Taking it to the bank
Nonprofit neighborhood centers to help low-income people take charge of their finances
Low-income people who want to reduce debt or improve their credit history can visit one of Seattle’s free financial empowerment centers.
On April 14, the city of Seattle, nonprofits and a local credit union teamed up to open seven free, multilingual centers offering one-on-one counseling to help clients work toward one of four goals: improve or establish credit history; decrease debt; open an affordable bank account; and increase savings.
“Being empowered about your finances is critical to having the tools to advance in Seattle — and, in general, the U.S.,” said Nathan Buck, program director for the nonprofit Neighborhood House, which oversees the centers.
The main center is located in Rainier Vista, 4431 Martin Luther King Jr. Way S., and is open Monday to Friday
9 a.m. to 5 p.m. Other centers, which are open varying days and hours, are located at Solid Ground in Wallingford, YWCA Opportunity Place in downtown and Wiley Center at Greenbridge.
There are no financial eligibility requirements to attend a center.
“Everyone is welcome — even Bill Gates,” Buck said. “But he would not be our target audience.”
The target audience is low-income people, particularly those who are “in crisis or are making a transition in their life from low-income to moderate-income,” Buck said.
When the program was created last year, program organizers said they anticipated clients would be people at or below 250 percent of federal poverty level guidelines, which is $4,900 a month for a family of four (“Seattle to open no-cost financial centers to help low-income people manage their money,” RC, Nov. 27, 2013).
The free centers are funded for three years through more than $2.6 million in grants from local nonprofit and municipal agencies.
During an early April briefing on the centers, Seattle City Councilmembers expressed support for the program’s goals. Buck told councilmembers that each year the centers would provide an estimated 3,200 sessions for up to 1,500 clients.
Councilmember Tom Rasmussen questioned whether the five financial counselors could handle a caseload of 300 clients each.
“I’m curious about the success of that [model],” Rasmussen said.
The centers’ organizers said they believed staff could manage the workload. One also said that in the future, the counselors may help sign up low-income people for the city’s underused utility discount program.
Recently, Mayor Ed Murray called for the utility discount program to be overhauled, as tens of thousands of eligible customers are not receiving the assistance they need to pay their utility bills (“Down the drain,” RC, March 26).
Even though the program officially opened in mid-April, Buck said the centers had a “soft” opening in February to work out any kinks.
In the first two months, Buck said counselors assisted 65 people, most of them at Rainier Vista. The hub site was chosen, he said, because Rainier Vista is in the 98108 ZIP code, which has one of the city’s highest rates of poverty. (U.S. Census data show that 13 percent of people in the ZIP code live in poverty.)
Data from the centers show that every client sought help with debt reduction and more than 90 percent of clients wanted to increase savings. Clients who want to open a bank account can sign up with Express Credit Union, which has a mission to provide affordable financial services to low- and moderate-income people. All clients were referred by social service agencies.
Many who sought to reduce debt, are burdened with medical or educational bills, Buck said.
“These are the realities for the majority of people in this city,” he said.
The centers are staffed by five full-time counselors and one manager, and each staff member has received a certificate from North Seattle Community College in a four-credit course in consumer and personal finance. Along with English, at least one staff member at each center also speaks Spanish, Amharic, Nepalese or Vietnamese.
Cultural awareness is an integral part of financial counseling, Buck said, because an immigrant may view the concept of credit differently than someone born in the U.S. For example, immigrant Muslims who practice sharia, an Arabic term often translated as “moral code,” are banned from taking out interest-bearing loans. In Western culture, the repayment of interest-bearing loans can help establish a positive credit history.
When clients first visit a center, they have a 30- to 60-minute informal conversation that involves a financial health assessment. Once the assessment is complete, Buck said an action plan is developed to achieve one of the four goals. Clients will come back for periodic check-ins, some of which may last no longer than five or 10 minutes.
The local centers will receive financial support from The Paul G. Allen Foundation, which will provide $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.
Buck said center organizers and supporters believe that everyone, regardless of annual income, has the capacity to learn to read a credit report or improve financial health.
“We just have to give them the resources and tools on how to do it,” he said.
Seattle is one of five U.S. cities with a program modeled on a program that began in New York City in 2008. Low-income New Yorkers can visit one of 23 centers there.
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