The NFCC Sharpen Your Financial Focus Initiative Impact ...

The NFCC Sharpen Your Financial Focus Initiative

Impact Evaluation

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FINAL REPORT

Prepared by Dr. Stephanie Moulton and Stephen Roll

John Glenn College of Public Affairs,

The Ohio State University

April 12, 2016

Acknowledgements

The National Foundation for Credit Counseling (NFCC) would like to acknowledge the following

individuals and organizations for the important roles each group assumed in the development,

implementation and evaluation of the Sharpen Your Financial Focus (Sharpen) program:

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Over 62,000 clients who participated in the initiative which began in September 2013;

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The NFCC Board of Trustees, whose thoughtful leadership and creative ideas led to the initial

financial stabilization concept and $13 million in funding;

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The NFCC member agencies across the United States that delivered the Three-Step Process, including

the MyMoneyCheckUp? self-assessment, a customized one-on-one financial review and targeted

financial education;

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The NFCC staff members who created the overall initiative, working closely with many different

stakeholders and the NFCC governing bodies;

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Sharpen Alliance Partner Experian? for its generous donation of thousands of free, one-year

subscriptions to TM, which later converted to membership in Experian

Credit TrackerSM;

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The following partner organizations, media personalities and others that have a real commitment

to financial stability. This group of supporters, referred to collectively as the Friends of the Sharpen

Alliance, is instrumental in building awareness and publicity by supporting the initiative:

AllClear ID

American Savings Education Council (ASEC)

BAI

Clark Howard

Employee Benefit Research Institute (EBRI)

Family, Career and Community Leaders of America (FCCLA)

FraudAvengers (The Foundation for Payments Fraud Abatement & Activism [FPF2A])

Hope For The Warriors

Insured Retirement Institute (IRI)

Jump$tart Coalition for Personal Financial Literacy

Military Family Advisory Network (MFAN)

Mission Asset Fund

Society for Financial Education and Professional Development

Ways to Work

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The Ohio State University researchers Dr. Stephanie Moulton and Doctoral Candidate Stephen Roll for

conducting the Sharpen evaluation and for their tireless research guidance and assistance; and

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Most importantly, the NFCC wishes to express our appreciation to the following companies, which are

members of the Sharpen Alliance. Their generous financial support made the Sharpen efforts possible

and helped thousands of Americans improve their financial well-being.

SHARPEN YOUR FINANCIAL FOCUS RESEARCH TEAM

Stephanie Moulton, Ph.D.

Associate Professor, John Glenn College of Public Affairs

The Ohio State University

Dr. Moulton specializes in housing policies, consumer financial decision-making

and program evaluations. Dr. Moulton is also a research affiliate with the

University of Wisconsin¡¯s Center for Financial Security. Her research has been

funded by the U.S. Department of Housing and Urban Development,

the MacArthur Foundation and the U.S. Social Security Administration. Prior

to her academic career, Dr. Moulton worked in the nonprofit sector, designing and managing asset

building, homeownership and community development programs at the local and state levels.

Dr. Moulton received her Ph.D. in Public Affairs from the School of Public and Environmental Affairs

at Indiana University.

Stephen Roll

Doctoral Candidate, John Glenn College of Public Affairs

The Ohio State University

Stephen¡¯s current research focuses largely on consumer financial behaviors.

Prior to pursuing his doctorate, he received his B.A. in Economics and English

Literature from Indiana University and worked for several years as an analyst and

consultant for The Nielsen Company and Procter & Gamble.

Contents

Executive Summary .................................................................................................................................... 3

I.

Credit Counseling Background ......................................................................................................... 17

II.

What We Know About Credit Counseling Initiatives ....................................................................... 18

A. The Credit Counseling Research Literature ........................................................................ 18

B. Evidence from Related Programs ........................................................................................ 19

C. The Relationship between Counseling and Outcomes ........................................................ 21

III.

The Sharpen Your Financial Focus? (Sharpen) Program .................................................................. 24

IV.

Evaluation Overview......................................................................................................................... 25

V.

Sharpen Client Characteristics .......................................................................................................... 27

VI.

MyMoneyCheckUp? Results ............................................................................................................ 31

VII. Post-Counseling Survey Results ....................................................................................................... 37

VIII. Descriptive Credit Data Analysis ...................................................................................................... 41

A. Baseline Credit Characteristics ........................................................................................... 42

B. Credit Trends after Sharpen ................................................................................................ 42

IX.

Sharpen Your Financial Focus? Matching Analysis ......................................................................... 47

A. Introduction ......................................................................................................................... 47

B. Credit Evaluation Results.................................................................................................... 50

C. Subsample Analysis: Outcomes for Debt-Holding Clients ................................................. 55

D. Subgroup Analysis: Bottom 50th Credit Score Percentile ................................................... 58

E.

Subgroup Analysis: Clients in the Bottom 25th Credit Score Percentile ............................. 60

F.

Controlling for the Credit ¡°Shock¡± ..................................................................................... 62

G. Exploring the Dynamics of Consumer Debt ....................................................................... 64

H. Client Outcomes Based on DMP Status.............................................................................. 65

X.

I.

Alternative Model Specifications ........................................................................................ 67

J.

Matching Results Discussion .............................................................................................. 69

Conclusion and Future Directions ..................................................................................................... 74

Appendix A. The Three-Month Post Counseling Survey .......................................................................... 75

Appendix B. Sample Comparisons: MMCU? & Client Survey ................................................................ 77

Appendix C. Credit Evaluation Base Size Diagram .................................................................................. 79

Appendix D. Participation in Sharpen Deep Dive and Credit Outcomes .................................................. 80

Appendix E. Client Characteristics by Agency Evaluation Participation ................................................. 83

Appendix F. Comparing Matched and Unmatched Counseling Clients ................................................... 84

Appendix G. Regression Model and Methodological Notes ..................................................................... 86

Appendix H. Full Regression Output for Selected Models ....................................................................... 88

Appendix I. Summary Results for Debt and Credit Score Impacts.......................................................... 93

References

.............................................................................................................................................. 94

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