Why a Statewide Strategy on Financial Empowerment is Needed

A new brief provides an overview of the financial security of Colorado’s citizens and the racial and geographic disparities that exist in the relevant indicators. It then explains a statewide office of financial empowerment’s function in building a strategy to develop targeted, community-based solutions to address the disparities. Denver’s Office of Financial Empowerment is provided as a successful example of the kind of office needed.   

The motivation behind the brief is to show the conditions that allow for predatory financial products to exist are still present and propose the Statewide Office of Financial Empowerment as the solution.

Colorado has made significant strides in protecting consumers and working to develop safe, secure, and accessible financial products. Over the past decade, the legislature has addressed some of the worst debt collection practices and limited more outrageous forms of lending product. In 2018, voters passed a 36 percent cap on payday interest charges.

When you examine statewide averages, Colorado appears to be doing well compared to the nation. But underneath this ranking and the progress seen over the past decades are growing racial and geographic inequities that threaten communities throughout Colorado. In ProsperityNow’s rankings, Colorado ranks 37th in the nation in racial disparities in financial security. A lack of access to safe and affordable banking and credit leaves many Coloradans vulnerable to predatory lenders. Nearly 22 percent of Coloradans — and 49 percent of households of color — are either unbanked or underbanked, meaning these families pay high fees and risk deeper debt to meet their basic financial needs. To guard against the expansion of predatory financial services in Colorado, we need a statewide office of financial empowerment which will proactively ensure the financial security of vulnerable Coloradans. Housed in the attorney general’s office, the office will be charged with expanding community-driven access to safe and affordable banking and credit, and financial coaching. This approach will ensure Coloradans have access to affordable financial services and products that meet their everyday needs and bolster their economic security.

Learn more about what an office of financial empowerment would look like and do in Colorado by reading our latest brief.