by Megan Kursik, Coordinator, Michigan Communities for Financial Empowerment (MCFE), a program of CEDAM

As a volunteer income tax preparer serving in Lansing over the past three years, I’ve gotten up close and personal with the finances of Lansing residents, most living at or below the poverty level. Working with individuals to fill out city, state and federal tax forms and, most importantly, helping them claim state and federal tax credits, I’m often struck by my tax clients’ ability to creatively stretch their small incomes to make ends meet. What’s also striking to me, however, is that many of the tax clients I work with have a severe lack of access to financial information and mainstream financial products – information and services that many in the middle class take for granted.

Financial tips my parents taught me, like, for instance, to pay my credit cards on time, opt out of costly overdraft protections and have some liquid savings for emergencies, are pieces of knowledge vital to a person’s financial stability. But, often there is no formal delivery of this information to Americans, just the passing of information between friends and family. Further, higher levels of financial advice provided by trained professionals around topics like investing and retirement planning are available only to people who are able to pay for it. Financial products, even basic checking accounts, are designed to meet the needs of middle and high income consumers, with features like minimum balance requirements and hidden fees and charges that individuals with low to moderate incomes simply cannot afford.

The good news? Publicly announced just two days ago, Lansing residents will soon have access to free, one-on-one financial counseling, thanks to a national initiative supported by Bloomberg Philanthropies and the Living Cities’ Cities for Financial Empowerment (CFE) Fund. Set to open in March, the Lansing Financial Empowerment Center will help residents to reduce debt, build credit, increase savings, and access low-cost and second-chance financial products and services. Over the next three years, the Center is expected to reach 4,000 Lansing residents, helping them to gain financial knowledge and build financial security. The project involves a partnership of the City of Lansing, Capital Area Community Services, Lansing Community College, the Community Economic Development Association of Michigan (CEDAM) and numerous other Lansing-based organizations.

The Financial Empowerment Center model began in New York City as a project of the NYC Office of Financial Empowerment, which opened the first Financial Empowerment Centers in 2008. Since then, NYC’s Centers have built an evidence-base supporting the effectiveness of the model, helping more than 19,000 New Yorkers reduce their debt by more than $9 million and save more than $1 million. Centers seamlessly integrate one-on-one financial counseling with traditional forms of social services, to increase the effectiveness of these services. In Lansing, the Center will integrate counseling with emergency services, housing services, workforce development, asset building, Head Start and prisoner re-entry.

Additionally, through the Michigan Communities for Financial Empowerment (MCFE) network, the experiences and best practices that evolve from the Lansing Financial Empowerment Center project will be shared with other Michigan communities. MCFE is a program of CEDAM, generously supported by the C.S. Mott Foundation. Through MCFE, CEDAM contributed a high level of technical assistance to the Lansing project in both the proposal and implementation processes. Now, CEDAM will continue to support the Lansing project, but will also engage other Michigan communities to share national best practices and provide technical assistance for the development of similar projects that replicate the Financial Empowerment Center model. To learn more about MCFE, please visit mcfe.cedamichigan.org.

As we approach the March launch of the Lansing Financial Empowerment Center, I’m excited for what this project means for the hard-working residents in Lansing who will benefit from the free, one-on-one financial counseling provided by the Center. I’m also excited for the potential this project has to benefit residents in other Michigan communities, who can learn from Lansing’s experience to replicate the Financial Empowerment Center model.

Additional Resources:

Bloomberg Philanthropies: http://bloomberg.org/

Living Cities’ Cities for Financial Empowerment (CFE) Fund: http://www.cfefund.org/

Cities for Financial Empowerment Coalition: http://cfecoalition.org/