Financial Empowerment Centers
Local governments can invest in this strategy using State and Local Fiscal Recovery Funds (SLFRF) from the American Rescue Plan Act (ARPA).
- This strategy can help address educational disparities. The U.S. Department of Treasury has indicated that strategies that help achieve this outcome are eligible for the use of Fiscal Recovery Funds.
Investments in this strategy are SLFRF-eligible as long as they are made in qualified census tracts or are designed to assist populations or communities disproportionately impacted by COVID-19.
- Trained financial professionals that provide free consultations to individuals on financial issues and provide referrals to other social services and resources
- Intended to help individuals open or transition to a safe bank account, establish a credit score, decrease debt, and increase savings
- Often ensure that individuals receive public benefits and other resources
- Financial navigation services can be provided in-person or remotely
Strength of evidence
Evidence level: Promising (Third-highest tier)
Low- and moderate-income adults
Outcomes and impact
- Increase utilization of safe and affordable banking
- Increase credit scores
- Reduced debt
- Increase savings
Keys to successful implementation
- Note: This content is under review
- Rapport between participants and financial navigators drives good outcomes. Navigators should prioritize clients' goals, encourage clients to return for follow up sessions, and report on their progress.
- Collecting data on participants and tracking outcomes encourages cultures of continuous improvement.
- High-quality training for navigators and high expectations of professionalism help build trust among clients, partner organizations, and municipal leaders.