The National Federation of Community Development Credit Unions (Federation) and Equifax will jointly launch the West Side Financial Empowerment Center to expand financial inclusion in the West Side of Atlanta. Equifax is the lead sponsor of the West Side Financial Empowerment Center and has committed $450,000 in grant funding over the next three years to support the design and launch of the West Side Financial Empowerment Center.
The Federation and Equifax are committed to work over the next three years to complete the design and launch of the West Side Financial Empowerment Center and support its capacity building and community integration. The goal is to open the West Side Financial Empowerment Center doors in early 2017 with comprehensive financial education and counseling services. The Center aims to provide financial empowerment services to 600 low-income West Side residents by 2019 and to continue to build its programming reach over time.
The West Side Financial Empowerment Center will deliver financial education and counseling integrated with the responsible financial products necessary for residents to build a stronger future. The Center will offer the responsible CDCU financial services and products most needed in the neighborhood, including accessible checking and savings accounts and a suite of affordable credit products, such as payday alternative loans, auto loans, home loans, microenterprise loans. The Center aims to integrate its financial counseling and product offerings with nonprofit service providers and community institutions through referrals and local partnerships.
The West Side Financial Empowerment Center is part of the expansion of Pathways to Financial Empowerment, an initiative developed by the Federation and Neighborhood Trust Financial Partners with support from the MetLife Foundation. West Side financial counselors will receive training on the Pathways to Financial Empowerment counseling model and outcome-tracking platform. The Pathways model utilizes best practices drawn from behavioral science to support individuals to advance toward their financial goals, and the Pathways system will enable the Center to measure and demonstrate its impact on individuals financial capability and well-being over time. Building on its 2015 pilot with 5 credit unions, the Federation is expanding the Pathways model to 10 additional CDCUs in new geographies. The West Side Financial Empowerment will be the flagship location in this second phase of Pathways to Financial Empowerments national expansion which aims to scale up to serve 10,000 low-income people annually through credit unions around the US.
In the second half (June December) of 2016, the Federation and Equifax will continue to engage West Side residents and community stakeholders to finalize the Centers program design and product offerings and to ensure the Center is responsive to the West Sides particular financial capability needs. During this period, Equifax and the Federation will also work with local partners to identify the ideal site for the Financial Empowerment Center and raise additional resources to support the renovation and build out of the site. In 2016, the Federation and Equifax will also coordinate with the community development credit unions of Atlanta to detail the specifics of the roles, responsibilities, and the operational plans for the Center, which will be solidified in service agreements leading up to the opening of the center in early 2017.
Throughout 2017, the Federation and Equifax and lead implementation partners will implement a community outreach campaign to increase awareness of the center in the West Side community. Marketing and community linkages will be critical in this early phase to ensure that residents understand what the Center offers, the value of its services, and that the Center becomes integrated into the fabric of the community.
The West Side Centers service offerings and scale will ramp up over time as the program development is phased in and as awareness and demand for the Centers services increases. In fall 2017, the second phase of the Center, a CDCU Microbranch, will launch and begin provision of responsible financial services and products alongside the Centers financial education offerings. In 2018, the Center will be providing a comprehensive suite of financial empowerment services education, counseling, and banking and credit products on site. The Center aims to provide these in-depth services to 300 community residents each year and to serve 600 low-income residents by mid-year 2019.
Its estimated that a low-income, unbanked household spends 4-5% of their income on basic transactional services that higher income households access for free. To improve financial well-being and strengthen low-income households' ability to cope with volatility in income and expenses, households must have access to affordable financial services combined with guidance on how to take advantage of essential financial products and services. Recent research shows that banking access paired with financial education and counseling has a greater impact on financial capability and well-being than either intervention on its own.
Access to affordable financial services is a particularly pressing challenge in the City of Atlanta, where one in four residents are underbanked. The West Side is a community in Atlanta with extremely low access to mainstream financial institutions. Costly alternative providers and payday lenders thrive in the West Side, draining precious resources from the neighborhood. The West Side neighborhoods of Atlanta are predominantly African American and among the lowest income segments of the City with 44% of adults living below the poverty line. In the West Side, there is not only a tremendous need for responsible financial services, but also an opportunity through strong, local community development credit unions (CDCUs) and Equifaxs commitment to invest in long-term financial empowerment efforts in Atlanta, the home of its global headquarters.
The Federation and Equifax have been building relationships with local economic development leaders, and continue to seek funding partners to support the site and development costs of the Center in this initial phase, as well as long-term partners to support the Centers continued growth over time. The commitment-makers also seek media support both to increase awareness of our partnership nationally and to spread the word about the Center in Atlantas low-income communities when the Center opens later in 2016.
The West Side Financial Empowerment Center will be greatly strengthened by referral and service integration partnerships. The Center can offer financial empowerment integration services to local service providers, such as workforce development programs, social service agencies, housing developers, and other stakeholders serving Atlantas West Side. Financial capability has been shown to magnify the impact of other community services. The Federation and Equifax welcome connections with local providers seeking to bring financial counseling and services to the populations they serve.