Financial Coaching Helps Latino Consumers Get on the Road to Recovery

CFPB_LogoLast week, the Consumer Financial Protection Bureau (CFPB) announced a new project that will provide financial coaching for veterans and economically vulnerable consumers. This initiative could not have come at a more opportune time for Latinos and other communities of color who are trying to regain a financial foothold after the devastating effects of the foreclosure crisis and the Great Recession.  In fact, research shows that Hispanic families lost 44 percent of their wealth between 2007 and 2010, and nearly half (43.9 percent) of all U.S. households do not have a basic personal safety net to prepare for emergencies.  Financial coaching—particularly the one-on-one models used by organizations like ours—is an important tool for helping low-income families make informed decisions and seize new opportunities. 

Through the work of NCLR Affiliate organizations that are currently involved in our financial coaching pilot program, “Effective Money Management,” we know how successful a one-on-one coaching model can be for Latino families.  In this model, trusted community-based organizations provide a combination of classroom financial education with individual financial analyses to meet clients where they are and help them reach their savings goals.  In guiding Latino clients toward the acquisition of assets like homeownership or U.S. citizenship, these NCLR Affiliates are helping families achieve a range of other financial benefits along the way, such as reducing debt, building or rebuilding credit, and developing long-term savings habits.  NCLR research on financial access and inclusion shows that many Latinos want and need this kind of tailored financial advice but lack access to it due to language or other barriers.

Jar of MoneyThis newest CFPB initiative begins in 2014 and seeks to provide financial coaching services to transitioning veterans and economically vulnerable consumers to help them proactively take control of their finances.  Specifically for economically vulnerable consumers, CFPB will fund 20 local organizations to integrate financial coaches into broader service delivery, such as job training or housing counseling.  Similar to the one-on-one housing counseling model that NCLR has operated for over a decade, the CFPB program seeks to integrate financial capability into other teachable moments, such as buying a home or pursuing U.S. citizenship.

In order to help Latino families get on the road to recovery, programs like this CFPB initiative are critical.  It will greatly enhance the delivery of tailored financial coaching—integrated holistically alongside other services—that is already working in the Latino community.

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