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DENVER - CoPIRG applauds the members of the Colorado House State, Civic, Military, and Veterans Affairs Committee for approving SB21-148, sponsored by Majority Leader Esgar and Representative Tipper. The bill will create a state Office of Financial Empowerment.
Representatives Kennedy, Woodrow, Amabile, Bacon, Bernett, Duran, and Alex Valdez voted yes. The bill has already cleared the Senate and will head to the House Appropriations Committee next.
CoPIRG Executive Director Danny Katz released the following statement:
“Many Coloradans are struggling to make ends meet. This was the case even before the pandemic. For the past two years, I’ve been working with a number of other consumer advocates and community groups to identify ways we can expand some of the good financial empowerment programs we see in cities like Denver and Pueblo across the state.
The most effective municipal financial empowerment strategies combine the following characteristics:
- Expanding access to banking products with lower fees and easier account access - Check cashing fees, high-cost loans, and delays in getting access to your money add up quickly. Access to safe and affordable banking has been shown to have a significant impact on financial stability and avoiding predatory traps, and is a critical first step towards building wealth. Cities have been able to expand options for their residents by working with the public and private sector to identify needs and elevate options.
- Expanding free one-on-one financial coaching centered around individual consumers - Financial coaching is a model for financial education that goes far beyond financial literacy training. Financial coaching is a free, one-on-one approach that starts with the participant’s goals. The coach then works with people for a series of sessions to help assess their situation, opportunities for change and to help them develop the skills and habits needed to reach their goals. Cities have helped develop and expand these programs, sometimes housed at a municipal office or embedded in a city-run program or by collaborating with the public or private sector.
- Strong consumer protections - At the same time that people are working to increase their financial management skills and avoid costly fees and high interest rates, they are often getting taken advantage of by unscrupulous actors. In response, many cities have programs to help consumers know their rights and create opportunities for them to share their complaints with enforcement agencies. One resource is a navigator program - a one-stop shop for residents to call in to identify problems and get connected to resources that already exist like housing or food assistance.
Each one of these strategies can be helpful but taken together, they can truly expand financial empowerment and consumer protection in a community.
Here in Colorado, the City and County of Denver’s Office of Financial Empowerment and Protection is a great model. Just in 2020, the office helped nearly 1,000 people reduce debt by $1.5 million, increase savings by $227,000, increase average credit score by 43, and assist approximately 60 families to purchase homes. They also helped nearly 3,000 people avoid nearly $1 million in tax prep fees.
With two full time staff, a state Office of Financial Empowerment (OFE) will be able to impact Coloradans across the state by filling some key gaps. The OFE will be able to identify safer banking products that have been developed in some parts of Colorado and help expand access to them to other parts of the state. The OFE can help develop tools that cities can use to roll out navigator programs or develop training and curriculums to make financial empowerment services more easily embedded into city programs and services. The OFE can identify additional resources to pull down for local financial empowerment programs, whether from the federal government or philanthropic entities. The OFE can also help identify trends that can be acted on by regulatory authorities.
At a time when cities have been innovating and developing good strategies to expand financial empowerment services and consumer protection programs at the local level that can help bring more financial stability to residents, it is important for the state to have the capacity to augment and leverage what’s happening so more communities can benefit from what’s working.
I applaud Representatives Kennedy, Woodrow, Amabile, Bacon, Bernett, Duran, and Alex Valdez for approving this program and keeping it moving forward.”
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