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The Office of Financial Empowerment

Alisa Roth Apr 18, 2008

The Office of Financial Empowerment

Alisa Roth Apr 18, 2008


Tess Vigeland: Last month, the Left Coast and Right Coast decided it was time to work together. New York and San Francisco announced a new coalition that they titled “Cities of Financial Empowerment.” Miami, San Antonio, Savannah and Seattle are also part of the effort.

It’s designed to help low and moderate income residents improve their financial health and security and as Alisa Roth tells us, it all comes out of a Big Apple initiative that started last year.

Alisa Roth: The Office of Financial Empowerment sounds like something out of a second-rate science fiction book. It’s actually a new part of New York City’s Department of Consumer Affairs.

Jonathan Mintz runs the agency. He thinks it’s nothing short of revolutionary.

Jonathan Mintz: For the first time, city government has taken in-house a mission that I think many people feel is reserved to the not-for-profit sector.

That is, to get financial education and information to low and middle-income residents. New York’s one-stop shop is the first of its kind in the country.

Some non-profits do financial education. Others focus on helping people get all the public benefits they can. Mintz wants to do it all — and then some.

Mintz: But how do you actually help people move ahead financially?

He thinks the city is uniquely positioned to do that.

Mintz: And so the experiment that we’re engaged in, which is really incredibly exciting, is when you put that mission inside of city government and you can pull levers from within, what can you accomplish?

Christine Chimelis is one example. She’s a single mother who was thrilled to learn she could get paid for doing things like taking her kids to the doctor for physicals or for meeting with their teachers.

Christine Chimelis: …because, of course, raising three kids, the money does come in handy and it was stuff I was already doing with my kids.

To get that money, she signed up for the office’s best known program, Opportunity NYC. It’s a cash incentives scheme which started last year. It pays low-income New Yorkers for doing ordinary things, such as getting a library card or finding a job.

The trick, Mintz explains, is to get people to…

Mintz: …build not only in a way that allows for their present to make sense — dealing with debt, dealing with their current crises of the day or of the week — but what’s also important is to help people begin to build toward a future.

Mintz admits these are the kinds of things non-profits have been trying for ages, but he says the city has the clout and the contacts with non-profits, think tanks and state and local agencies to really make a difference.

It’s also got leverage with the business community. Working with poor people is good PR for companies like banks and there’s always the possibility of more business for them down the line.

For example, when the city started Opportunity NYC, it convinced ten banks and credit unions to create a special bank account for participants.

San Francisco’s been watching New York’s new office closely. Jose Cisneros is treasurer of San Francisco and co-directs the new Cities for Financial Empowerment Coalition. He says a city has credibility with its residents, too. If a bank suggests opening an account, people might suspect its just looking to make a quick buck. Coming from the city, it’s less threatening.

Jose Cisneros: When they hear that message from me, the treasurer, the New York City Office of Financial Empowerment, neither of us are looking to get any business. We’re not going to gain or profit from them moving in from going from check cashing to a bank account at a bank or a credit union.

And he may just be right: more than half the New Yorkers who signed up for Opportunity NYC have opened new bank accounts.

For the moment, New York’s is still the only Office of Financial Empowerment, but other cities are moving in a similar directions.

In New York, I’m Alisa Roth for Marketplace Money.

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