Fifteen percent of LA County residents live below the official poverty line, but more than three times as many, about 49 percent, are “liquid asset poor,” lacking sufficient savings to live above the poverty level for three months if they lose a job or suffer a financial emergency.

In a motion approved by the Board of Supervisors Tuesday, a Center for Financial Empowerment will be established this fall to help thousands of families reduce their debt and save money.

Supervisor Sheila Kuehl, co-author of the motion, noted that “The New America Foundation estimates that low to moderate income county residents fail to claim more than $370 million in Federal Earned Income Tax Credit funds each year. Twenty-eight percent of county households don’t have a bank account and often rely on check-cashing stores and payday lenders with high interest rates that drain low-income residents’ meager savings. The county needs to help low-income County residents build household wealth.”

Supervisor Hilda Solis added, “Our new Center for Financial Empowerment is about equity and the opportunity to create financial assets for our communities. Researchers estimate that the typical U.S.-born Mexican or African-American family holds just 1 percent of the wealth of a typical white family in Los Angeles. Without sufficient assets, our families are easily thrown off track by accidents, unexpected expenses, and the smallest mistakes. The Center for Financial Empowerment will be able to help tens of thousands of low-income LA households take a step up on the ladder of American economic mobility by helping them build household wealth and resilience.”

The Center for Financial Empowerment will initially coordinate and promote the many existing financial services already available for low-income residents such as financial literacy, free tax preparation, accessing appropriate benefits and helping consumers manage their debt.

The center will open in September and be housed at the Department of Consumer and Business Affairs. Its $570,000 first-year budget will be paid for through the DCBA budget along with a private foundation grant from Citi Community Development which leads Citi’s economic empowerment efforts for underserved individuals.

“Nearly half of all households in L.A. County are walking a financial tightrope each and every day – and in communities of color, the problem is even more severe,” said Bob Annibale, global director of Citi Community Development and Inclusive Finance. “We are pleased the Board of Supervisors approved the motion to establish this Center for Financial Empowerment, which will enable financially vulnerable Angelinos to get banked, build their credit, get free access to valuable tax credits like the EITC and achieve a more secure financial future for themselves and their families.”

This motion is the latest in a series of county efforts to build prosperity and economic security for all residents by raising the minimum wage and establishing programs to promote social enterprises, help small businesses thrive and prevent people from falling into homelessness when they encounter a short-term financial emergency.