moreover, the results demonstrated that integrating access to accounts into the transitional workforce program dramatically increased the banked status of the population. Over the course of the study, the percentage of participants who reported being banked moved from one-third at baseline to almost 60 percent at six months, and more than half still reported being banked at 12 months.
The PDF linked here is for the AFCO Adult Pilot full report. To view the Research Brief, click here.