The Consumer Financial Protection Bureau (CFPB) is partnering with New York City in an effort to help municipalities across the United States beef up their ability to protect consumers. The bureau also reaffirmed the role of cities as key partners that inform the agency’s work.
The partnership, announced on April 2, involves the Cities for Financial Empowerment Coalition, a group of municipal governments dedicated to using municipal powers and opportunities to help their residents with low incomes achieve financial stability. The coalition — which includes New York City, San Francisco, Chicago, Hawai’i County, Los Angeles, Louisville, Miami, Newark, Providence, San Antonio, Savannah and Seattle — has been working to replicating New York’s Financial Empowerment Centers program. New York Mayor Michael Bloomberg said his city’s network of nearly 30 Financial Empowerment Centers has helped tens of thousands of low-income New Yorkers access professional, free and confidential advice about managing their financial lives and helped protect numerous at-risk consumers.
“This combination of financial counseling, education and fair enforcement is more important now than ever, in New York and across the nation,” Bloomberg said.
The Cities for Financial Empowerment Fund, the technical assistance and funding arm of the Cities for Financial Empowerment Coalition, will work with the CFPB to help other cities leverage their enforcement and public awareness abilities to protect and empower consumers in the financial services marketplace, as well as to serve as key partners to inform and enhance the work of the CFPB on the federal level, the partners said. The partnership will also leverage New York’s Department of Consumer Affairs, which enforces local consumer protection laws through licensing and other regulatory powers, and empowers consumers with low incomes through professional financial counseling, safe banking and asset building programming.
“We need all hands on deck to protect consumers in the financial marketplace. Cities have a special role to play, and New York City has embraced that responsibility,” said CFPB Director Richard Cordray. “Today's announcement will build on the work of both the CFPB and New York City in order to better protect consumers throughout the country.”
New York’s Financial Empowerment Centers have helped more than 20,000 New Yorkers reduce their debt by almost $10 million, the city said. Financial counselors help New Yorkers deal with debt collectors, understand their credit reports, create budgets, improve their credit scores, open bank accounts and start saving for emergencies and for the future. The Financial Empowerment Center initiative is also being replicated in five cities across the nation — Denver, Lansing, Mich., Nashville, Philadelphia and San Antonio — through a $16.2 million, three-year pilot funded by Bloomberg Philanthropies through the Cities for Financial Empowerment Fund.
The partnership is just the latest to involve the CFPB and a major city. The bureau and the City of Chicago announced an agreement to share information related to financial fraud late last year. In February, the CFPB said it would team up with Newark, N.J. to establish a consumer complaint hotline in that city.