Office of Financial Empowerment

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CDFIs and the City of New York 2009 New York
Coalition Conference May 7, 2009 Caitlyn
Brazill Deputy Director for Research and Policy
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• Office of Financial Empowerment (OFE)
• To educate, empower, and protect
  New Yorkers with low incomes.
• Launched by Mayor Bloomberg in December 2006 as
  the first program under the Center for Economic
  Opportunity.
• First local government initiative in the nation
  focused exclusively on anti-poverty and financial
  empowerment efforts for those with low incomes.

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OFEs Strategic Priorities

• Educate
• ? Increase access and strengthen quality of
  financial education services
• ? Coordinate large-scale public awareness
  campaigns, including
  
• the annual Tax Credit Campaign
• Empower
• ? Research and develop safe and affordable
  banking and asset-building
• products, partnering with financial
  institutions
• ? Share promising practices and influence
  national policy with the
• Cities for Financial Empowerment (CFE) and
  other partners
• Protect
• ? Protect workers with low incomes from unfair
  and predatory practices
• through targeted advocacy and enforcement

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• aveNYC Account
• Pilot program offered matched savings
• at 12 VITA sites partnering with 5 CDFIs.
• Initial deposit is matched 50 after one year
  (maximum match up to 250)
• First Year More than 170 accounts opened
• Second Year More than 1,000 accounts were
  opened in only 8 weeks.
• Purpose Test a scalable, national model that to
  increase emergency savings among low income
  households

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• Even individuals with very low incomes can and
  will commit to saving if
  presented with a convenient, simple tax time
  vehicle.

• Participant average income 15,530
• 63 were working full time
• 73 have children

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? Match money offered through the aveNYC account
is a powerful motivator to save.
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• The aveNYC Account is already changing savings
  behavior. The
  aveNYC Account motivated even those with no
  track record of saving.

• 31 of participants were UNBANKED at program
  start
• 72 had less than 500 in savings when the
  program began
• 25 of respondents had no intention of saving a
  portion of their tax refund

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• The aveNYC Account is already changing savings
  behavior.

• Match money motivated majority to save for the
  full year
• 74 of 2009 SaveNYC participants kept their
  account for 1 year.
• 79 of those who received the match rolled over
  the account. Of those
• who rolled over 33 contributed again in
  2009.
• 57 of respondents who closed their account did
  so because of an
• emergency, childrens expenses, or job loss

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? aveNYC Account participants are saving for a
variety of non-frivolous short and long term
goals.
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Implications

• Tax time represents a unique opportunity to
  encourage low-income individuals to save.
• Financial incentives, combined with trustworthy
  and effective implementers, can convince even the
  very low income and unbanked to save (even in
  difficult economic times).
• Asset-building policy must incorporate the full
  gamut of savings needs, including for short-term
  emergency funds. Short term savings can help
  reorient people towards longer-term planning and
  financial management.

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42 Broadway, 8th Floor New York, NY
10004 www.nyc.gov/ofe