By Sabina Mollot
In 2007, when low-income New Yorkers began turning to sub-prime lenders and check-cashing services as well as other high-risk practices due to a lack of traditional available bank services, a local nonprofit organization responded by launching a program aimed at getting those people out of the financial holes they inevitably ended up in.
The program, called Financial Coaching Corps (FCC), was launched by Community Service Society of New York, an organization that’s headquartered at 105 East 22nd Street near Park Avenue South. Community Service Society (CSS), for its endeavors aimed at fighting poverty, uses a team of volunteers who are 55 years old or older.
Its volunteer recruitment program is called RSVP (Retired and Senior Volunteer Program) and those volunteers, following a rigorous training program, become financial coaches who then offer free assistance to clients who have credit or debt issues.
Reyes Irizarry, project director of Financial Coaching Corps of Community Service Society of New York, recently spoke with Town & Village about the program and how it helps New Yorkers in financial crisis situations.
“We recruit seniors 55 and up,” said Irizarry, “who go through an extensive training program and become coaches, usually around credit and debt. That gives them the tools to help resolve issues of budgeting and banking. It’s a 30-hour program. For the volunteers it’s probably one of the more extensive programs. The preparation is pretty demanding, but the experience is rewarding because it’s very impactful. Surveys shows positive results in terms of basic financial literacy.”
At this time, FCC has about 30 volunteers who work with partnering community organizations by having coaches placed at those organizations’ offices throughout the city. They’re not walk-in-services, though. Clients should always call for an appointment. One location is Science, Industry and Business Library on East 34th Street. A new one recently opened at Nazareth Residence on East 2nd Street, which is a homeless outreach and prevention organization, and there are a total of 25 sites throughout the city.
Clients come from all over the city and are low as well as middle-income people, “but,” noted Irizarry, “The bulk are low-income. They’re people who are unemployed, or who may be disabled and retired or on public assistance. Most of them come to us in crisis. They may be getting harassed by credit collectors. What we do is have them articulate what the issue is so we can tell them what their rights are, what actions they can take. We help them build skills on how to use credit wisely. Our motto is ‘building the path to economic security.’ It’s client directed; we don’t have a script.”
While volunteers are 55 or older, there are no age requirements for services. These days, there are more young clients, like people in their 20s who find themselves buried in student loans.
“We have a big student loan issue that we’ve developed a program for,” said Irizarry. “It’s a very complicated issue.”
With any type of debt, coaches will analyze the loan to see what the options are for repayment. Typically, when a client comes in with a bad credit report, a coach will pull public credit reports and check to see if corrections need to be made to them.
“Sometimes they didn’t know they were sued,” Irizarry said of clients. “We tell them the consequences and what they need to do to address it. If there are errors, it may be due to identity theft. We can dispute entries on a credit card report. We send them in so that erroneous information can be removed. There’s also statutes of limitations, things that shouldn’t be on your credit report after seven years.”
This is a service that can be especially helpful to those seeking work since many employers will check a potential employee’s credit background.
Landlords also sometimes weed out would-be tenants for having bad credit.
“When you work with low-wage earners, these are the biggest challenges,” said Irizarry.
Sometimes, coaches can help get payments lowered to make them more manageable and they can also get debt collectors to stop calling clients, thanks to the Fair Debt Collection Act.
“Often the tactics they use are frankly unlawful,” said Irizarry.
How much debt clients have naturally varies. But, he noted, “Whether you have a $1,000 debt or $10,000 it has to be addressed. Our goal is to help them move forward.”
The clients with the biggest debts are those with students loans ($20,000-$25,000 typically). And unlike other types of debt, “student loans cannot go away” via bankruptcy, said Irizarry.
“It’s legal loansharking. Young people are saddled with loans and they don’t have a lot of options. I wouldn’t say it’s impossible but it is extremely challenging. You can’t even refinance a student loan.”
Owed child support is another common problem as is clients getting sued and having their accounts frozen.
Other problems include clients who, in an effort, to pay credit card debt, are “denying themselves enough nutrition or are on the verge of being evicted.”
But, Irizarry said there is hope, with coaches providing links to information clients are usually unaware of.
He gave an example of one extreme recent case in which a client was living in her car with her unemployed adult daughter, but was still paying off her credit cards. Irizarry noted that this client has since moved into an apartment, and her daughter is now employed part time at a bakery. “So they have more money coming in.”
A couple of the coaches are success stories themselves, people who found themselves overwhelmed with debt but eventually dug themselves out. But most are retirees and remain with a program for over a year, and also do other volunteer work. Irizarry himself began as a volunteer for FCC. He started after retiring eight years ago from Department of Education where he’d worked as a superintendent. He got involved with CSS after his wife started as a volunteer for another one of its programs, The ACES Project (Advocacy, Counseling & Entitlement Services), which offers benefits counseling.
As for FCC, in 2014, it was utilized by 750 clients and was recognized by the Office of Financial Empowerment as one of 20 programs providing financial literacy to low-income earners. “We’re very proud of that,” said Irizarry. “It’s grown in level of expertise and in terms of the quality of our services.”
Anyone seeking an appointment with a coach should call (212) 614-5419. Anyone considering becoming a coach can also call that number for more information; FCC is in the midst of recruiting a dozen new coaches.
Around for 173 years, CSS was formed to fight poverty in the city. At the time, this meant fighting for pure milk laws and in the 1880s, getting involved in voter registration.