The greatest asset that any organization has is its people. As the longest-serving national nonprofit financial counseling organization, the National Foundation for Credit Counseling (NFCC), formed in 1951, believes that certification, training, and on-going professional development are essential components of high-quality service delivery. Counselors working with consumers dealing with financial distress must employ a comprehensive approach and expert knowledge, including an understanding of basic financial management, regulatory/creditor requirements, and the impacts of short-term and long-term decisions. Equally important is for counselors to stay current on newly available information and regulations relevant to financial education. The NFCC incorporates a strict certification process, ongoing professional development practices, and third-party quality assurance oversight in order to ensure “gold standard” financial counseling services and a more knowledgeable consumer.

 

So why is such a rigorous certification program necessary? By the early 1970’s, the credit card industry had exploded. NFCC counselors working with consumers across the country were reporting an average of eight credit cards per client/household. Based upon growing concerns of consumers dealing with the inability to meet their credit card debt obligations, NFCC recognized the underlying issue at hand. Consumers not only lacked knowledge specific to credit card lending concerns, but there was a general lack of overall personal financial awareness across millions of American households. With the option to use credit cards to “buy now and pay later” being both appealing and convenient, consumers began to discontinue the practices of maintaining a household budget and saving for most of their purchases. Without the structure of a strong budget and payment plan, this often resulted in the inability to pay, especially when multiple cards were being used and large balances were being incurred.

 

In response to these rapidly growing and disconcerting trends in consumer financial behaviors, in 1975, the NFCC implemented a rigorous and mandatory certification requirement for all counselors, focused on budgeting and credit card debt issues. Consumers were clearly lacking basic financial education, especially regarding credit cards, and NFCC recognized that proper training and certification for counselors was necessary to assure proper guidance was provided to member agency clients. Most consumers were struggling with credit card limits being maxed out, increasing interest payments, and over the limit charges. They were also struggling to meet other debt obligations, including mortgage/rent, car payments, and medical payments.  Counselors across the country provided feedback that in several cases overwhelmed and confused consumers were being subjected to “bad actors.”

 

Taking into account feedback from counselor field experience and responding to the overall changing economic environment and the pressing issues of the time (from reacting to the housing crisis or increasing issue of astronomical student debt), the NFCC continues to refine and expand its certification program. Not only is staying current on evolving consumer financial needs important, but it is equally important that all consumers and partners continue to receive meaningful financial recommendations from reputable counselors that are properly trained, tested, and monitored.  The basic mandatory certification program is the validation of becoming an NFCC Certified Consumer Credit Counselor. It covers budgeting, credit, collections and debt management, consumer rights and responsibilities, and bankruptcy. Additionally, counselors can be certified on housing-related topics including the basics of housing counseling matters, rental housing counseling, pre-purchase counseling, counseling clients with mortgage delinquency default, and counseling for reverse mortgages. And now, with student loan debt exceeding credit card debt, NFCC has implemented rigorous certification that is specific to helping student loan borrower issues.

 

Financial challenges that consumers face change and evolve with the state of the economy. As we move forward, we look towards vulnerable segments where strong financial education needs will likely arise, such as Retirement-At-Risk, Women/”Breadwinner Moms,” and the Hispanic/Latino sector. It is NFCC’s goal is to make sure certification is appropriate for helping all consumers and being committed to implementing ongoing changes as necessary to meet those needs.

 

The NFCC requires member agencies to obtain and maintain accreditation through the Council on Accreditation (COA), an independent third-party not-for-profit accrediting organization that currently accredits more than 2,200 social services organizations, ensuring compliance with national industry standards and best practices. NFCC member agencies undergo on-going audits focused on eight targeted areas: mission and purpose, quality assurance, governance and administration, human resources, service environment, financial management, professional practices, and service delivery.  Once accredited, agencies must adhere to several requirements specific to credit counseling and debt management. Member agencies must be re-accredited every four years, a process that then allows for analyzing organizational strengths and opportunities and helps establish a framework to measure continuous quality improvement.

 

Member agencies must also comply with 18 internal NFCC Member Quality Standards. These address in great detail what is expected from member agencies with respect to areas such as nonprofit status and disclosures, access and availability, fiscal integrity and governance, technology, reporting and data security to name a few. This combination of the NFCC certification process and third-party oversight measures ensures that NFCC counselors deliver the highest possible quality of service.

 

The NFCC partnered with the Ohio State University beginning in September 2013 to independently perform a detailed analysis of consumers participating in the Sharpen Your Financial Program™, examining their financial behaviors and perceptions of financial institutions, and evaluating the long-term impact of the program services on client credit report attributes. Results show persistently significant and positive outcomes for Sharpen clients, resulting in more financially knowledgeable and capable consumers. Sharpen 2.0, the next generation, launched in January 2016, included e-coaching techniques for counselors and their clients.

 

The focus on counselor certification and the other mandatory requirements for all of our agencies sets NFCC apart as the “gold standard” for financial education and counseling.  We remain committed to making sure that we continue to be diligent and attentive to ongoing changes in the economy and the impact that those changes have on consumers. In turn, we will continue to be a trusted advisor for all consumers across the country.