Asset-Building News Roundup - November 1, 2013
By Veronica Weis on 11/01/2013 @ 05:00 PM
Next week, join us for How the Federal Tax Code is Driving Inequity and What You Can Do About It on Thursday, November 7 from 2-3pm EST. This webinar is co-hosted by the Asset Funders Network, CFED, PolicyLink and others. To RSVP, please click here.
The New America Foundation is hosting an event this month, Jobs, Investment, and Rebuilding America, on Tuesday, November 12 in Washington, DC. This symposium will cover jobs, investment, and security - and why they should trump today's disastrous preoccupations with budget balance, spending cuts, sequestration, and the debt ceiling.
The Center for American Progress' Half in Ten initiative released their annual report on Monday. The report includes data from the Scorecard, a section that touches on asset limits (see pp. 93-94), describes trends in asset poverty (p. 107) and recommends lifting asset limits and curbing predatory lending (p. 97).
This week, Congressman Matt Cartwright (D-PA) and 17 Democrat and Republican cosponsors introduced the SAVINGS (Save Access to a Valuable Investment Needed to Generate Savings) Act. This legislation would protect the tax-time savings bond policy, the policy that allows tax filers receiving refunds of at least $50 to purchase a Series I Savings Bond directly on their tax form. For more on this important piece of legislation, check out Ezra Levin's take on the blog.
From the Assets & Opportunity Network
Wondering what's going on with the farm bill? Due to the recent federal government shutdown, the farm bill was placed on the backburner until now. Legislators will convene again tomorrow to discuss and write a final bill. The Southern Bancorp Community Partners have assembled some highlights of the 2013 legislation here.
Lessons From UNICEF on Halloween: How Small Donations Can Support Big College Dreams
By Andrea Levere on 10/31/2013 @ 10:00 AM
EDITOR'S NOTE: This article originally appeared on the Huffington Post and you can read it here.
My earliest experience with charity was collecting pennies and nickels in my orange UNICEF box on Halloween. Even as a child, I remember how important it felt to pick up my box at school. I relished watching those coins drop into the UNICEF box as much as I delighted in the candy filling my trick or treat bag. For me, Halloween became as much about helping a needy child in a distant country as counting my sugary Halloween bounty.
Today, as an adult who tries to count how much candy I don't eat, I spend a lot of time thinking about how we can leverage charity in the United States in more effective ways -- to not only provide help to the hungry and homeless but to set struggling children and families on a permanent path out of poverty. Unlike the faraway kids who benefited from UNICEF, these children reside in our own cities and towns, in neighborhoods where hopes and dreams are too often halted by the knowledge that opportunities available to children in high income families are not available to them.
In fact, from the time they are very young, many low-income children (and their parents) assume that the best ticket out of poverty -- a college education -- is prohibitively expensive and therefore not a realistic option.
Such thinking is all the more tragic because with very little effort, each of us has the power to change that scenario. New research shows that low-income students with just $500 or less in college savings are three times more likely to enroll in college and four times more likely to graduate than those without a savings account.
Of course, even saving a small amount is challenging for families who in a given month may have to choose between paying the heating bill and putting food on the table.
That's where we can help.
My organization recently developed an online platform called the 1:1 Fund that allows donors, large and small, to help low-income families save for college by matching their contributions in special children's savings accounts. During the past few years, a growing number of cities and states have launched programs that provide students with children's savings accounts, seeded typically with $50-$100 and earmarked specifically for college. Through the 1:1 Fund, donors help young students and their families grow those accounts with dollar for dollar matches.
The accounts give low-income families the confidence that post-secondary education is a real and attainable goal -- and the incentive to plan and save. Once they know college is possible, students are more likely to take the right courses and exams, win the best scholarships and learn about other forms of financial aid.
They are students like La Terra Cole, a former foster child who participated in a financial education and matched savings account program called the SEED Initiative and is now in her third year of law school at Catholic University in Washington, D.C. "The account gave me a new way to think about the future. I wouldn't have to be defined by poverty," said Cole. "We need to build in a culture of college expectation and then enroll kids in programs like the one I participated in. Less than 3 percent of kids in foster care go on to complete a college degree so we need programs on a larger scale."
Encouraging families to save can also significantly help decrease college debt. Currently, less than 10 percent of students from low-income families graduate from college by their mid-twenties, in large part because they lack the savings to help make up the difference between financial aid and the full cost of tuition. Again though, even a small amount of savings can pay big dividends. Studies show that just $23 a month in a children's savings account grows into $16,000 in savings by age 18, significantly decreasing the burden of college debt.
It is rare to be able to draw such a clear line between charitable dollars and genuine impact. So this Halloween, particularly as UNICEF boxes have become a less common sight, perhaps we should all make a commitment to contribute a few dollars a month to help send a child to college. After all, every child deserves a chance at a real future, but without our help many won't get there.
Empowering Low-income Families with the SAVINGS Act
By Melanie Kwon Duch, Guest Contributor on 10/30/2013 @ 01:00 PM
Today, Congressman Matt Cartwright (D-PA) and 17 Democrat and Republican cosponsors introduced the SAVINGS (Save Access to a Valuable Investment Needed to Generate Savings) Act. This legislation would protect the tax-time savings bond policy, the policy that allows tax filers receiving refunds of at least $50 to purchase a Series I Savings Bond directly on their tax form. This option has been available since the 2010 filing season, but is not guaranteed beyond the next one. The SAVINGS Act would protect it until 2018 while pushing the Treasury Department to come up with a more permanent tax-time savings bond solution, one that is in line with its goal of paperless bonds.
Savings bonds may seem quaint to some, but they are one of the best products available for small savers and investors. For them, bonds fill a conspicuous gap in the marketplace. There has been much discussion about how to curb the predatory financial products and services that target low-income and unbanked communities, but what has been largely absent from this discussion is the role that the lack of accessible savings products plays in people’s reliance on them. More than one in four American households is underserved by the traditional financial services industry—banks have been pulling out of low-income communities even as they expand in wealthier ones. Tax-time savings bonds do the invaluable work of bringing safe, competitive, accessible savings products to low- and moderate-income households. Importantly, they do this tax time, which, thanks to refundable tax credits like the EITC, is one of the most “savable” moments of the year. For many low-income families, a tax return can comprise as much as 15% of their annual income.
The tax-time savings bond policy grew out of pilot tests that began in 2007 and has proved successful in the four years it has been offered nationally. More than 100,000 tax filers have purchased U.S. Savings Bonds through the policy since it began, setting aside more than $60 million dollars for themselves and their loved ones. Although it is open to all tax filers who receive a refund, the majority of bond purchasers have adjusted gross incomes below the national median and nearly one in three is an EITC-recipient. Furthermore, about 25% of bond buyers buy again the following year, evidence of a growing savings habit.
Saving is hard. We need to find ways to make it easier to save, not eliminate them. The tax-time savings bond policy is a much-needed solution, one that leverages the existing assets and infrastructure of the U.S. Savings Bond Program. It compliments existing federal asset building programs and policies, the majority of which focus on the tax code. There are few good options for low- and moderate income Americans who want to invest in their futures. The SAVINGS Act preserves one of them and takes the important first step towards making tax-time savings bonds a permanent option for all Americans.
Melanie Kwon Duch is an Innovation Strategist at the Doorways to Dreams Fund.
Bipartisan Legislation Supports Innovative Strategies to Help Working Families Save
By Ezra Levin on 10/29/2013 @ 03:00 PM
Yesterday, Senator Jerry Moran (R-KS) was joined by Senator Sherrod Brown (D-OH) to introduce the American Savings Promotion Act (see Sen. Moran’s press release here). Representative Derek Kilmer (D-WA), joined by Representatives Tsongas (D-MA) and Cotton (R-AR), led the way in the House of Representatives with a companion bill introduced today as well (see Rep. Kilmer’s press release here). This commonsense legislation will encourage the growth of Prize Linked Savings (PLS) accounts, which have already succeeded in increasing the financial capability of working families in many states and have the potential to spread throughout the country.
“Prize-linked savings” is the brainchild of former Harvard Business School professor and now Dean of Oxford University’s business school Peter Tufano. Doorways to Dreams (D2D) has worked the last several years testing the theory on the ground by partnering with local credit unions to run “Save to Win” programs in four states. These programs allow savers to open a 12-month “Save to Win share certificate” (essentially a certificate of deposit). For each $25 deposit, savers are entered into both a monthly drawing for small cash prizes and an annual drawing for a grand prize of $10,000 or more.
For savers the math is simple: they get a chance to take home cash prizes while saving for the future—it’s a win-win. D2D research has found that these prizes encourage healthy savings behavior, and the results are impressive. In less than five years since its inception, the number of participating credit unions has grown from eight in Michigan to more than sixty in four states. In just two of the states where Save to Win operates—Michigan and Nebraska—42,000 people have opened accounts and saved $72 million.
Many of these accounts are opened by families who have never had significant savings before. This includes former non-savers, families who are asset poor, and families who are low- and moderate income. In short, without a dime of government subsidy, Prize Linked Savings accounts are helping families enter the financial mainstream and attain financial security. What a deal!
Unfortunately, federal law prohibits banks from offering Prize Linked Savings products, which is why only credit unions in some states have participated so far. This is where the American Savings Promotion Act comes in. This legislation would remove the regulation banning banks from the Prize Linked Savings field, allowing these savings products to spread further and faster throughout the country. It’s no wonder why this legislation has attracted support from a wide range of groups and an ideologically diverse group of Senators and Representatives—it just makes sense.
Redesigning the 1:1 Fund Website
By Kristin Lawton on 10/29/2013 @ 11:16 AM
Last week, CFED launched a new website for the 1:1 Fund - our social venture that matches kid's college dream dollar-for-dolla. Here is the inside scoop on the process of redesigning the website. (Note: Click on the image to see the full size; click again to enlarge the image.)
Building Assets Part of American Dream
By Bob Annibale and Noel Poyo on 10/28/2013 @ 04:30 PM
EDITOR'S NOTE: This op-ed originally appeared in the San Antonio Express News and can be read here.
A genuine opportunity to achieve upward economic mobility is central to the American dream that Martin Luther King Jr. envisioned at the March on Washington. This is fundamentally the same goal that has long beckoned hard-working immigrants to the United States and drives families to work long hours and multiple jobs. Upward mobility is about more than simply getting a job — it is about building assets through activities such as purchasing a home, starting a business, or attaining a college degree.
Growing assets begins with basic building blocks — starting with access to financial information and education, a savings account and a good credit history built through responsible use of credit.
Savings provide a financial cushion against unexpected emergencies like medical bills or car repair costs. In the long term, saving can increase the likelihood of buying a home, starting a business or going to college. For instance, children with college savings accounts in their own names are seven times more likely to go to college than children who do not have an account. For the 1 in 10 Texan households, and 30 percent of all households in the U.S., that don't have savings accounts, savings are an asset worth building.
Responsible credit opens the door to lower costs, wider choices and greater financial freedom. But for those with poor credit, many can expect to pay up to $250,000 more in interest payments than those with good credit over the course of a lifetime. For the 65 percent of Texans with subprime credit, improving their credit score can reduce the cost of borrowing and would be another valuable asset.
Savings and good credit allow families to be more financially resilient and build long-term wealth. A recent report by the Corporation for Enterprise Development, or CFED, found that many households in Texas, especially households of color, are extremely financially vulnerable because of their limited savings and credit. CFED found that over a quarter of all households in Texas are living in asset poverty — meaning that they lack sufficient available net worth or savings to subsist at even the poverty level for three months in the absence of income. The report also shows that the asset poverty rate among households of color is twice that of white households. CFED has ranked Texas 39th in the nation for household financial security. In response, cities such as San Antonio and Dallas are developing innovative programs aimed at restoring household financial security for all residents.
In 2010, CFED did a similar analysis of San Antonio and found that 34 percent of the city's households lived in asset poverty. Mayor Julián Castro's commitment to growing savings is resulting in a lasting infrastructure that will bolster household financial security and ensure more households, especially in low-income communities of color, are able to reach more of their financial goals. San Antonio's participation in the Cities for Financial Empowerment Coalition ensures that the city contributes and benefits from cutting-edge approaches to asset building. A recent example of this was the opening of two financial empowerment centers in east and west San Antonio earlier this year, replicating New York City's model for providing free financial counseling to low-income residents.
Today, the Growing Assets: Closing the Wealth Gap Regional Convening will take place in San Antonio. Organized by the Asset Building Policy Network, a coalition of the nation's leading civil rights and asset-building organizations and Citi, the convening will gather national asset-building experts and civic and community leaders from across Texas to exchange ideas and develop the solutions to Texas' asset-building challenges.
Asset-Building News Roundup - October 25, 2013
By Veronica Weis on 10/25/2013 @ 01:00 PM
On November 7, the emerging Connecticut Asset Building Collaborative will publicly launch at an event in New Haven featuring New York City Commissioner of Consumer Affairs, Jonathan Mintz.
The Consumer Federation of America will host its Financial Services Conference December 5-6 in Washington, DC.
The 1:1 Fund has launched an awesome new website that makes matching kids' college dreams dollar for dollar even easier. Check it out and donate $25 today.
The Asset Building Policy Network (ABPN) – a coalition of the nation's leading civil rights and asset-building organizations and Citi – hosted its second Growing Assets: Closing the Wealth Gap Regional Convening in San Antonio, Texas this week. Don't miss this blog post for key highlights and a video from Mayor Castro.
Thanks to a $500,000 grant from the JPMorgan Chase Foundation we'll be able to strengthen the capacity of state and local nonprofits to ensure greater access to products, programs and policies that expand financial asset-building opportunities for low-to moderate-income consumers. Click here for more information.
From the Assets & Opportunity Network
The Midas Collaborative shared a blog post on applying "financial coaching" to scale.
The Inclusive Economy Editor is Getting Hitched!
A hearty congratulations to the Editor of this blog, Sean, who is getting married this weekend! We are so excited for your wedding and we couldn't be happier to share in your joy.
Growing Assets: Closing the Wealth Gap Regional Convening in San Antonio, Texas
By Jeremie Greer and Emanuel Nieves on 10/24/2013 @ 04:00 PM
Today, the Asset Building Policy Network (ABPN) – a coalition of the nation's leading civil rights and asset-building organizations and Citi – hosted its second Growing Assets: Closing the Wealth Gap Regional Convening in San Antonio, Texas. The convening, which gathered 60 people representing more than 50 organizations across 11 states is part of a collective strategy to build the capacity of ABPN Network members and their affiliates through the sharing and learning of best practices.
Highlights from the convening so far have included a welcome from Mayor Castro (video below), opening remarks by Texas Senator Leticia Van de Putte that set the stage and context for the convening and a conversation with local councilmembers Ivy Taylor and Diego Bernal.
The convening has also offered participants a host of breakout sessions that dived deeper into both the policy and practice side of asset building. The panels have focused on various topics ranging from how the African American, Latino and Asian-Pacific Islander communities are faring in the economic recovery, to a discussion on the state of inequity in Texas by race and geography, to a conversation on what the federal policies are that can help to close the racial wealth gap and a panel focused on what local organizations are doing to ensure Texas communities are financially empowered through the use of alternative financial products and services.
CFED Expands Programs to Improve Asset-Building Opportunities for Low- and Moderate-Income Households
By Kristin Lawton on 10/24/2013 @ 10:00 AM
$500,000 grant from The JPMorgan Chase Foundation to support and strengthen local asset-building opportunities
CFED is excited to announce today that it will deploy $500,000 to strengthen the capacity of state and local nonprofits to ensure greater access to products, programs and policies that expand financial asset-building opportunities for low-to moderate-income consumers. The expansion is made possible by the JPMorgan Chase Foundation, and is part of the firm’s broader efforts to provide $1.4 million in grants to leading nonprofits that promote the financial capability of consumers.
“Our goal at CFED is to develop and support programs that empower low- and moderate-income households. This generous grant from JPMorgan Chase will help us continue to work to achieve this goal,” said, Jennifer Brooks, Director of the Assets & Opportunity Network, CFED.
“Strengthening the pipeline of high-capacity organizations is critical to providing asset-building services to underserved communities. We are proud to support CFED’s efforts to share innovative financial capability strategies, build partnerships and support asset-building nonprofits to enhance their impact,” said Janis Bowdler, Managing Director, Financial Capability and Affordable Housing, JPMorgan Chase Foundation.
The JPMorgan Chase Foundation grant will support the following 2014 CFED activities:
- One-year pilot of the Capacity Building Initiative, a program designed to provide customized technical assistance to local and state asset-building leaders.
- Development and deployment of resources that help Assets & Opportunity Network members connect to, and learn from, peers and experts.
- Expansion of the Assets & Opportunity Network by recruiting and supporting nonprofits to deliver asset-building services and lead effective assets coalitions.
- 2013 Assets & Opportunity Network Leadership Convening, a national conference in Washington, D.C. The goal of the conference is to set the priorities for the CFED Network for the coming year, build relationships with peers and funders, and educate policymakers about financial access and inclusion issues.
JPMorgan Chase & Co. (NYSE: JPM) is a leading global financial services firm with assets of $2.5 trillion and operations worldwide. The Firm is a leader in investment banking, financial services for consumers and small businesses, commercial banking, financial transaction processing, asset management and private equity. A component of the Dow Jones Industrial Average, JPMorgan Chase & Co. serves millions of consumers in the United States and many of the world's most prominent corporate, institutional and government clients under its J.P. Morgan and Chase brands. Information about JPMorgan Chase & Co. is available at www.jpmorganchase.com.
Check Out the New and Improved 1:1 Fund Website
By Carl Rist on 10/23/2013 @ 09:00 AM
We are very excited to announce the launch of our new website for the 1:1 Fund and invite you to take a look! The 1:1 Fund is a CFED platform that supports the college dreams of low-income children by ensuring that those dreams are matched with savings in the bank. The 1:1 Fund has learned a lot in our first year and we’re striving to create a more interactive, easy to share and exciting platform to match kids’ college dreams dollar for dollar.
Visit the new website to:
- Get the latest updates, read savers stories and donate to a program in your area all from our dynamic program pages.
- Learn about the impact of child savings programs.
- Stay current on what's happening at 1:1 Fund and in the world of children's savings accounts on our blog.
The 1:1 Fund team hopes you enjoy our new website and visit often to see how our child savings programs are doing! Also, if you have any feedback or comments on the new website, our team would love to hear from you.
Webinar: How the Federal Tax Code is Driving Inequity and What You Can Do About It
By Veronica Weis on 10/22/2013 @ 04:00 PM
Thursday, November 7 | 2 - 3 pm EST
The primary purpose of the U.S. tax system is to generate public revenue, but it also serves as a vehicle to advance public policy goals. For example, the tax code includes provisions that incentivize taxpayers to take certain action – like buying a home, or saving for higher education or retirement – by providing them with tax credits, deductions, exclusions, and preferential rates. These tax benefits, known collectively as “tax expenditures,” reduce government revenues, disproportionately benefit wealthier households, and provide limited benefits for low- and moderate-income families and households of color.
Deliberations about reforming the federal tax code – including discussions about the cost and benefits of various tax expenditures – are underway in Congress. These discussions provide a unique window of opportunity for advocates to call for a more inclusive, progressive, and equitable tax code – one that provides fair benefits to all U.S. households.
Please join the Asset Funders Network, CFED, PolicyLink and our co-hosts (listed below) for this upcoming webinar about why tax reform matters and opportunities for change. This webinar is intended to prepare practitioners and advocates for critical windows of opportunity to engage in tax reform debates and advocate for policies that enable low- and moderate-income families to access a greater share of the benefits.
- Heather McCulloch, Manager, Asset Funders Network/Tax Policy Project (moderator)
- Jeremie Greer, Director of Government Affairs, CFED
- Solana Rice, Associate Director, PolicyLink
- Eugene Steuerle, Co-founder, Urban-Brookings Tax Policy Center
This webinar is free, but advanced registration is required. Click here to register.
Webinar Co-hosts: CFED, The Center for Global Policy Solutions, Center for Social Development, ColorOfChange, The Greenlining Institute, Insight Center for Community Economic Development, Institute on Assets and Social Policy, Institute for Women’s Policy Research, National Coalition for Asian Pacific American Community Development, National Urban League, National Council of La Raza, New America Foundation, Oklahoma Native Assets Coalition, PICO National Network, and the UCLA Asian American Studies Center.
SF Savers: College is Part of “How to Have a Fun Life” for Barry and His Son Jaray
By Claire Sorrenson, 1:1 Fund on 10/21/2013 @ 01:30 PM
EDITOR'S NOTE: This story originally appeared on the 1:1 Fund blog, which you can read here.
Jaray Perkins, an energetic kindergartener at Sherman Elementary School, loves riding his bike and doing sports as diverse as martial arts and rock climbing. When it comes to school, “you have to drag him away,” according to father Barry Perkins.
The landscape of education has changed a lot since Barry’s youth. “College is way more expensive than when I went.” In fact, Barry calculates that his son’s preschool cost more per semester than his college undergraduate degree. But, says Barry, “I believe in planning” now for Jaray’s future education.
Barry highlights the importance of setting early expectations for his son. “We talk about your choices as an adult and how you can have a fun life.” A fun life means having the freedom to make choices, which means having a job that allows you that freedom. Says Barry, “we talk about how you have more options” with a college degree. Barry definitely sees college in Jaray’s future. For Barry, it goes beyond surviving in today’s economy: “college is a good place to figure out what you do and don’t like.”
Asset-Building News Roundup - October 18, 2013
By Veronica Weis on 10/18/2013 @ 03:00 PM
A&O Network Lead Organizations, Illinois Asset Building Group and Hawai’i Alliance for Community-Based Economic Development, will be presenting during a webinar hosted by the Shriver Center, Encouraging Savings: How Hawaii and Illinois Eliminated their TANF Asset Tests, on October 22.
On November 7, the emerging Connecticut Asset Building Collaborative will publicly launch at an event in New Haven featuring New York City Commissioner of Consumer Affairs, Jonathan Mintz.
The Consumer Federation of America will host its Financial Services Conference December 5-6 in Washington, DC.
Enforcing Small Dollar Lending Protections: Arkansas Attorney General McDaniel filed a lawsuit against three companies offering payday loans online, a practice that is prohibited in Arkansas. One organization, Western Sky Financial, claims to be a tribal entity exempt from the law. Separately, an Iowa administrative court ruled that online payday loans made by tribal lenders are subject to the state's payday lending law. Read more here.
Consumer Protection: The federal Consumer Financial Protection Bureau (CFPB) reiterated that employers cannot require employees receive pay on a payroll card of the employer’s choosing. The CFPB also articulated payroll card regulations, including the requirement for financial institutions to disclose all fees associated with the cards.
The CFPB conducted field hearings in Itta Bena, Mississippi, and Chicago, Illinois. In Mississippi, CFPB Director Cordray and staff heard from consumers about the effects of predatory lending in the region. In Illinois, the CFPB shared results of a report on the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) and heard from consumers about the use of credit products in the community.
From the Assets & Opportunity Network
Think there's nothing going on in Washington? Even after the The House continues to push for drastic cuts to the food assistance program, SNAP. Continued pressure from you can maintain states' right to waive asset tests! Last week, the House named conferees for a House-Senate committee that will reconcile differences between versions of the Farm Bill. The main sticking point will likely be funding for SNAP. Where the Senate bill cuts $4 billion over 10 years and retains state flexibility to waive asset tests, the House bill cuts nearly $40 billion, achieved largely by eliminating "broad-based categorical eligibility"—the mechanism states use to waive the SNAP asset test. If enacted, the House version would force more than 40 states—probably including yours—to reinstate low federal asset limits and would deny SNAP to 4-6 million low-income people.
The YWCA of Metropolitan Dallas reports that although women have regained more jobs than men since the end of the Great Recession, most of those are in low-paying jobs such as waitresses and housekeeping, according to a recent study.
In Photos: Opportunity Finance Network Conference & Native CDFI Gathering
By Kim Pate on 10/18/2013 @ 11:00 AM
All week, I've had the pleasure of attending the 2013 Opportunity Finance Network (OFN) Conference here in Philly. It's been an incredible experience, and it's been great to see old friends and meet new ones from across the country.
While I'm still taking it all in, I wanted to share a few photos. This first one is the outgoing Board of the Native CDFI Network, whose mission is to be the national voice and advocate for creating access to resources for Native people. Right after this photo was taken, we elected new Board members for the upcoming year.
Here's another shot of some of the board members, this time signing the Native CDFI Network Articles of Incorporation.
Tanya Fiddler, Chair of the Board of the Native CDFI Network, opened the meeting. Tanya also sits on CFED's board, and has been a longtime friend to CFED and to me.
If you ever get the chance to head to OFN, do it. It's a great conference with a really diverse program, making it ideal even for those who don't work directly with CDFIs.
Did you attend OFN or the Native CDFI Network gathering? Share your thoughts with us below!
New National Effort to Help Unbanked and Underbanked Adults: Bank On 2.0
By Jonathan Mintz, Guest Contributor on 10/16/2013 @ 01:30 PM
More than one in ten adults in America are disconnected from the mainstream banking system and pay out extra dollars for costly and unproductive fringe products and services as they struggle with their monthly finances. This startling truth– and the wasted energy and dollars spent compensating for this disconnect—has long posed a critical policy challenge for public and private dollars aimed at helping working adults achieve financial stability and growth. For decades, nonprofit leaders, national advocates, and more recently local governments have attempted numerous efforts, including through innovative outreach and financial institution partnerships, to forge more productive mainstream connections. In response to this crisis and all that has been learned from these assorted efforts, the JPMorgan Chase Foundation and the Cities for Financial Empowerment Fund (CFE Fund) have announced the start of a nation-wide approach to linking safe and affordable products and services from banks and credit unions across the country with local government delivery streams of programs and services.
The national program, Bank On 2.0, will build upon the success of the multi-city Bank On movement and other local banking access initiatives, leveraging the experience and expertise of movement leaders (including San Francisco’s Office of Financial Empowerment, the City of Seattle, CFED, National League of Cities, and so many others), bank and credit union partnerships, and federal regulators. Bank On 2.0 will create a unified, national approach to identifying both appropriate products and services as well as effective municipal delivery strategies to help reach millions of people in need across the country.
The Bank On 2.0 initiative is critical to advancing the mission of the CFE Fund, which is to help cities improve the finances of low-income residents by embedding financial empowerment strategies into municipal programs. Successful financial empowerment programs not only help those in need with their finances, but also deliver a “Supervitamin Effect” to host programs in cities, powerfully improving social service program outcomes.
As one example of this approach, New York City experimented with inserting a safe bank account into payment streams of its Summer Youth Employment Program, which provides New Yorkers between 14 and 24 with paid employment for up to seven weeks in July and August. Program registration of these young adults, so many of whom lacked a bank account, was an ideal opportunity both to leverage particularly safe and appropriate accounts and consumer uptake.
As planning begins for this exciting multi-year Bank On 2.0 national initiative, we will be inviting mayors, banking organizations, federal regulators, philanthropic partners, and regional and national associations to join us to develop and test the most effective national approach for connecting the under-banked to safe, affordable mainstream banking services. The CFE Fund will soon release funding opportunities for promising municipal pilots, as well.
For more information and to stay connected to the CFE Fund’s Bank On 2.0 initiative, email us at firstname.lastname@example.org. Check out our website at www.CFEfund.org for updates on all our CFE Fund programs, current job opportunities, and to sign up for our mailing list to receive “The Supervitamin Quarterly” e-newsletter.
Jonathan Mintz is Commissioner of the New York City Department of Consumer Affairs and President of the CFE Fund.
The 1:1 Fund Expands to New York
By Carl Rist on 10/14/2013 @ 01:30 PM
The 1:1 Fund team was honored to attend an energizing event on October 1 at the Children’s Aid College Prep Charter School in the Bronx that marked our first expansion beyond the 1:1 Fund’s initial two pilot sites (San Francisco Bay Area and Mississippi). With kindergarteners, their parents and a special guest appearance by NFL star, Justin Tuck, and his wife, Lauran, we celebrated the launch of the College Savers Program.
This new and innovative children’s savings program, developed in partnership with Citibank, ideas42 and CFED, and with initial support from Justin and Lauren Tuck’s R.U.S.H. for Literacy, will initially work with 170 children, including 1st and 2nd graders in CAS’s College Prep Charter School and youth participating in CAS’s African American Male Initiative. By the launch, 135 families (or 79%) had already signed up. All participants will receive a Citibank savings account with a $100 initial gift, along with a dollar for dollar match up to the first $100 in savings, a $50 incentive for parents that enroll in automatic bill-pay to contribute to the account and eligibility for raffle prizes by making deposits.
The most exciting part about the launch was the announcement by the Tucks of their $100,000 investment in the College Savers Program (via the 1:1 Fund) and their conversation with parents about their own experiences and their hopes for all of the children in the program. Justin Tuck noted that he and his wife are both fortunate to be Notre Dame graduates and that they want participants “to have the same opportunity we had.”
Since studies show that low-income students with just $500 in a college savings account are three times more likely to enroll in college and four times more likely to graduate, starting to save during the school years is a big step in seizing that opportunity. And it’s also about creating a vision for the future. As Justin Tuck noted in his final remarks at the event: “I believe in you guys and hope you believe in yourselves. I’m your fan, too!”
To see more photos from the event, check out the slideshow below.
What Music Reminds You of Asset Building?
By Veronica Weis on 10/11/2013 @ 05:30 PM
This week, we asked our Twitter followers and Facebook audience to share music that reminds them of their work in the asset-building field. The suggestions that came in were creative, inspiring and downright hilarious. For your viewing amusement, we've put together a video playlist on Youtube and a longer version for Spotify users.
A big thank you to all of those music lovers who entertained us with their answers! I've included some highlights from social media below:
We're thinking "She works hard for the money" by Donna Summer would work.— CRHDC (@CRHDC) October 7, 2013
@CFEDNews Money by Pink Floyd— David Rothstein (@dbrothstein) October 7, 2013
@CFEDNews For the love of Money.. The O'Jays— ET Winzer (@ETWinzer) October 7, 2013
Don't miss the Facebook post that got the most responses:
Have a song (or two) that we might've missed? It's not too late! Submit it in the comments below and I'll add it to the Youtube and Spotify playlists.
Asset-Building News Roundup - October 11, 2013
By Veronica Weis on 10/11/2013 @ 11:00 AM
Next week, the Southern Regional Asset Building Coalition Conference is taking place in Jacksonville, FL from Tuesday through Thursday.
On October 15-18, the Opportunity Finance Network Annual Conference is taking place in Philadelphia, PA. CDFI staff, funders, policymakers and investors from around the country will celebrate transformational work, learn from each other and tap into the spirit of Philadelphia.
The big news out of Washington this week and last has centered around the government shutdown and debt ceiling impasse. One perspective near and dear to CFED's policy issues is how the shutdown is affecting the nation's poor. The New Yorker shared a heartbreaking piece which outlines the programs most hurting. These include Head Start, Temporary Assistance for Needy Families (TANF), Meals on Wheels and the Special Supplemental Nutrition Program for Women, Infants, and Children, known as WIC.
In that vein, our friends at the Center for American Progress shared a revealing post highlighting the impact of the government shutdown on people of color.
The Mission Asset Fund was profiled in Marketplace this week for its efforts to improve the credit scores of low-income borrowers, a critical step toward economic mobility.
From the Assets & Opportunity Network
This past Friday, Catalyst Miami partnered with Florida Blue Foundation to host "Affordable Care: How to Get It and How to Share It." Want to see some of the highlights? Click here.
Michigan's Save to Win Program Demonstrates Successful Way to Encourage Savings
By Kori Hattemer on 10/10/2013 @ 12:00 PM
In 2009, the Doorways to Dreams (D2D) Fund partnered with eight Michigan credit unions to launch Save to Win ™ (STW), the first large-scale prize-linked savings product in the nation. Accountholders who save using the special balance building 12-month certificates of deposit (CDs) are entered into raffles for cash prizes with each deposit of $25 or more. Four years later, 58 credit unions in Michigan now participate in the program and 40,000 unique accountholders across the state have saved $72.2 million from 2009-2012.
D2D has been tracking the program in Michigan since its inception and recently published highlights from 2012, which emphasize the importance of developing innovative ways to encourage financially vulnerable households to save. Highlights from Year 4 of the program include:
- Accountholders appear to be developing long-term savings habits. Each year, accountholders are given the option to reopen or "rollover" their accounts, and a high percentage of accountholders rolled their accounts over from 2011 to 2012. Ninety-one percent of the accountholders who enrolled in 2009 and were still enrolled in 2011 once again rolled their accounts over in 2012. A high percentage of accountholders who signed up in 2010 (83%) and 2011 (77%) also rolled their accounts over from 2011 to 2012.
- Accountholders used their savings for a variety of purposes. While many accountholders rolled their accounts over in 2012, accountholders also used their savings to meet short-term needs. Account balances decreased in May and September, so accountholders may have used the funds to pay for summer child care or back to school costs. D2D also found that there is a cyclical dip in account balances during the rollover period each year, which may indicate that accountholders are making planned withdrawals between account years.
- STW continues to positively impact financially vulnerable accountholders. D2D defines financially vulnerable individuals as those who are single parents, asset poor, non-savers, or low-to-moderate income. In 2012, these accountholders had nearly identical rollover rates as their non-financially vulnerable counterparts, demonstrating the importance of STW in helping financially vulnerable individuals save.
As other organizations and financial institutions look for ways to empower financially vulnerable individuals to save, STW provides an innovative model for designing a savings product that is engaging and encourages savings habits. The success of STW in Michigan has motivated other states to launch similar programs, and D2D continues to advance prize-linked savings products as a strategy for helping low- and moderate-income individuals save.
To read more about the success of the STW program in Michigan in D2D's recent report, click here.
To learn more about D2D's pioneering prize-linked savings work, click here.
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