WASHINGTON — The Consumer Financial Protection Bureau has partnered with New York City Mayor Michael Bloomberg to take a local financial protection program nationwide.
The joint initiative, announced Tuesday, is meant to amplify Mayor Bloomberg's existing program to help financially educate and protect consumers, called the Cities for Financial Empowerment. Other cities can receive disbursements from the funding arm of the program to launch a pilot that includes financial counseling centers for low-income individuals.
"We need all hands on deck to protect consumers in the financial marketplace," said CFPB Director Richard Cordray in a joint announcement. "Cities have a special role to play, and New York City has embraced that responsibility."
The Cities for Financial Empowerment Coalition was co-founded by Bloomberg and a group of municipal governments to help financially stabilize low income families.
The mayor launched the Office of Financial Empowerment within the Department of Consumer Affairs in 2006 to financially educate and protect low-income individuals. Since 2008, when the pilot program started receiving private funding through the mayor's office, it has grown to nearly 30 centers where financial counselors have helped more than 20,000 New Yorkers reduce their debt by almost $10 million.
"Through its network of Financial Empowerment Centers, our Department of Consumer Affairs has given tens of thousands of low-income New Yorkers professional, free, and confidential advice about managing their financial lives and helped protect consumers from those who try to take advantage of them when their financial lives are in crisis," said Mayor Bloomberg in the announcement. "This combination of financial counseling, education, and fair enforcement is more important now than ever, in New York and across the nation."
The Financial Empowerment Center initiative is already being replicated in five cities including Denver, Nashville and Philadelphia. All of the cities received a total of $16.2 million in funding by Bloomberg Philanthropies through the Cities for Financial Empowerment Fund for a three-year pilot.
But the partnership with the CFPB should help grow the program.
New York is the third city that the CFPB has formed some kind of partnership with since last year.
In December, the CFPB launched its first major municipal partnership with the City of Chicago to report financial activity to the CFPB about local companies. It more recently created a local 4311 hotline for residents in Newark, N.J. to call about a financial question or complaint.
"Today's announcement will build on this work and on the work happening here in New York and throughout the country," said Cordray in prepared remarks. "We need to do this work together, recognizing that when consumers and honest businesses prosper, communities can flourish and so will our economy."