Intergenerational Wealth Transfer through FEC Counseling: A Multi-City Legacy Planning Pilot

The lack of intergenerational wealth transfer is a driving force preventing residents with low incomes from building wealth. Additionally, in many localities, because of both historic and current systemic racism and other barriers, Black residents and other residents of color experience more financial instability than White residents: as just one example, Black households have an average of one-fifth of the assets of White households. In response to this critical need, and with funding and partnership support from Bloomberg Philanthropies’ Greenwood Initiative, the CFE Fund and four local governments partnered on a novel effort to build Black people’s ability to transfer wealth to future generations by integrating estate planning, or “legacy planning,” into existing FEC counseling services.

In this brief, the CFE Fund provides an overview of the findings from the pilot study showing the positive impact of integrating legacy planning into FEC financial counseling. The CFE Fund’s Legacy Planning pilot demonstrated that FECs can play a unique role in helping clients, including Black clients, engage in legacy planning – ensuring that clients can achieve their longer-term financial goals and have an opportunity to transfer wealth across generations. By adding legacy planning services to FEC financial counseling, FECs can play an important role in supporting racial wealth equity.

Boosting Sustainable Homeownership in Detroit: Adding Financial Counseling to Property Tax Relief Programs

Since it launched in 2020, the City of Detroit’s Financial Empowerment Center (FEC), as part of the CFE Fund’s national FEC Public initiative, has had a special focus on assisting homeowners  at risk of property tax foreclosure. Working with the Wayne County Treasurer’s Office (WCTO) and the Wayne Metropolitan Community Action Agency (Wayne Metro), the City’s FEC joined a property tax relief ecosystem that is complex and constantly evolving, especially in response to the COVID-19 pandemic. Its ability to adapt to changing systems while remaining focused on client services enabled the FEC to help 440 homeowners reduce their overall debt by over $2.6 million to date.

In partnership with the City of Detroit, and with generous support from the Wells Fargo Foundation, the CFE Fund has engaged in a study to unpack the benefits of the relationship between Detroit’s property tax relief programs and FEC financial counseling. The study, whose findings will be released in Summer 2023, will combine original qualitative research with analysis of administrative data to explore sustainable homeownership outcomes experienced by clients participating in FEC counseling, the factors that influence those outcomes, and other questions to inform future programming and the broader field.

This brief outlines the challenge of property tax foreclosure in Detroit, the opportunity to connect residents in danger of foreclosure with FEC financial counseling, and key considerations for study design.

CFE Fund Comment Letter on Community Reinvestment Act Reform

The CFE Fund recently submitted a comment letter to the Federal Reserve Board, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) on their proposal to amend the regulations implementing the Community Reinvestment Act (CRA).

Citing experiences from the Bank On movement, as well as the FEC Public initiative, the CFE Fund supported the proposal for a new Retail Services and Products Test that would evaluate a bank’s branch availability, delivery systems, and the responsiveness of their products to the needs of low- and moderate-income communities; the CFE Fund also supported the highlighting of the Bank On National Account Standards as an example of  a responsive deposit product. The CFE Fund suggested that the new Retail Services and Products Test 1) evaluates all large banks for the responsiveness of their deposit products; 2) enables “intermediate” sized banks to elect the Retail Services and Product Test; and 3) looks to the Federal Reserve Bank of St. Louis’ Bank On National Data Hub as an example of key metrics that examiners might use to assess financial institution account engagement.

Finally, the CFE Fund supported the agencies’ proposal to create a separate definition for activities that help individuals and families make informed decisions about managing income, savings, credit, and expenses that is distinct from other community development services, and suggested highlighting activities that produce measurable impacts such as banking access, credit score improvement, debt reduction, and savings increases.

The Citi Foundation and CFE Fund Launch Ninth Year of Summer Jobs Connect

This press release announces an additional $3.5 million in support from the Citi Foundation to provide more than 145,000 low-income youth with summer jobs and access to financial education as part of Summer Jobs Connect in 2022; the Summer Jobs Connect initiative is also supported by The Skillman Foundation and the PNC Foundation. Since launching in 2014, the Citi Foundation has invested over $40 million in this initiative, which has provided 16,500 young people with summer jobs and over 800,000 low-income youth with access to financial education and safe and affordable financial services. 25 Summer Jobs Connect city partners have built these financial empowerment strategies into the infrastructure of their Summer Youth Employment Programs. The CFE Fund also launched a national social media campaign, highlighting youth and partner voices on the impact of Summer Jobs Connect, and a new SJC website.

Three Cities to Kickstart Financial Empowerment, Racial Wealth Equity Efforts Through CityStart

In this May 2022 press release, the CFE Fund announced that three new cities have been chosen to join the next CityStart cohort, with a new focus on racial wealth equity. The CityStart initiative helps local leaders develop and implement proven strategies to help local families and communities become more financially stable. Bloomberg Philanthropies’ Greenwood Initiative, whose mission is to accelerate the pace of Black wealth accumulation in the U.S., will advise the CFE Fund on the design and execution of the latest iteration of the CityStart program with a specific lens on racial wealth equity.

The CFE Fund will partner with the cities of Cincinnati, OH; Mobile, AL; and South Bend, IN to help them address the financial empowerment needs of residents and the opportunities to meet those needs, prioritizing the financial stability needs of Black residents. Each of the three cities selected will also receive a $75,000 planning grant, drawn from a previous $19 million investment from Bloomberg Philanthropies.

The Supervitamin Quarterly Newsletter, Issue 25

This issue, Issue 25, provides updates on the CFE Fund’s and partner cities’ financial empowerment efforts, including an announcement that the Bank On movement has certified more than 200 bank and credit union accounts, with partner financial institutions comprising 56% of the U.S. deposit marketshare. Additionally, the issue describes the launch of a new pilot, Small Business Boost, to bring FEC financial counseling to small business owners and entrepreneurs; shares updates from the Financial Navigators initiative; and details a new expansion of the CityStart initiative to incorporate a racial equity lens. Additionally, this issue features a guest column from ChexSystems President Ron Whyte, highlighting how the ChexSystems Bank On bundle works to reduce the traditional barriers of negative banking history for under- and un-banked people. 

CFE Fund Announces the Launch of Small Business Boost Initiative

In this March 2022 press release, the CFE Fund announced the selection of five local governments to offer small business owners and entrepreneurs one-on-one Financial Empowerment Center (FEC) financial counseling. Akron, OH; Lansing, MI; Pittsburgh, PA; Polk County, IA; and Rochester, NY will connect their Financial Empowerment Center initiatives, which offer professional financial counseling as a free public service, to local business support services. This new initiative called Small Business Boost, supported generously by Principal® Foundation, will help local entrepreneurs and small business owners improve their personal finances, better positioning them to access capital and achieve their business goals.

CFE Fund Announces New $19M Commitment from Bloomberg Philanthropies

In this November 2021 press release, the CFE Fund announced its latest partnership with Bloomberg Philanthropies that will greatly expand local government-led financial stability efforts across the country over the next three years. With nearly $19 million in new support, the CFE Fund will replicate its proven Financial Empowerment Center (FEC) model – which helps low- and middle-income residents decrease debt and increase savings – under its nationwide FEC Public platform, resulting in as many as 100 cities and counties total looking to offer FEC financial counseling services. Additionally, the CFE Fund will establish a new network of 10 “Financial Empowerment Cities” that will institutionalize government efforts by supporting new financial empowerment offices and cohorts of leaders. The CFE Fund also will help to catalyze new commitments from as many as 30 local governments, partnering with Black-majority localities and Bloomberg Philanthropies’ Greenwood Initiative to create community-informed financial empowerment strategic blueprints through its CityStart initiative, and continuing the Financial Navigators emergency response initiative. Finally, support from Bloomberg Philanthropies will also enable the CFE Fund to pilot a new financial counseling integration in five cities to test FEC eviction prevention strategies in response to COVID-19 housing instability, and field a multi-city evaluation of FEC impact in three to five partner cities.

The Supervitamin Quarterly Newsletter, Issue 24

This issue, Issue 24, provides updates on the CFE Fund’s and partner cities’ financial empowerment efforts, including an announcement of a new partnership with Bloomberg Philanthropies to help grow the municipal financial empowerment field. 

The CFE Fund announced a $19 million investment from Bloomberg Philanthropies to: expand FEC financial counseling through the launch of FEC Academy; support the creation of a new pilot to embed FEC financial counseling into eviction prevention services; build out the Financial Navigators initiative; and invest in a racial-equity focused CityStart initiative. Additionally, this issue includes updates on the 2021 Bank On National Conference which took place in mid-November, with nearly 500 partners in attendance from across the country. This issue also features a guest column from Detroit Mayor Mike Duggan, highlighting the City’s Summer Jobs Connect initiative work providing summer jobs and financial education for Detroit youth.

 

 

The Supervitamin Quarterly Newsletter, Issue 23

This issue, Issue 23, provides updates on the CFE Fund’s and partner cities’ financial empowerment efforts, including those related to COVID-19 recovery. 

In advance of the newly expanded federal Child Tax Credit monthly payments, the CFE Fund and Bank On coalitions are highlighting the availability of safe and affordable Bank On certified accounts; the CFE Fund recently announced that there are over 100 accounts certified as meeting the Bank On National Account Standards. Additionally, the Summer Jobs Connect initiative has launched its eighth summer, and the CFE Fund recently selected a new cohort of Financial Empowerment Center partners.  This issue also features a guest column from Robin McKinney and Sara Johnsonfrom CASH Campaign of Maryland, highlighting their work with the Maryland Department of Labor to offer Bank On certified accounts for residents receiving unemployment payments.