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.

Program overview

  • 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

Promising
  • 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.