A new program from the Consumer Financial Protection Bureau (CFPB) aims to help veterans and other economically vulnerable folks reach their financial goals through personalized coaching services and education.
The Financial Coaching Initiative was created to help serve the nearly 50 million Americans living below the federal poverty line, the 68 million people who are financially underserved, and the approximately 250,000 military service members who are transitioning back to civilian life from active duty each year.
Sixty certified financial coaches will be placed at organizations across the United States, including nonprofit centers and Department of Labor American Job Centers. Locations were selected by the CFPB and the Department of Labor and also provide things like job training, education, social services, and housing services.
“Having a trusted, well-informed financial coach can increase your odds of financial success. Our project aims to provide financial coaching services at critical points in consumers’ lives, especially as they transition from military service or from being unemployed,” said Richard Cordray, director of the CFPB.
Military service members at risk
When stepping down from active duty and reentering civilian life, members of the armed services often face a number of financial challenges. There is a program offered by the Department of Defense—the Transitional Assistance Program, or TAP—but service members often need help beyond what TAP offers. Things like money management, making a budget, and fine-tuning the financial plan they made with TAP are all issues that can arise, and that the new CFPB program will address.
Coaches will be certified by the Association for Financial Counseling and Planning Education, and will assist veterans in successfully transitioning to a financially stable post-service life. CFPB coaches were hired with an eye toward experience working with the populations they will be targeting, and they are fully trained in financial coaching methods that have been proven to be effective.
Besides military personnel, CFPB coaches will also serve anyone who is struggling with unemployment, poverty, income instability, or other financial challenges.
CFPB: working for consumers
The CFPB was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) and began operations in July 2011. Their sole focus is to protect consumers in the financial space by regulating and supervising financial practices and enforcing consumer protections.
Since its inception, the CFPB has established a database for consumer complaints about credit card issuers, taken action against predatory lending companies, and compensated victims of bad financial practices with funds from the Civil Penalty Fund. This fund is comprised of money from companies and individuals who have violated the law and were charged a penalty fee.
The Financial Coaching Initiative is funded by the Civil Penalty Fund and expects to service tens of thousands of consumers over the next three years. More information is available here.