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Innovating to Meet Our Customers' Needs
Posted on 04/06/2011 @ 02:30 PM
Guest Blogger Tracy Fischman, Executive Director at AccountAbility Minnesota, described last week how asset-building opportunities can be integrated into free tax assistance. AccountAbility Minnesota has been a partner in this effort with CFED’s Self Employment Tax Initiative (SETI). Minnesota Senator Al Franken visited recently to learn about their work and speak with tax preparers and clients.
In today’s blog post, Tracy shares some of her organization’s newest innovations.
AccountAbility Minnesota serves as an incubator for new and innovative approaches to address asset building for low-income communities during tax time. We are willing to try new approaches, within scope, in determining what savings tools work for our customers. We know, through experience and data, that saving is key to economic mobility. Research shows that the unbanked are much more likely to open a bank account when they have money available.
We launched our financial services and products in 2006, when we began offering Express Refund Loans – a low-cost alternative to pricey Refund Anticipation Loans (RALs). We built in a savings component by coupling the loans with free savings accounts, available regardless of credit or banking history. In 2007, Financial Planning Association of Minnesota volunteers began to offer one-on-one financial counseling to our customers. In 2010, we introduced a benefits screening tool at some of our tax clinics to help customers identify public supports they may be eligible for.
Also, we aim stay on top of predatory products that low-income consumers are purchasing at tax time and offer low-cost, safe alternatives. With the help of our colleagues, we keep our finger on the pulse of our customers’ behavior and changes in the field. As our readers likely know, one such change is within the RAL market. Due to the IRS’ removal of the debt indicator, which we used as a tool to determine if a portion or all of a customers’ Federal refund will be garnished, we discontinued offering our Express Refund Loans this tax season. We are hopeful that predatory RALs will be eliminated, and given the bad publicity and possible court case related to RALs this year, perhaps this will be the case. Yet our collective work in finding ways to meet the needs of low-and moderate-income consumers is perhaps more critical now than ever.
This year, we are piloting the following services and products at our tax clinics. In doing so, we continue to learn what tools are helpful and what obstacles exist for our customers to start on, or move further along, the path of saving and asset building.
Senator Al Franken (D-MN) visits AccountAbility Minnesota
- Low-cost prepaid debit cards: Partnering with a local community bank we offer low-cost prepaid debit cards to our customers – regardless of their credit or banking history. Taxpayers who open a card at one of our tax clinics are able to upload their refund onto the card to receive it faster. We continue to offer savings accounts through this bank and other financial institutions, too.
- Saver’s Credit and retirement product pilot: We were one of two organizations nationally chosen to partner with the National Community Tax Coalition (NCTC) and Abt Associates to participate in a research pilot project designed to increase the use of the Saver’s Credit. The Saver’s Credit is a nonrefundable credit of up to $2,000 for taxpayers contributing to a retirement account. As a part of the study, we offer a retirement product at one of our tax clinics, and seek to understand whether or not eligibility for a tax credit can initiate retirement saving at tax time. We have also partnered with another large employer in Minnesota who is promoting free tax assistance, the Saver’s Credit and their own retirement product to their employees. Our customers are participating in a survey and focus groups around the credit as well.
- Benefits screening: With the recent recession, we’ve seen more individuals qualifying for our services for the first time, which means they may also qualify for public benefits for the first time. At three of our tax sites, we are piloting an opt-out screening during the intake process for customers, automatically offering to screen for public benefit they may be eligible for. We offer the services on an opt-in basis at four other tax sites.
More to learn about the savings behavior of our customers
Throughout the season we have seen changes in the demand for savings products. Our linkage to savings accounts – regardless of banking or credit history – is essential, but as a standalone product not sufficient to move people up the financial security ladder.
Following tax season we will reflect upon and analyze our results. It has been a tax season of learning that has left us with questions to be answered.
We also have new information about the savings experiences, behavior and interest of our customers through a comprehensive evaluation of our financial services program. This evaluation will be finalized in the coming months, and is designed to help us better understand how to meet the needs of our customers. The evaluation includes a quantitative review of data of nearly 1,000 of our customers who have opened savings accounts through our program since 2006, as well as a qualitative exploration of customer needs through focus groups and surveys. The final report will be available in May, and we will present the results at a number of local and national conferences and forums, including the NCTC conference in Chicago this June.
As we wrap up and reflect upon the tax season, we will take what we’ve learned in the tax clinics, through our evaluation, and from our colleagues in the field as we continue to innovate to meet our customers where they are on their path to saving and growing assets.
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