New York City’s Office of Financial Empowerment (OFE) recently celebrated its third anniversary by releasing a report detailing their progress in bolstering the economic security of low-income New Yorkers. OFE was the first initiative created by the Center for Economic Opportunity. The Center was created by Mayor Bloomberg and a diverse commission of local leaders to implement a variety of new and innovative strategies for reducing poverty in New York City.
OFE’s mission is “to educate, empower, and protect New Yorkers with low-incomes to help them make the best use of their financial resources to move forward economically.” To this end OFE has employed four major strategies over the past three years which are detailed below:
Strategy 1: Increase access to high-quality, low-cost financial education and counseling
Strategy 2: Improve access to income-boosting tax credits
Strategy 3: Connect low-income households to safe and affordable banking and asset-
building products and services
Strategy 4: Enforce and improve consumer protections to enhance financial stability
New America has had the pleasure of working with OFE on their third strategy and in particular on their $aveNYC Account program. $aveNYC offers low-income New Yorkers a 50 percent match on any savings they place in a $aveNYC Account at tax time. Participants can access the funds at anytime, but to qualify for the match they cannot withdraw the funds for a year. Having savings and assets available can help families weather an unexpected loss of income or a large expense. It is also typically a safer alternative to most forms of short-term credit available to low-income families such as payday loans and credit cards which can trap them in a cycle of debt.
New America has a federal policy proposal that is very similar to the $aveNYC Account program called the Saver’s Bonus proposal. You can read more about the Saver’s Bonus here
and you can read the full OFE progress report here