“Economic mobility is the basis of the American Dream.”
— Kathleen Long, Paterson business administrator
Even before the pandemic, many Paterson residents were struggling financially. The current crisis has only exacerbated the situation, but help is on the way.
My administration has been working on establishing a Financial Empowerment Center (FEC) for nearly two years. The objective of this initiative is to provide residents with free one-on-one financial counseling, and thankfully, our plan received unanimous approval from the City Council.
The FEC concept looks to foster financial stability to households by working within local government infrastructure to implement innovative programs and policies for residents. Furthermore, it is a public-private partnership that will help residents put their monetary affairs in order.
The FEC also aims to help residents reduce their debt, repair their credit scores and open bank accounts. By the end of this year, our goal is to give financial counseling to about 100 Paterson residents per month. The services would be provided through the United Way of Passaic County, with sessions taking place virtually and eventually in person at the Center City Mall in downtown Paterson.
Participants on average would get two or three counseling sessions. The goal would be for clients to increase their credit scores by 35 points, increase their savings by 2% of their annual income and reduce their non-mortgage debt by 10%.
The counseling will lead to more residents improving their lives in tangible ways — like a family of five currently living in a two-bedroom apartment, working hard to save money each month and wanting direction to buy a home. Others, like the young man who learned a trade as a mechanic, may want to discuss starting a business. Another example is the single mother with a daughter at Passaic County Community College, who wants to figure out a way to help enroll in a four-year college after completing her associate’s degree.
The $288,000 program would be paid for through a grant from a New York-based nonprofit group — the Cities for Financial Empowerment Fund — as well as by private donations made through the Community Foundation of New Jersey. We have reached out to a number of local banks, and they will be making contributions as well.
The FEC will feature professionally trained counselors, who will serve as knowledgeable guides covering the topics of banking, credit, debt relief and building up savings. They will help residents navigate the complexities of the contemporary fiscal landscape.
A little over 30 other cities around the country have launched a similar program, and we are proud that Paterson is a part of that select few. The Biden administration should be encouraged by our efforts to address inequity in our community. In addition to assisting participating Paterson residents, our objective is to inspire other municipalities to use this program to help those who are experiencing economic hardship.
Empowerment is at the heart of this initiative, as residents will be able to focus on what is most important to them and their families; it’s not a cookie cutter model that may not apply to everyone.
The effects of COVID-19 have been crippling, but we believe that the FEC will help our residents get back on their feet financially.
Andre Sayegh is mayor of Paterson.