Consumer Action works to close the racial gap

The global pandemic exposed harsh realities for communities of color and other underrepresented consumers. Most did not have buffers of emergency savings to weather the financial storm that resulted from the crisis, leaving people who were already financially vulnerable exposed to additional potential financial hardships, such as food insecurity, utility shutoffs, eviction and foreclosure, and lack of access to the digital economy and online schooling. As pandemic moratoriums expire and student loan payments resume, Consumer Action is focused on giving consumers tools and resources to help them better manage their finances and reduce their vulnerability to financial shocks.

Over five to seven months, Consumer Action will work with community partners at six sites. Clients of these partner organizations who save $300 will receive a reward to add to their savings. The sites will provide financial coaching or counseling, help clients to develop a spending plan, and assist them in developing a plan to reduce debt.

FinTech tools will be distributed based on the individual needs of the consumers who are participating. Financial coaches/counselors and clients use the FinTech tools together, and coaches/counselors provide instruction and support for their clients throughout. CBO staff and clients also have access to Consumer Action’s library of FinTech resources, designed to introduce consumers to the world of FinTech apps and prepare them to choose and use FinTech tools wisely.

Consumer Action’s network partners will measure participating consumers’ financial health using the Financial Health Network’s Financial Score® Toolkit Survey. We will work with Attune, a developer of tools that enable businesses and organizations to gather and analyze automated financial health data, to enhance our data measurement work and expand the dataset of demographic questions. (The Financial Health Network is Attune’s parent organization.) One thing we hope to learn more about is how gender and disability impact finances.

Communities of color are struggling through the financial fallout of the pandemic more than their white counterparts. By scaling our financial capability and FinTech distribution programs to serve more underrepresented consumers, Consumer Action can leverage technology to fight the persistent inequities that make it more difficult for communities of color achieve financial health.

By Audrey Perrott