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CFED Featured in Seattle Times Op-Ed
By Sean Luechtefeld on 06/23/2011 @ 04:15 PM
EDITOR'S NOTE: This is a re-post of an op-ed that appeared in this morning's Seattle Times, co-authored by Sally Clark and CFED's Vice President for Policy and Research, Ida Rademacher. The piece explains how cities like Seattle and others across the country are working to push back against asset poverty. To read the article on the Times' website, click here.
THE recession has taken its toll on us all, but for those of us in dire, sometimes chronic financial distress, the effects are even more severe. The "jobless recovery" is no recovery for many. People fall into deep holes of debt and lack footholds to get stable, let alone out into the light. This cycle of debt not only hurts families, it jeopardizes the long-term economic health of the city and region.
Seattle and other U.S. cities recognize the financial health of our residents is key to whole-city success and we are taking steps to help people climb out of debt and daily struggle into true stability and progress. We are stretching the former boundaries of municipal government by using our staff and our facilities to build healthier individuals, families and communities through financial stability.
Currently, more than one in four Seattle residents lives in "asset poverty." These are our neighbors who don't have enough savings or other assets to meet basic needs for three months if they lose a job or primary source of income. Among Latino, African-American and Native American households, that number climbs to one in two.
People who are asset poor can't save to buy a home, make it to college or plan for retirement. They struggle to come up with the cash to respond to even minor emergencies, such as a broken-down car, and must rely on high-cost credit, including payday loans, which can push them deeper into financial distress. In this economy, they may need to rely on a food bank or emergency rent help from time to time.
With a more "upstream" approach we can help people build the skills and knowledge that lead out of asset poverty. Seattle is expanding the vision of what municipal governments can and should do to stabilize the financial lives of low-income residents. A city-community coalition of more than 50 organizations called the Seattle-King County Asset Building Collaborative has launched a set of programs to help low-income and working families avoid financial ruin and get on a pathway to self-sufficiency.
These programs have already helped change the lives of thousands of Seattle residents. For example, the Bank on Seattle-King County program provides alternatives to expensive check-cashing services and payday lenders. It effectively worked to create 54,000 new accounts opened for people who did not have bank accounts.
Similarly, thanks to United Way, the city and the collaborative partnered to provide free tax preparation, which helped more than 13,000 tax filers receive $19 million in refunds, including $6 million in Earned Income Tax Credits.
More needs to be done. The city's network of family centers should include financial-empowerment services in their mix of offerings for low-income residents. The city should explore programs that help families save, such as college savings accounts and incentivizing workers to save parts of their tax returns.
Together with San Francisco Treasurer Jose Cisneros and New York City's Consumer Affairs Commissioner Jonathan Mintz — co-chairs of Cities for Financial Empowerment — we will hold a forum Thursday to dig deeper for new ideas to take us further.
Much of the innovative work happening in Seattle was highlighted in a new report by the Corporation for Enterprise Development, Building Economic Security in America's Cities. The report describes in detail how municipal governments are uniquely positioned to promote financial empowerment through creative partnerships with community-based and private-sector organizations.
In Seattle, building financial security among struggling residents must be a central component of efforts to ensure long-term economic health for our city and a more promising future for thousands of families.
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