The city received $20,000 to implement a Financial Empowerment Center to provide one-on-one financial counseling to residents.
Cities for Financial Empowerment Fund which announced the grant funding on Wednesday will also provide the city with technical support to implement the program. Paterson is one of six cities throughout the U.S. to receive grant funding.
“We are thrilled to be chosen by the CFE Fund as one of the newest cities to implement this proven, data-driven financial program,” mayor Andre Sayegh said. “In Paterson, we believe in the power of local government to have a direct positive impact on residents’ lives. Meeting individuals where they are and empowering them financially – to reduce debt, save for college, own a home, start a business – will impact not only those individuals and families, but neighborhoods and communities.”
The small grant will open the pathway to a bigger award. The city has the potential to receive up to $250,000 over a two-year period if implementation of the Financial Empowerment Center is approved after the planning year.
Cities for Financial Empowerment Fund is backed by Bloomberg Philanthropies, Capital One, JPB Foundation, JPMorgan Chase, and Wells Fargo. Financial Empowerment Centers were first piloted in New York City under mayor Michael Bloomberg in 2018, assisting 98,000 people, helping them to reduce individual debt by $137 million and increasing their family savings by over $19 million.
A study conducted by the Cities for Financial Empowerment Fund shows the model works even when residents have very low incomes and other financial challenges.
“Financially strong residents mean a financially strong city,” Jonathan Mintz, president and CEO of the Cities for Financial Empowerment Fund, said. “Increasingly, leaders across the country are turning to professional, high-quality financial counseling as a critical tool to build residents’ financial stability. The CFE Fund is excited to partner with Mayor Sayegh to work towards providing Financial Empowerment Center counseling for all Paterson residents, helping them build stronger financial futures.”
The latest grant awards to Paterson, NJ; Gaithersburg, MD; Racine, WI; Richmond, VA; Tulsa, OK; and Washtenaw County, MI, brings the total number of local governments working to offer Financial Empowerment Center services to 32.
At each center, professional trained counselors help individuals and families with low and moderate incomes to better manage their finances by paying down debt, increasing savings, building good credit, and gaining access to banking products. There are also other services like housing and foreclosure prevention, workforce development, prisoner reentry, benefits access, and domestic violence services offered at these centers.