Seattle to open no-cost financial centers to help low-income people manage their money
Low-income people who want to fix bad credit or manage debt may have hit the jackpot: Seattle will open seven free financial empowerment centers next year to help people achieve greater financial stability.
Beginning in February 2014, the city of Seattle, nonprofits, social service agencies and a local community college will come together to launch financial counseling centers for low-income people.
“We need them because many low-income people have difficulty navigating the mainstream financial world,” said Jerry DeGrieck, senior policy advisor to Mayor Mike McGinn.
The centers will serve 1,500 low-income people a year. Financial counseling is provided at no cost.
There will be one full-time site at Neighborhood House in Rainier Vista, which will be open in the evenings and on weekends. The six other locations will be in north and south Seattle, the Central District and downtown, with varying hours.
The centers will be funded for three years through $2.63 million in grants from local nonprofit and municipal agencies.
DeGrieck said counselors will help people who have little or no experience with banking institutions find options to avoid predatory pay-day lenders. The centers will provide information to improve credit ratings, which he said play an important role in economic independence.
“If people don’t have good credit,” he said, “you may not get a job or a place to live.”
Clients will also learn how to manage debt and create a savings plan to prepare for future needs, he said.
The centers will offer an Express Credit Union community teller, free tax preparation from United Way and enrollment in Medicaid or Washington’s Affordable Care Act’s health exchange, along with assistance for people considering home ownership or starting a small business.
The program’s organizers anticipate clients will be people at or below 250 percent of federal poverty guidelines, or who earn $4,900 per month for a family of four. Immigrants, refugees, racial and ethnic minorities, and residents in subsidized or public housing are expected to be clients as well. Client outcomes will be tracked.
All centers will be inside of or closely linked to social service agencies. For example, one satellite office will be in Solid Ground Sandpoint, which provides transitional housing. People facing domestic violence will also be able to visit financial centers in safe locations.
Staff at more than 50 organizations, such as El Centro de la Raza, Wellspring Family Services and Centerstone, can refer clients to financial centers. Referrals can also come from the Seattle Municipal Court, which can identify people with unpaid parking tickets, or from local utilities, which can identify people who have unpaid bills.
The centers will be staffed by five full-time counselors, each of whom will have passed a four-credit course called “Consumer and Personal Finance,” offered at North Seattle Community College (NSCC).
The NSCC course is adapted from a class at City University in New York, which was used to train counselors for financial employment centers in New York. The centers opened there in 2008, and low-income people in New York can visit one of 23 centers.
DeGrieck said the success of the New York centers spurred him to consider opening similar offices in Seattle.
The local centers will receive financial support from The Paul G. Allen Foundation, which will supply $600,000 a year for three years; the City of Seattle, which will provide $138,000 a year for three years; Neighborhood House, which will provide $119,000 a year for three years; and United Way, which will provide $20,000 a year for three years.
DeGrieck said that as the opening date for the centers nears, a website will go live and staff at social agencies will know where to refer clients. Those announcements will usher in an opportunity for 1,500 low-income people a year to establish a more solid financial footing.
“I think that we need this here,” he said.
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