Senate Commerce Committee Statement to Senate, No. 1196 — State of New Jersey (February 13, 2020)

Summary

A Senate Commerce Committee statement to the Senate on Senate Bill No. 1196, State of New Jersey, dated February 13, 2020, reporting the bill favorably. The bill establishes in the Department of Community Affairs a three year Financial Empowerment Pilot Program, with Camden, Newark and Paterson participating through municipal financial empowerment centers run by a non-profit provider. The centers are to offer financial literacy programs and personal financial coaching, and the program must track results on bank accounts, credit scores, non-mortgage debt and savings. The bill directs that monies the State receives from the settlement of the Federal Trade Commission complaint against Equifax, Inc., after the Attorney General's costs, go to the Department of Community Affairs for the program.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
1196

STATE
OF NEW JERSEY

DATED: FEBRUARY
13, 2020

The
Senate Commerce Committee reports favorably Senate Bill No. 1196.

This
bill establishes in the Department of Community Affairs a three year Financial
Empowerment Pilot Program. The purpose of the pilot program is to address
financial literacy and empowerment issues for economically vulnerable
individuals in the State through municipal financial empowerment centers. The
bill provides that the municipalities of Camden, Newark, and Paterson are to
participate in the pilot program with the department.

The
bill requires the pilot program, in consultation with the participating municipality,
to contract with a non-profit provider to establish a financial empowerment
center in each of the participating municipalities in a location that is easily
accessible to the residents of that municipality. The financial empowerment
centers are to facilitate appropriate forums, programs, or initiatives designed
to educate the public regarding financial literacy and empowerment and provide
personal financial coaching to economically vulnerable individuals.

The
bill requires the pilot program to establish metrics and standards to track
counseling efforts and results for economically vulnerable individuals, and
provide methods for implementing those standards at the financial empowerment
centers, in the following areas:

(1) the
opening or transitioning to a safe and affordable bank account;

(2) the
establishment of a credit score, or the increase in an existing credit score;

(3) the
decrease of non-mortgage debt; and

(4) the
increase in the rate of savings.

The
program is required to provide the centers with support services, including
materials for publication and dissemination to the public on financial literacy
and empowerment and to coordinate the activities of the program with other
entities that focus on financial literacy and empowerment, including other
State agencies.

Under
the bill, pilot program is required to submit a report to the commissioner no
later than two months after the conclusion of the pilot program. The report
must include, at a minimum, information on the counseling efforts and results
established and tracked pursuant to the bill for each financial empowerment
center.

The
bill requires the commissioner to submit a report to the Governor and to the
Legislature on the implementation and effectiveness of the pilot program. The
report must include the commissioner’s recommendation on the advisability of
the pilot program’s continuation and expansion to additional municipalities in
the State.

The
bill provides that all monies received by the State from the settlement of the
complaint of the Federal Trade Commission against Equifax, Inc., after
accounting for any costs incurred by the Attorney General in participating in
the complaint, are to be transferred to the Department of Community Affairs
for the purposes of effectuating the provisions of the bill. The moneys may
also be expended for appropriate and reasonable administrative expenses
incurred in the administration of the pilot program by the department.

The
bill takes effect immediately and expires upon submission of the final report
required to be prepared under the bill.

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