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
Evidence and impacts
- Increase utilization of safe and affordable banking
- Increase credit scores
- Reduced debt
- Increase savings
Best practices in 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.