The Financial Counseling Industry: Past, Present, and Policy Recommendations

Written By: David A. Lander

Financial counseling plays an important role for low and moderate income Americans and deserves more attention from leaders in the field. As financial counseling has evolved, the providers have been challenged to find a model that is both borrower-centered and sustainable. This paper provides a diagnosis of the failures and challenges in the financial counseling field, as well as a discussion of steps through which the providers could optimally serve families in need. These steps include: 1) Enhanced funding of the industry as a result of a recognition by financial stakeholders that it would be beneficial for them if the counseling industry was markedly improved; 2) Stronger training for counselors; 3) Implementation of enhanced measurement tools so that both funders and consumer borrowers could choose their providers from an informed position; and 4) Assertion of leadership by consumer advocates and the Consumer Financial Products Bureau in improving this industry.