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CFPB Bureau Launches Financial Coaching Initiative
Friday, May 22, 2015 6:25 AM

The Consumer Financial Protection Bureau has launched its Financial Coaching Initiative, targeting recently-transitioned veterans and economically vulnerable consumers to help them with their financial goals. The program places 60 certified financial coaches at organizations around the country to provide individualized educational services.

Millions of consumers are economically vulnerable, including the 49.1 million people living below the poverty line, and the more than 68 million who are financially underserved. These consumers are the most likely to lack access to traditional financial services, which may include products that are more appropriate to their needs and less costly.

Roughly 250,000 servicemembers leave active duty every year, and the financial transition into civilian life can be challenging. The Department of Defense offers a Transition Assistance Program (TAP), but many transitioning servicemembers lack experience in money management, and find after they leave the service that they may need help in reworking the financial plan they made while in TAP. At this point a trusted source of financial information and advice could make the difference in a successful transition to a financially stable post-military life.

The CFPB Financial Coaching Initiative helps both veterans who have recently transitioned from active-duty status as well as economically vulnerable consumers seeking other services from social services and other providers. The coaches hired for the program have experience working with the populations they will serve, are trained in financial coaching techniques, and will be accredited by the Association for Financial Counseling and Planning Education.

Sixty diverse partner organizations from around the country have been selected to host the professional financial coaches. The hosts were selected by the CFPB, in partnership with the Department of Labor, after a nationwide search. The sites include various nonprofits, as well as Department of Labor American Job Centers. They provide resources to help people find a job, identify training programs, and gain skills in growing industries. All of the nonprofit organizations selected to host financial coaches for economically vulnerable consumers also provide services that complement financial coaching, such as job training and education, social, and housing services.

When the CFPB takes enforcement action against a company or person for violating the law, it may impose a civil penalty. That money goes into the CFPB’s Civil Penalty Fund used to compensate victims harmed by those illegal practices. If the CFPB cannot locate victims or it is otherwise not practicable to pay them, it may use the money on consumer education and financial literacy programs. The Financial Coaching Initiative is the first program paid for by the CFPB’s Civil Penalty Fund. Over three years, it’s estimated that tens of thousands of consumers will be served.

Find more information here.