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CFED Board Member Bill Bynum Testifies on Capitol Hill

By Alexander Scarlis on 07/30/2014 @ 10:00 AM

Tags: Federal Policy, Assets & Opportunities Initiative

Bill Bynum--CFED board member, CEO of Hope Credit Union (“HOPE”), and Mississippi state lead for the Assets & Opportunity Network -- brought his wealth of asset-building experience and wisdom to a congressional Joint Economic Committee hearing today entitled, Increasing Economic Opportunity for African Americans: Local Initiatives that are Making a Difference.

“As our nation grows more diverse,” said Bynum in his opening statement, “it is increasingly clear that all of our interests, our common interests, are tied to the fact that we must equip these growing segments of the population with the capacity to prosper, support their families, and contribute to our nation’s economy.”

He described the challenges he faces tackling America’s “Persistent Poverty Counties”, those with poverty rates over 20% for 30 consecutive years. One in four of these counties is located in HOPE’s service area in the Mid-South. He also noted that people of color make up a disproportionate share of residents in those counties.

Bynum also described the “bank deserts” – zip codes with fewer than two bank branches – that are created when banks leave communities and alternative financial services fill the void.

“The Mid-South has the highest concentration of payday lenders in the country,” he explained. “Subprime lending is higher than it is anywhere else.

“The presence of a locally owned financial institution that fosters financial inclusion offers numerous channels to move the historically underserved ahead in today’s society.”

He cited inspiring examples from his organization’s work of bringing retail financial services, homeownership and capital to disproportionately African American under-banked and unbanked communities:

  • A single African American mother and gas station cashier in West Memphis, Arkansas used a HOPE loan to buy the uniforms for her state highway officer training.
  • A HOPE mortgage originator helped a married African American couple in Memphis, Tennessee rebuild their credit.
  • McMillan’s First Steps, African American-owned and the only child care center serving a high-poverty area in New Orleans, Louisiana, used a HOPE commercial loan to add classrooms, expand its playground and move its entrance off a busy street.

In his policy recommendations, Bynum highlighted the pending CFPB small-dollar loan regulations, saying they represent in the Mid-South “the single best opportunity to end the debt trap and to create a space for responsible products.”

When Senator Bob Casey (D-PA) asked Bynum what is the one strategy that Congress could adopt that would actually pass, he suggested increasing investments in the U.S. Treasury department’s Community Development Financial Institutions (CDFI) Fund and targeting those investments on persistently impoverished and underserved communities.

“The CDFI Fund…is relatively small,” replied Bynum, ”but the results have been staggering. It has been able to leverage capital from private investors into low-income distressed communities…and the results are targeted investments…that we all need (but) that low-income communities lack.”

Toward the end of the hearing, Bynum tied in a frequently discussed topic at the hearing – education – with the important role CDFIs like HOPE play in building a community’s assets. “Communities cannot generate the revenue to support schools if they don’t have business, if their economies are not vibrant,” explained Bynum, “and economies cannot be vibrant without strong financial institutions.”

Bynum said he hoped that he gave the Committee a sense of “what is possible when African Americans and other underserved populations have access to a financial institution that is committed to providing affordable and responsible structured services.”

You can read his written testimony here and watch the full hearing here.

Congratulations, Bill, on a splendid job representing your communities, your organization and our field!

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2014 Assets Learning Conference to Feature Capacity-Building Intensive Workshops

By Paul Day on 07/30/2014 @ 09:15 AM

Tags: ALC 2014

This year, one way we’re empowering attendees to dive deeper into asset-based strategies for financial empowerment is by offering a slate of extended three-hour workshops—called Capacity-Building Intensives—that allow more depth than a traditional breakout session would allow.

During the afternoon of Wednesday, September 17, attendees will be able to choose from the following Capacity-Building Intensives:

  • Children’s Savings Accounts (CSAs) Intensive. This session will focus on the nuts and bolts of designing and implementing a successful, scalable savings initiative for children. Topics include partnering with financial institutions, account structure, savings incentives and financial education.
  • Partnering with Native Asset-Building Organizations. This session is especially designed for non-Native organizations—nonprofits, financial institutions, philanthropic organizations and others—that desire to expand their service areas to include Native communities as part of their mission to serve underserved populations.
  • Assets & Opportunity Network Leadership Convening. Staff from the 73 Lead Organizations in the Assets & Opportunity Network are invited to join us for this special session, during which participants will learn from and share with others about challenges and opportunities facing their work.
  • Financial Coaching Intensive. Given the enormous number of financial coaches who have expressed interest in the ALC, attendees in this Intensive will learn about different coaching models, common issues with developing and implementing coaching programs, and view various coaching resources.

These offerings are in addition to the Capacity-Building Intensive for federal agency staff that will be held in the afternoon on Thursday, September 18. Click here to learn more that half-day session.

Want to learn more about the sessions being offered at #ALC2014? Visit the Conference website.

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Tax Policy Primer: It’s Not that Complicated

By Charles Tilley on 07/29/2014 @ 12:00 PM

Tags: EITC, Federal Policy, Local Policy

1040 Tax Form

Tax expenditures can be a forgotten piece of the puzzle when considering federal and state efforts to promote asset building and financial security. While not the most glamorous topic, properly targeted tax credits and deductions offer low- and moderate-income families a boost to their year-end bottom line. (As a quick reminder, tax credits reduce tax owed dollar-for-dollar, while tax deductions reduce the amount of income subject to tax.)

Tax Credits for Children

A variety of tax credits are designed specifically for working families with children. For instance, the Earned Income Tax Credit (EITC), Child Tax Credit (CTC), and Child and Dependent Care Tax Credit (CDCTC) all allow families to channel extra money towards necessities and long-term goals such as education and homeownership. The CTC is the most straightforward, offering a credit of $1,000 per child under the age of seventeen. EITC benefits are structured with various phase-in, plateau, and phase-out ranges based on income and number of children. Finally, the CDCTC reimburses a percentage of working families’ childcare expenses for children under the age of thirteen, also based on income.


There is one tax credit feature with tremendous repercussions for the credit’s true value to low- and moderate-income families: refundability. A refundable credit allows families to receive the difference between the value of the credit and their income tax liability in the form of a refund (when such a difference exists). For instance, if a family owes $500 in income tax and qualifies for a $1,500 credit, they will receive a $1,000 refund if the credit is refundable. If the credit is non-refundable, the family would simply owe no tax, and the full value of the credit would be lost.

The reason this is so crucial is that low-income families with no income tax liability do not benefit from a non-refundable credit. This distinction is pivotal because yearly taxes do not end after filing an income tax return. Other tax obligations such as payroll (FICA) tax, sales tax, property tax and the gasoline tax can recur year-round. At present, the EITC is refundable, as is the CTC through the Additional Child Tax Credit. The CDCTC, however, is non-refundable.

State Level Tax Credits

Where the landscape gets a little more nuanced, though, is when we consider state level tax credits. States can offer their own versions of these credits that “piggyback” on the federal level credit. Often, these are structured as a percentage of the federal credit. For instance, a state may offer an EITC at 20% of the federal credit—meaning a family receiving $1,000 in federal EITC relief would be eligible for an additional $200 from their home state.

Of course, this is a rather simplified picture. States must decide whether their credit should be refundable as well, even when the relevant federal credit is not refundable. For instance, many states operate refundable CDCTCs despite the federal credit’s lack of refundability. Also, states must decide whether to maintain federal eligibility rules or craft more expansive criteria to provide tax relief to a greater number of working families. This is not to mention the choice of indexing credits to inflation to ensure benefits do not erode over time.

All in all, there are a variety of factors to consider when evaluating tax policy, but this primer should offer a stepping stone to more in-depth analysis. For a closer examination of state tax credits, check out the Scorecard sections on the EITC and CTC and CDCTC.

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SSI Asset Limits: Reflections on ADA's 24th Birthday

By Alexander Scarlis on 07/28/2014 @ 03:15 PM

Tags: Federal Policy

George H.W. Bush signing the Americans With Disabilities Act (ADA)

Before President George H.W. Bush signed the American with Disabilities Act (ADA) into law 24 years (and two days) ago, you’re unlikely to have spotted wheelchair-accessible public transportation or commercial buildings. Ubiquitous accessible design regulations may be the ADA’s most visible success. Less obvious is the legal weaponry the U.S. Justice Department wields to shield people with disabilities from discrimination.

Unfortunately, these advances have yet to translate into meaningful change in the economic circumstances of most disabled Americans. According to the U.S. Department of Health and Human Services, “people with disabilities are more likely to be unemployed and to live in poverty than any other single demographic group in the United States today.” Despite medical and technological advances that facilitate the return to employment, as many as 70% of people with disabilities are unemployed. In 2003, almost 25% were in poverty, compared to less than nine percent of those without disabilities.

Possible explanations for these disparities include persistent employer bias and the inability of government programs targeting people with disabilities to encourage economic self-sufficiency. Many income-based programs discourage work and saving for emergencies and long-term investments like a house or an education. The Supplemental Security Income program (SSI), which offers cash assistance to elderly or disabled people with low incomes and few assets, is no exception. SSI’s asset limits of $2,000 per individual and $3,000 per couple have not increased since 1989. In fact, if Congress had indexed the asset limits to inflation from inception in 1974, the limits would be four times as high as they are now.

Asset limits plague several different social safety net programs but the effect is the same: those who need to save can’t. And without savings, income-disrupting events are likely to exacerbate the already fragile financial footing of low-income people. For example, a couple weeks ago my car suffered an $850 breakdown. If I was low-income, disabled and approved to receive my $721 monthly SSI payment, almost half my allowable assets would have been wiped out. By prohibiting SSI recipients from building a solid financial foundation, be it an adequate emergency fund or retirement savings, asset limits prolong poverty and dependency on government income supports.

To SSI’s credit, certain resources are excluded from the assets test like one’s home and car. Individual Development Accounts (IDAs) that restrict savings goals to a first home, postsecondary education or starting a business are also excluded as long as they’re funded via Temporary Assistance for Needy Families (TANF) or the Assets for Independence (AFI) Act. However, only 16 states funded IDA programs in 2013 and not necessarily via TANF. AFI IDAs are more widespread across the country, but given their smaller size as local programs, they may not be able to sign up as many participants. Also, SSI recipients must be working to qualify for either IDA, but most people with disabilities are unemployed.

SSI’s work disincentives contribute to this high unemployment rate. People with disabilities often have expenses the rest of us don’t. SSI and Medicaid, which most SSI recipients automatically qualify for, help them weather these costs. Naturally, a big fear for beneficiaries is losing that support, or for applicants not qualifying, due to excessive income. The Government Accountability Office may have said it best: “[work] incentives need to be aligned so that work becomes the rational choice for [disabled] individuals who can work and not the risky choice.”

It doesn’t take much to have your SSI application denied because you work. If your monthly earnings average more than $1,070 (barely above the official poverty line, which doesn’t factor in often costly disability expenses), you’re ineligible unless you’re blind. Income exclusions help those already on SSI earn somewhat more, but at the cost of a sharply reduced SSI payment.

CFED recommends increasing asset limits, indexing them to inflation, and exempting restricted accounts like 401(k)’s and 529 education plans. Members of the House and Senate proposed creating tax-free accounts specifically for people with disabilities so they can save money for an array of assets, such as education, housing and transportation. Now we just need the votes.

Happy birthday, ADA. Make a wish that asset-friendly disability policies attend next year’s party.

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Asset Building News Roundup - July 25, 2014

By Paul Day on 07/25/2014 @ 03:58 PM

Tags: News


Design Thinking for Wonks and Practitioners
Wednesday, August 6th, 2014
Hill Center at the Old Naval Hospital, Washington, DC
Learn how to integrate the tools of design to get surprising, tangible results.


Solana Rice, Cleveland native and CFED senior program manager, was featured in the Cleveland Plain Dealer with a bold call to action for NBA star LeBron James on Children’s Savings Accounts.

A new paper was released this week by the New America Foundation arguing that properly designed Children’s Savings Accounts can have lasting, positive effects on children's educational development and can improve their long-term economic outcomes.

Last week, the Consumer Financial Protection Bureau released the 2014 Financial Literacy Annual Report to Congress. In it they described their work over the past year to promote financial education for American consumers.

A University of Michigan (UM) study found that wealth inequality has doubled over the last 10 years and households at all levels lost wealth during the recession. "American families experienced significant losses in wealth during the Great Recession, and these losses were distributed very unequally," said Fabian Pfeffer, Assistant Research Professor at the UM Institute for Social Research.

The National Journal did an excellent piece on “A College Savings Account for Every Child,” highlighting different programs across the country and how even a small amount of savings can increase the odds that a child will earn a degree.

From the Assets & Opportunity Network

On June 18, Michele Johnson, Chair of the Nevada Asset Building Coalition, and Nancy Brown, Chair of the Nevada Opportunity Alliance, attended the Nevada Department of Health & Human Services (NDHHS) TANF asset limit hearing in Carson City. The NDHHS recommended an increase of the TANF asset limit test from $2,000 to $6,000. Michele and Nancy formally requested that the asset limit test for TANF be totally removed. Check out a recap of the hearing here.

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Interview: CFED Interns Participate in Poverty Simulation

By Paul Day on 07/25/2014 @ 03:45 PM

Tags: Behavioral Economics, Events

Last week, CFED interns Anne Guthrie, Valerie Marshall and Alexander Scarlis played the role of service providers in a simulation for nearly sixty Capitol Hill legislators, staff and interns to experience what it’s like to be in poverty. We sat down with Val and Alex to discuss their thoughts about poverty simulations and how they can be a valuable tool to change perceptions about the working poor.

Q: What did you hope to learn from this? Were your expectations fulfilled?

Alex: I don’t know what it feels like to be in poverty. I was very curious to see how I felt being in this simulation. I was curious to see how members of Congress as their staff reacted and what it felt like for them to be in poverty. It was chaotic and stressful for everyone involved to a certain extent. But I think they found the right balance.

Val: I had never been to a poverty simulation before so I had no reference point. I had no idea what they were going to do. I was looking to get the experience to see what they were going to say about poverty. You had to confront this feeling of helpless on a whole new level. They emphasized key things most people don’t even think about, like transportation. For example, to go from table to table you had to pick up a transportation ticket. So as these public transportation systems start raising their costs, obviously it’s going to have a big impact.

Q: From what you know about poverty in a policy sense, how accurate was the simulation?

Alex: Well I think they nailed all of the different programs that poor people have available but they are in all of these different places so you had to run around trying to gather all of this documentation and maintain a semblance of a healthy family life which means grocery stores, getting your car fixed and getting to work on time. It’s everything we all do plus trying to make sure your benefits stay intact, which is next to impossible.

Val: I thought from the participant side it was really realistic. It was really overwhelming in the sense that you got that constant stress that I think a lot of families living in poverty experience.

Q: Was the stress level of the simulation intentional or accidental by how it was organized?

Val: I think it was designed to mimic the environmental stressors. The families they designed were actually real cases they had from some Department of Health and Human Services database so it really was realistic. In the simulation I had two children plus a younger sister who was under eighteen that I had to take care of and I had to negotiate those responsibilities in addition to my own education and rent. It was definitely a good reminder of why we’re doing the work that we’re doing.

Q: So there were members of Congress there participating as individuals and families in poverty. What were some of their reactions?

Alex: Everyone was trying to keep track of their money and make sure they have everything in order because everything was so chaotic around. It was too bad that more members of Congress weren’t participating, but it was actually great a lot of interns and staff were participating because they’re often the ones writing up the legislation, doing the research or advising the representative.

Val: A lot of members of Congress spoke before and during the event. There was a huge emphasis during the event about the working poor and just because you live in poverty doesn’t mean you’re lazy, dispelling these old stereotypes about who’s on welfare vs. those who aren’t. But there were still some reminders of that archaic way of thinking. There are still areas for progress.

Q: Would it make sense to branch out and do these kinds of simulations in other cities?

Val: I think it would be a good idea. Most politicians come from an affluent background and having this sort of education would counter other things they’ve learned. It’s one thing to hear about an experience from a constituent and another to have the experience yourself.

Alex: If politicians are responsive to their constituents, then theoretically we need to change the perceptions of the constituents. From that perspective, it would make sense to have a lot of these simulations around the country that are accessible to the general public. When you have a mindset shift among people then you’d think that would trickle up to Congress because at the end of the day, they have to be responsive.

Q: Can you talk about where poverty simulations fit in the context of CFED’s work? What insights has this experience given you?

Alex: To have these members of Congress and staffers participate, hopefully when they read our work about asset limits and the struggles people face that translates and something connects. It would be great if this was more widespread in the policy world; otherwise it’s just statistics.

Val: A lot of the research we’ve been looking at in the applied research department has been looking at the role of financial literacy and applying those skills and changing behaviors across the lifespan. It really shows the value of having financial knowledge and knowing which questions to ask, who you need to speak to, all that stuff underscores what we’ve been looking at.

For more perspectives on the recent Capitol Hill poverty simulation, read this latest Washington Post story.

You Might Like

Assets and Freedom (Alexander Scarlis)
Why CFED? Why Not? (Valerie Marshall)

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Asset Building within a Two-Generation Framework

By Anne Guthrie on 07/24/2014 @ 05:00 PM

Tags: ALC 2014, Children's Savings Accounts, Financial Empowerment

It’s an exciting (and busy!) time to be at CFED when everyone is preparing for the Assets Learning Conference. Not one staff person is left out in contributing energy, time and passion in planning the sessions. The Savings & Financial Capability Team is working on a number of sessions including a Financial Coaching Capacity-Building Intensive, Children’s Savings and Aspirations, and Wealth Building and Protection in the Workplace.

Being a part of the planning process has been eye-opening for me as we recruit speakers, gain insights from leaders in the field and plan engaging panel discussions. One session that I have been particularly excited about is the Two-Generation Interventions session.

The two-generation strategy aims to break the cycle of poverty by focusing on both children and their parents together in creating opportunities for the whole family to move up the economic ladder. Most two-generation programs couple a quality, early childhood education program with services for parents that help them gain the resources, knowledge, and skills to achieve economic stability. These programs include employment and education, health and wellness, and parenting classes.

The Aspen Institute Ascend Network builds capacity for two-generation programs. Its goals are to mobilize and empower organizations and leaders to influence policy and practice in bringing opportunities to children, parents, and their families. CFED’s President, Andrea Levere, is one of the Ascend Fellows who has brought asset building to the forefront as a crucial strategy to help children and families plan ahead for the future and achieve long-term success. The session at the Assets Learning Conference will focus on how two-generation programs can integrate financial capability into their work, such as Children’s Savings Accounts, financial coaching and education, and access to affordable financial products.

As a part of this work, I have been conducting research and field scans that look at how two-generation programs can integrate financial capability strategies into their work and how parents can influence money management behavior in their children as they develop. It has been eye-opening to discover the many organizations that have innovative programs for both children and their families, including CAP Tulsa’s CareerAdvance® program that helps parents advance their education and training for higher paying jobs while their kids attend an early childhood education center, or the Jeremiah Program that provides single mothers and their children with safe and affordable places to live coupled with early childhood education, life skills training and career-track education.

The asset-development field has a great opportunity to continue to advance the two-generation framework in helping parents and their children reach financial security. I look forward to hearing from innovative leaders at the Assets Learning Conference who are pioneering asset-building strategies within the two-generation framework to ensure that this generation—and the next generation—achieves upward mobility and opportunity.

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Towards Comprehensive Financial Services

By Dennis White, Guest Contributor on 07/22/2014 @ 04:36 PM

Tags: ALC 2014, Economic Inclusion, Financial Empowerment

Dennis White, MetLife Foundation

Dennis White, MetLife Foundation

MetLife Foundation believes in the transformative power of financial services. That core belief has shaped MetLife’s business since our founding in 1868. And in 2013, that same belief inspired MetLife Foundation’s new focus on financial inclusion—our commitment to ensuring that low-income households and businesses have convenient access to a full suite of quality, affordable financial services, delivered by trustworthy providers with respect for the customer.

One of the key points above is full suite—the insight that low-income people, like everyone else, need comprehensive financial services. As microcredit, originally launched in Bangladesh in the 1970s, came of age, the industry realized that low-income people needed more than just credit for microenterprises. They also needed credit for other purposes, like education or major life events like weddings and funerals. They needed savings accounts, insurance products, money-transfer services, asset-leasing and pensions. The term microcredit was replaced with microfinance to reflect this broader understanding.

The microfinance industry today reaches more than 200 million people—an incredible achievement, but still only about 10% of the estimated global need. The new term financial inclusion captures the reality that a parallel system of specialized microfinance institutions (with specialized regulatory frameworks) is unlikely to meet the financial needs for the 2.6 billion people without even a basic bank account. Financial inclusion is about leveraging the existing system—microfinance institutions, but also banks, credit unions, insurers, government pension programs—and connecting those players to each other and to nonfinancial players (e.g., mobile network operators, retail outlets with large operating footprints) to scale up outreach. Full financial inclusion will have to involve the whole financial system, not only separate, specialized groups of providers.

The goal of the global financial inclusion community is to ensure that everyone has the comprehensive financial services they need to pursue more from life. The image that comes to mind for those of us at MetLife is one of our most famous symbols: the Peanuts© character Linus and his trademark blanket. Everyone understands Linus’s blanket as giving him a sense of security. But here are a few things to notice about it. First, it is a full-size blanket—not one little piece. Second, it has a seamless integrity. It is not a patchwork of stitched-together leftovers that is about to fall apart. By contrast, for too many low-income families, their financial services—their security blanket—is just such a fragile patchwork. They may get credit from the local pawnshop and from a microfinance institution and from their neighborhood savings-and-credit club and a quick loan from family or friends. They may save money by hiding it at home, or giving some to the local savings collector. To the casual observer, it may appear that low-income families already have a wide range of financial tools. But few of those tools actually do the job—like trying to stay warm under a blanket riddled with holes and coming apart at the seams.

So how can more of the world’s low-income people get that financial security blanket? As noted above, financial inclusion will require all players, globally and locally to do their parts. MetLife Foundation’s part, set forth in our strategy—is to support and promote financial inclusion in the countries where we operate. We designed an integrated grant-making approach around three pillars—Access & Knowledge, Access to Services and Access to Insights—in order to pursue holistically what often gets pursued in isolation—supply, demand and market-building.

Access & Knowledge works on the demand side. Grants under this pillar seek to increase low-income families’ readiness, willingness and ability to engage with the formal financial services sector. Access to Services, meanwhile, works on the supply side; after all, it is poor practice to build people’s capacity to use appropriate financial services if there are no such services available. So grants under the second pillar focus on ways to develop and deliver high-quality products. Finally, MetLife Foundation takes seriously our responsibility as one of the larger private-sector funders in financial inclusion. Access to Insights grants focus on research and sharing what we learn with the financial inclusion community and beyond to accelerate the pace and scale, and increase the quality, of our collective work.

Ours is a comprehensive strategy aimed at expanding comprehensive financial services. MetLife Foundation’s website details our strategy and describes our work to date. We are pleased to count CFED among our grantees, and to be a sponsor of the 2014 Assets Learning Conference.

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Assets and Freedom

By Alexander Scarlis on 07/21/2014 @ 01:48 PM

Tags: Financial Empowerment

Over the July 4 weekend, my wife and I sat in a movie theater waiting for the previews to begin. A song played on a loop while images of fireworks and the American flag danced across the screen. The chorus included “I’m proud to be an American, where at least I know I’m free.” I struggled with that last part.

In theory, we should all enjoy the same legal and political rights. In practice, there are exceptions. Take, for example, the right to vote—one of the most fundamental rights of all citizens of a democratic republic. Conviction that suffrage should be universal motivated the ratification of the 15th and 19th amendments to the constitution, and was a central battle of the civil rights movement. And yet, convicted felons can’t vote in certain states, in some cases even after completing their sentence. Another exception: women, the poor and the elderly may find it more difficult to vote, and young minorities already found it more difficult thanks to voter ID laws in a majority of states (with more coming after the Supreme Court’s partial rollback of the 1965 Voting Rights Act).

I also find it difficult to reconcile the idea that we’re all free with the socio-economic reality of millions of Americans. Merriam-Webster defines freedom as “the absence of necessity, coercion, or constraint in choice or action.” If you face more “constraint in choice or action” than I do, then my freedom exceeds yours, which then raises the question of whether you are truly free. Relative freedom is surely as un-American as it gets.

As it turns out, the boundaries of our individual freedom are defined as early as the womb. Brain development is shaped most in life’s early years and the damage wrought by poverty’s toxic stress can permanently restrict a child’s freedom, from learning disabilities to behavioral problems.

The early barriers to true life-long freedom don’t end there. One of the first questions many new or soon-to-be parents ask themselves is how good are the local schools? How many parents have the freedom to then move to a higher quality (read: more expensive) school district, or move at all, given their financial resources? How many parents have the freedom to send their kids to college without overloading them with freedom-killing debt, let alone to their college of choice? How many parents have the freedom to burnish their kid’s resum—, I mean, college application, with violin class? Or math camp? Or private-tutor-enhanced SAT scores?

Even if you accept the poorly substantiated argument that some parents can only blame themselves because they don’t work hard enough (a low-wage, no-benefits job will only get you so far), what do you tell their kids? Odds are most of those kids will end up not much better off than their parents. There comes a time when society must use its collective might to end this cycle and give its less fortunate children a chance at real freedom. And if stable kids require stable relationships, then public policy cannot ignore their parents either.

CFED actively pushes asset-building policy proposals with these goals in mind. Children’s Savings Accounts improve both early childhood development and academic outcomes. A reformed tax code would help all families build wealth (and wealth is a freedom magnet). Manufactured housing offers low-income families a shot at what is still a bastion of the American Dream: the financial and emotional security of affordable homeownership and all the happy byproducts that come with it, from more stable neighborhoods to kids scoring higher on academic tests. You can find more freedom-friendly ideas here.

I don’t deny the possibility that limitations on an individual’s freedom of choice may be a consequence of that individual’s choices. Yet as a country that prides itself on freedom, we must realize the dangers inherent in assumptions of personal failure. If we’re wrong, we are relegating the falsely accused to a life none of us would wish for our own children. Barring a political uprising by the working poor, the responsibility to enact policies that benefit all families rests with the politically influential who are rarely low-income. Merriam-Webster also defines freedom as “liberation…from the power of another.”

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Catalyst Forum Brings Together Senator Cory Booker and NFL Star Justin Tuck to Talk with NYC Leaders About CSAs

By Carl Rist on 07/18/2014 @ 10:25 AM

Tags: Children's Savings Accounts

At an intimate event Monday, co-hosts Justin and Lauran Tuck and New Jersey Senator Cory Booker engaged an audience of New York City leaders in a conversation about children’s savings accounts (CSAs) and college access. Sponsored by the Admiral Center and the Tuck's R.U.S.H. for Literacy, the conversation provided participants an opportunity to learn about the power of CSAs in building college aspirations, hear about the growth of CSA initiatives in the New York City area, and engage in a discussion about how to extend this opportunity to all students in the region through the 1:1 Fund.

The 1:1 Fund partners with local child savings programs to provide incentives that spur low-income families to save and plan for college, including several programs in the New York city area.

All-Pro defensive end, Justin Tuck, and his wife Lauran kicked off the conversation and talked about the importance of higher education and their support for CSAs through a generous donation to the 1:1 Fund to benefit young savers at the Children’s Aid Society in New York City.

The Tucks were followed by Angela Carson Hines and her daughter, Asia, who opened a CSA when Asia was a middle-school student at KIPP DC. Angela noted that when they started saving in their KIPP College Account, “my mind changed,” and that now everything the family does is about investing in their kids’ futures. I loved her quote about preparing financially for college: “We attack the money.”

I can’t think of a more inspiring collection of speakers to talk about CSAs. Thanks to Sherrie Deans and Evelyn Burnett from the Admiral Center for working so hard to organize the Forum and to Brandee McHale, Rosemary Byrnes and all of their colleagues at Citi for hosting the event.

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Assets Learning Conference to Offer Special Training Workshop for Federal Agency Staff

By Sean Luechtefeld on 07/17/2014 @ 11:30 AM

Tags: ALC 2014

ALC 2012

Policy action that makes a meaningful difference in the lives of financially vulnerable Americans must come from all levels and all branches of government. From city hall to the statehouse and from Congress to federal agencies and the Oval Office, there are a range of tools at policymakers’ disposal that can help families become financially secure.

The Assets Learning Conference (ALC) has evolved over the years to become a major resource for agency staff and policymakers who want in-depth information about policy and program strategies that reduce wealth inequality and help low- and moderate-income families achieve long-term financial stability.

This year’s ALC, taking place September 17-19 in Washington, DC, will attract policymakers from all levels of government seeking to do more to help hard-working families achieve the American Dream.

New to the ALC this year is a special half-day training session for federal agency staff that will focus in-depth on the opportunities and benefits of integrating asset-building and financial empowerment strategies into federally funded programs. This special session on September 18 is designed to respond to demand from government staff eager to learn about how asset-building strategies can inform their work and improve their program outcomes. In numerous programs, agencies and offices, there are manageable and moveable ways to incorporate measures that can increase financial security. Hence, the training will emphasize programs doing innovative work to integrate asset building into social service delivery programs, while highlighting opportunities for government employees to create similar programs in their own offices.

The special session for federal government staff is just one way that CFED uses the ALC to connect lawmakers and administrators with practitioners and researchers seeking to make a difference in the lives of financially vulnerable Americans. This is in addition to the 60+ educational and interactive sessions, as well as a series of opportunities to network during the three-day conference. For more information about these and other opportunities, and to register for the ALC, visit

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Changing Mindsets About Manufactured Housing

By Will Hansen on 07/16/2014 @ 11:28 AM

Tags: Housing and Homeownership

Manufactured Home

In my last post I focused on why I chose to work at CFED and my journey across the country to get to Washington. This post will focus on my work with the Homeownership team and how we're changing mindsets about manufactured housing.

The Homeownership team’s focus is to promote asset building for low-income individuals by helping them realize the American Dream of homeownership through manufactured homes.

At CFED, we are very careful with our choice of words in regards to manufactured housing: we don’t refer to trailer parks or single-wides because it perpetuates the stigma that manufactured homes are worse than site-built homes. Our goal is to help people realize that manufactured homes are a safe, affordable and quality source for homeownership.

As the intern, I assist the team by providing background data and policy research for any written publications we have. These written publications can include policy briefs, newsletters for our I’M HOME Network or information packets for upcoming conferences. Most recently I have been working on putting together research and presentation materials for an upcoming conference on manufactured housing in southwest Pennsylvania.

I have also taken on the responsibility to grow the size of the I’M HOME Network to transform manufactured housing finance, advocate for reforms in the manufactured housing policy arena and communicate about the value of manufactured housing as a source of affordable homeownership for millions of Americans. To achieve this goal it is crucial that our Network is diverse and includes members of the academic field, manufactured housing industry, community development and affordable housing partners.

By getting the right individuals in the Network, we can really improve the quality of information being disseminated to our partners. Getting the right people in the network is not as straight forward as it may seem. Unfortunately, there is not a list of every person who has written about or worked in the field. To find the best possible members, I spend a lot of my day reading articles and researching organizations to see if their message is one that would fit the expertise we need in the Network. It takes a lot of time and effort to cultivate such a network, but I believe that the best way to promote change is to let people know that there is a problem, and that there are people out there working to solve that problem.

I hope to continue working on the I’M HOME Network until I leave CFED at the end of the summer. My perception of manufactured housing has changed so much since working at CFED. I can only hope that by getting the right people involved with the Network and providing the facts that we are able to change public perception of manufactured housing in the same way my perception has changed.

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Asset-Building News Roundup - July 11, 2014

By Sean Luechtefeld on 07/11/2014 @ 12:00 PM

Tags: News


For folks coming to DC for CFED's Assets Learning Conference, an adjacent opportunity is the Bipartisan Policy Center's 2014 Housing Summit on September 15 & 16. For more information, check out the Summit website.


On Wednesday, the United States Senate confirmed former San Antonio Mayor Julián Castro as Secretary for Housing & Urban Development. CFED issued a formal statement applauding Castro's confirmation; read it here.

Earlier this week, the Doorways to Dreams (D2D) Fund released a series of briefs documenting the impact of their Save to Win prize-linked savings program for tax year 2013. The state-by-state impact briefs, along with other Save to Win documents, can be downloaded here.

Earlier this week, the Assets & Opportunity Network announced that three organizations would be recipients of technical assistance thanks to the JPMorganChase-funded Technical Assistance Fund. The three organizations are Catalyst Miami, Louisville Metro Community Services and Revitalization, and Wayne Metro Community Action Agency.


The Northwest Area Foundation launched the Financial Inclusion Policy Action Initiative this week, which seeks to identify organizations who are working to learn about and advance policy issues that improve the financial lives of low- and moderate-income families in the Foundation's eight-state footprint. Eligibility is open to organizations in Washington, Oregon, Idaho, Montana, North Dakota, South Dakota, Minnesota, Iowa and the 75 sovereign Tribal Nations that share the same geography. For more information or to apply, download the RFP.

CFED is still in the market for a Senior State & Local Policy Manager, as well as a Senior Program Manager for our Savings & Financial Capability team. We're also looking for an IT Generalist. Each of these positions are located in our D.C. office. For more about these, visit our Careers page.

Does your organization have relevant content that you'd like to include in our weekly roundup? Email it to CFED and she'll be happy to add it in.

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CFED Applauds Senate Confirmation of Castro for HUD Secretary

By Alexander Scarlis on 07/10/2014 @ 03:00 PM

Tags: Federal Policy

Washington officially welcomed former San Antonio Mayor Julián Castro yesterday when the Senate confirmed him as Secretary of the U.S. Department of Housing and Urban Development. Check out CFED’s press release offering Secretary Castro our own warm welcome. We’re all really looking forward to working with him as we continue our quest for economic opportunity and financial security for all!

CFED Board of Directors members with newly confirmed Secretary of Housing and Urban Development Julián Castro

WASHINGTON, D.C. – The Corporation for Enterprise Development (CFED) applauds the Senate’s confirmation of San Antonio Mayor Julián Castro as Secretary of U.S. Department of Housing and Urban Development (HUD). Secretary Castro brings with him both hands-on knowledge of what works for urban communities and a dedication to helping all Americans reach their full potential. His demonstrated leadership on expanding educational and economic opportunities for thousands of San Antonians gives us great hope for what he will accomplish for all low- and moderate-income families in his new role as Secretary.

“We are excited to work with Secretary Castro to expand economic opportunity in America by promoting asset-building and manufactured housing in communities throughout the country.” said CFED president Andrea Levere. “The CFED Board was fortunate enough to convene in San Antonio earlier this year, and he graciously set aside time to meet with us amidst a flurry of activity in the City Council. Today we send him our heartfelt congratulations on another well-deserved milestone in his astounding career.”

CFED is a national nonprofit 501(c)3 organization that empowers low- and moderate-income households to build and preserve assets by advancing policies and programs that help them achieve the American Dream, including buying a home, pursuing higher education, starting a business and saving for the future.

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The Assets & Opportunity Network Kicks Off Third Round of Technical Assistance Fund

By Fran Rosebush on 07/10/2014 @ 11:30 AM

Tags: Assets & Opportunity Initiative

This week, the Assets & Opportunity Network starts work with organizations participating in the third and final round of targeted technical assistance available this year through the JPMorgan Chase-funded Technical Assistance (TA) Fund. The TA Fund is designed to leverage expertise within the Network to help organizations address their critical issues, strengthen their work and explore new avenues to increase their impact. The TA Fund is designed to demonstrate how the Network can spread knowledge, share tools and assist organizations with achieving their goals.

More than 50 Lead Organizations in the JPMorgan Chase footprint were invited to apply. Three projects were selected for the third round:

  • Catalyst Miami will receive assistance refining their hiring and training process for financial coaches, as well as beginning to develop a referral map for their financial coaching services.
  • Louisville Metro Community Services and Revitalization will receive assistance with the development of an interactive client workbook around the importance of credit and credit issues.
  • Wayne Metro Community Action Agency will receive assistance with the design of an implementation plan to integrate financial empowerment and financial coaching services throughout their agency.

In addition, the TA Fund is supporting a new peer learning series that will be open to all Network Lead Organizations. The three-part virtual peer learning series will focus on challenges and solutions with data collection and evaluation. At the end of the series, key lessons and insights from the series will be shared through a webinar for all Assets & Opportunity Network members.

The first round of projects with the Connecticut Asset Building Collaborative, Oregon IDA Initiative and the Women’s Opportunity Resource Center came to a close last month. The second round of projects with the Minnesota Asset Building Coalition, Alameda County Community Action Network, Maryland CASH Campaign, Center for Asset Building Opportunities and the Florida Prosperity Partnership are preparing to wrap up over the next few weeks. The third round of projects will run through August 30.

One way that we are planning to share lessons gleaned from the Technical Assistance Fund is through a weekly blog series. Starting next week and running through October 23, we will share blog posts written by TA providers and recipients from the individual TA Fund projects who will share lessons and insights from their TA Fund projects. Stay tuned!

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Behind the Scenes: Recruitment @ CFED

By Macy Cheeks on 07/09/2014 @ 09:00 AM

Tags: Just for Fun

EDITOR’S NOTE: This is the second post in a series from our Graduate Intern for Human Resources, Macy Cheeks. Today, Macy goes behind the scenes in the recruitment process, sharing the process we go through to bring the most amazing colleagues ever to CFED.

Wes Lin is our Human Resources Generalist. He’s been away for a couple weeks as he got married at the end of June (congrats, Wes!). In his absence, one of my main tasks has been to keep our recruitment efforts going. I quickly recognized that recruiting for an organization of CFED’s caliber would be a challenge. CFED is able to achieve and make significant strides in programs, research and policy advocacy because of the intelligent and dedicated staff. I thought to myself, “How do I recruit candidates that will add additional value to this organization?” Needless to say, a mini panic attack soon followed. However, Wes made sure that I was well prepared by providing me with a crash course in recruitment and a much needed pep talk! Days later, I leaped head first into this jigsaw puzzle called staffing at CFED (and my first recruit, Digital Media Manager Paul Day, starts today!).

Every day I sift through dozens of applications and cover letters on Newton, our applicant tracking software. When I come across a great candidate, I forward their resume and cover letter on to the hiring manager. The hiring manager will review the documents and if the candidate looks good, will recommend moving forward with a telephone screen. A phone screen serves as a tool to gauge the overall experience and interpersonal skills of a candidate. At first, conducting screens was the most nerve-racking part of my internship! Once I became comfortable I started to truly enjoy chatting with candidates about their background and professional interest.

If the phone screen goes well, I will schedule a phone interview and possibly an in-office interview with the hiring manager. Logistically, I found that the most challenging part of recruitment is coordinating interviews with staff. With calendars booked months in advance, attempting to find a free hour that works for both the candidate and CFED team members is tough.

I give the interview team time to debrief after the in-office interview, and if the candidate is a good match, I get to deliver the news. Notifying a candidate that they have been selected for a position at CFED has been the best part of my internship so far!

During these three weeks, I have gleaned some important lessons about staffing/recruitment at CFED:

  1. The employees are CFED’s biggest asset and are responsible for the everlasting success of CFED. It takes time to find the right individual who is sincerely passionate about the work that we do here. You can’t rush recruitment.
  2. From an applicant’s perspective, HR professionals are the face of the organization. Unwavering confidence and the ability to communicate well are crucial traits to have when attracting potential employees.
  3. The most rewarding part of HR is making job offers. Finding someone who will mesh well with the team and contribute to the bigger picture is a fabulous feeling, comparable to completing a very difficult jigsaw puzzle.

Interested in a career at CFED? Browse our openings!

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The Key to Regaining American Opportunity and Fiscal Freedom

By Sean Luechtefeld on 07/08/2014 @ 09:30 AM

Tags: Events, Recommended Reading

On Wednesday, June 25, CFED Founder and Board Chair Bob Friedman had the opportunity to moderate a panel discussion at San Francisco’s Commonwealth Club, titled “The Key to Regaining American Opportunity and Fiscal Freedom.” The discussion featured longtime CFED friends Eugene Steuerle, Former Deputy Assistant Secretary of the U.S. Department of the Treasury and author of Dead Men Ruling: How to Restore Fiscal Freedom and Rescue Our Future, and Frank Yeary, Former Vice Chancellor of the University of California at Berkeley and Co-founder and Chair of Level Money.

From left: Bob Friedman, Eugene Steuerle, Frank Yeary

In Dead Men Ruling, Gene argues that with both tax cuts and entitlement spending on autopilot and more than claiming all additional growth dividends, there is no ability to make investments in the younger generation (the first generation in our history unlikely to do better than their parents) and all other changing needs going forward unless both the Left and the Right free the future. Frank Yeary followed by underscoring that we are investing in aging baby boomers to the detriment of younger Americans, and describes his efforts to organize "an AARP for young people" based on a financial planning app, LevelMoney, designed to give millennials a measure of clarity and control over their finances.

Eugene Steuerle (left) and Frank Yeary

More information about the event can be found here. In the coming days, video from the event will be uploaded as well, so check back when you’ve got a few extra minutes; it’s worth the watch.

Steurele’s book, Dead Men Ruling, is available for purchase on Amazon.

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Removing Barriers to Building Wealth

By Charles Tilley on 07/07/2014 @ 12:00 PM

Tags: Financial Empowerment, State Policy

After a little over a month working with CFED, I can safely say that policy surrounding financial security is seldom straightforward. Be it conflicting regulatory statutes or abstruse language in state program manuals, there is normally an element of challenge in fully understanding a given policy. However, the chance to investigate so many different issue areas in preparation for CFED’s annual Assets & Opportunity Scorecard has provided me with a much deeper understanding of the asset-building field.

Asset limits have stood out prominently in my mind as a policy area which seldom enters the mainstream political debate or media dialogue, but one which deserves careful consideration. Individual states are given leeway in how to structure federal assistance programs such as SNAP (Supplemental Nutrition Assistance Program, formerly Food Stamps), TANF (Temporary Assistance for Needy Families) and LIHEAP (Low-Income Home Energy Assistance Program), leading to considerable variation in eligibility requirements and program design from one state to another. In addition to income requirements, though, some states include resource limits—or asset tests—in their programs’ eligibility criteria. States are given discretion to set asset limits for these federal assistance programs, or to forego asset tests entirely.

Where these lines are drawn, however, can generate significant financial responses from program participants. Depending on the structure of eligibility standards, possession of a vehicle, burial fund or Individual Development Account (IDA) could push a household above the resource limit. Thus, not only is the asset limit itself important, but states’ decisions regarding which resources are excluded in asset calculations also have a tremendous bearing on families’ ability to build wealth.

By their very nature, resource limits can encourage a “spending down” of assets in order to maintain program eligibility. However, the ultimate goal of federal assistance programs is to move people towards self-sufficiency. The potential disconnect here is clear.

Another aspect of these tests is the creation of an “effective asset limit.” That is, even if a resource limit is lifted or eliminated for one or even two programs, a more restrictive limit in a third serves as the effective limit when a family seeks access to all three programs. Since families often participate in more than one federal support program, the most restrictive limit can become the default if a family chooses to “spend down” to secure eligibility for that program. Below is an example:

In this scenario, the state’s TANF limit supersedes the SNAP and LIHEAP limits when applying for all three programs. While this hypothetical state has eliminated its SNAP asset test, the TANF limit will restrict families applying to both programs and could incent “spending down” to meet eligibility requirements even though such behavior has no effect on SNAP eligibility. For this reason, harmonizing asset limits across programs can be a powerful tool.

The ultimate takeaway is that many policies and programs interact in ways which may not be readily apparent during the design and implementation phases. However, it is important for advocates (like CFED, the Assets & Opportunity Network and other partners) to shed a light on these policy intricacies to help effectively leverage existing programmatic resources and advance a legislative platform that fosters financial security and promotes asset building. For a more comprehensive overview of state-by-state asset limits, check out last year’s relevant Scorecard pages.

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Lessons from History on “Integrated Service Delivery”: A Primer

By Anne Guthrie on 07/03/2014 @ 09:30 AM

Tags: Financial Empowerment, Integrated Service Delivery

EDITOR'S NOTE: This blog post is the second in a series from Anne Guthrie, Graduate Intern for Savings & Financial Security. It's a great read for anyone wanting a quick but comprehensive overview of the history of integrated service delivery.

“Integrated service delivery” is one of the most popular topics in the asset-development field. What was once a jargon-laden term confined to public administrative journals is now widely used in describing a particular asset-building model that has gone to scale over the last five years. This model was first piloted by the Annie E. Casey Foundation when it launched its Centers for Working Families (CWF) in 2004. The CWF model integrates employment, income supports and financial services to address the multiple and complex needs low-income families have in reaching long-term financial stability.

A record number of nonprofit organizations have embraced the CWF approach. There are now Financial Opportunity Centers, Spark Point Centers, Prosperity Centers, Financial Empowerment Centers and others—each may have a different name and variations on the model, but all embrace the core strategy of integrating workforce and asset-based services. Just last year, the Working Families Success Network was formed to build the capacity for what is now known as the “Integrated Service Delivery” (ISD) model. This network collectively invests and delivers the ISD model in over 155 locations in more than 30 cities in 12 states around the country.

With excitement surrounding the ISD model, I found it interesting that “integrated service delivery” is not a new concept. It has been recognized since the beginning of settlement houses in the early 1900s, where government and nonprofit organizations offered autonomous programs that enabled a family’s ability to receive all the supports necessary to escape poverty. A prime example is Jane Addams’ Hull House, which offered housing, health, employment, child care and household money management activities under one roof.

Of course, you can see the roots of integration at the policy level starting with the War on Poverty in the 1960s, where neighborhood centers coordinated a range of services that targeted specific low-income neighborhoods. However, it was not until 1972 that the term “integrated service delivery” was born thanks to the Department of Health, Education and Welfare’s (HEW) Service Integration Targets of Opportunity (SITO) projects and Partnership Grants Program. At this time, HEW estimated that that 85% of clients needed more than one service, but only 20% who were referred to other resources were able to connect.1 Here’s another mind-blowing fact: when a mother visited the welfare office, her needs required the response of 15 separate public and nonprofit organizations.2

This first wave of integration aimed at consolidating major departments to offer integrated programs under one umbrella. However, many services remained fragmented, and the administrative integration failed to translate into an increased number of families enrolled in more than one service.3 In 1984, Congress initiated a new program, the Services Integration Pilot Projects, and the National Center for Service Integration was established. This second wave of integration efforts focused more on the operational mechanics in designing service flows and training staff to enroll clients in multiple services. This philosophy eventually led to the “One-Stop Centers” in the late 1990s that consolidated separately funded programs to provide a full range of services to job seekers under one roof.4

The service integration movement resulted in cross-agency planning, increased caseworker communication, a wider referral network, linkages to community colleges and the convenience of services located in one center. However, multiple studies found that the majority of departments in “one-stops” still had a ways to go in being truly integrated. While departments were consolidated and services were under one roof, the majority of programs remained confined by their individual funding streams with separate goals and performance standards. Service integration also takes a considerable amount of time and effort to maintain. Without strong leadership behind the model, caseworkers passively refer to one another, and clients remain confused in a sea of disjointed programs. Thus, programs were better coordinated, but not all were integrated to ensure clients were active and supported in more than one service.5 6

This next wave of integrated service delivery through the Working Families Success Network and other organizations operating the ISD model will continue to build upon this history and move the needle towards understanding true integration. Not only will the ISD model continue to help the field understand the factors the lead to successful integration, but it has broadened the concept to include the integration of asset-building and financial coaching services. Up until this point, the history of integrated services has primarily concentrated on income-based services (e.g., employment, education, training, income supports). This shows that it is not only about integration, but integrating the right services, and that including a coach, or someone by a family’s side, may be crucial in helping low-income families navigate multiple services and reach financial stability.

1 Waldfogel, J. (1997). The New Wage of Service Integration. Social Service Review, 71(3), 463-484.

2 Agranoff, R. (1991). Human Services Integration: Past and Present Challenges in Public Administration. 51(6), 533-542.

3 Voydanoff, P. (1995). A Family Perspective on Services Integration. Family Relations, 44(1), 63-68.

4 Agranoff, R. (1991). Human Services Integration: Past and Present Challenges in Public Administration. 51(6), 533-542.

5 Ragan, M. (2003). Building Better Human Service System: Integrated Services for Income Support and Related Programs. Albany, NY: The Nelson A. Rockefeller Institute of Government.

6 Pindus, N., et al. (2000). Coordination and Integration of Welfare and Workforce Development Systems. Washington, DC: The Urban Institute.

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50 Years After Civil Rights Act, Many Households of Color Still Struggle to Get Ahead

By Alicia Atkinson on 07/02/2014 @ 02:00 PM

Tags: Data and Research, Economic Inclusion

“We believe that all men are created equal. Yet many are denied equal treatment…not because of their own failures, but because of the color of their skin.”

President Lyndon B. Johnson, Signing of the Civil Rigts Act, 1964 

Today marks the 50th Anniversary of the Civil Rights Act of 1964, which prohibited discrimination in public accommodations based on race, color, religion, sex or national origin. It is a time to reflect on how far we’ve come and how far we still need to go. Yes, there are no longer blatantly posted signs reading “whites only;” yes, there is marginally better access to opportunity. Yet, fifty years later, discrimination has taken on a more invisible but still debilitating form.

Despite our progress, the fact remains that a disproportionate percentage of households of color are in poverty and an even higher percentage are in liquid asset poverty (approximately 60.6%). This means they are less likely to weather a financial storm, such as a job loss or other sudden financial emergencies, never mind being able to invest in their or their families’ future. Research also finds that households of color face barriers to financial security that many white households do not. These barriers have historic roots that we cannot overlook as we try to reverse these toxic trends.

New research from the National Council of La Raza (NCLR), the National Urban League (NUL) and the National Coalition for Asian Pacific American Community Development (CAPACD) reveals that households of color are missing out on key saving opportunities, leaving them further and further behind. The researchers conducted a survey with 5,000 individuals to learn how the financial market is currently serving communities of color, what these communities’ overall perceptions and attitudes toward banking and financial services are, and how technology is used in banking transactions. The majority of participants were of color, with 44% of participants of Hispanic origin, followed by Asian-American and Pacific Islanders (AAPI) (27%) and those of African heritage (22%).

Included in the report’s major findings:

  • Twenty percent of participants were unbanked and conducting their financial transactions outside the mainstream banking system. (Read more about the dangers of alternative financial services in CFED’s policy brief “Predatory Lending Takes Advantage of Financial Insecurity.”)
  • Despite an increase in mobile banking, people are still looking for local access and personal relationships from their banking. Customer service was the most significant factor when respondents were asked what they were looking for in banking.
  • Savings strategies were short-term and limited in their ability to ensure long-term wealth-building. Overall, less than one in six respondents saved through some form of employer-sponsored retirement account.

On top of barriers to accessing safe and affordable financial services, households of color must also face a mortgage lending industry that is not color-blind. Earlier this year, research from Zillow Inc., with contributions from NUL, found that there were significant differences across racial and ethnic groups in the success of mortgage applications. Specifically, an application from a black applicant is 2.4 times more likely to be denied compared to an application from a white applicant. This pattern contributes to the significantly lower homeownership rates for black families compared to white households (46% and 72%, respectively).

Many want to believe the injustice is over, yet we see over and over again how these factors compound and leave households of color with significantly lower amounts of wealth compared to white households. Specifically, the average African-American and Latino household still owns only six and seven cents, respectively, for every dollar in wealth held by the typical white family. At CFED, we know that income alone is not enough to succeed in the American economy. Having wealth and owning assets like a house or car can improve families’ lives by providing a stable place to live and reliable transportation to get to work. This extreme disparity in wealth has far-reaching consequences that lead to a state of overall financial instability for communities of color and a lack of economic mobility for their children.

The good news is that many politicians and organizations have made expanding economic opportunity their mission. Whether it is through investments in homeownership, college education or small businesses, racial and ethnic wealth disparities must be erased. We have a lot to celebrate on this anniversary, but as we move forward we know that we are no longer up against outspoken people or posted signs. We face a quieter, more insidious discrimination that is going to take initiatives from all sectors to send to the history books.

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