Small Changes, Real Impact: Applying Behavioral Economics in Asset-Building Programs
By Sean Luechtefeld on 12/04/2013 @ 04:45 PM
Tuesday, December 17, 2013 | 3 - 4 pm EST
Last year, the BETA Project was launched to improve the effectiveness of products and services designed to help people bolster their financial security. In the 12 months since, we’ve worked closely with three organizations to understand a problem in their program, design solutions and test them.
On December 17, join CFED, ideas42 and the Citi Foundation as we discuss findings from this year-long project. During the webinar, speakers will report on the research conducted at BETA Project partner sites, explore the implications of applying insights from behavioral economics to asset-building program design and provide helpful tips on how to incorporate the behavioral perspective into your organization. More information on the project is available here.
- Daria Sheehan, Citi Foundation
- Katy Davis, ideas42
- Matthew Darling, ideas42
- Pamela Chan, CFED
Advanced registration is required for the event and space is limited. Click here to sign up.
If you have any questions, please don’t hesitate to contact Pamela Chan, Senior Research Manager, at email@example.com.
Recap: Big Ideas for Job Creation
By Sean Luechtefeld on 12/02/2013 @ 04:45 PM
EDITOR'S NOTE: Last Monday, the Aspen Institute hosted "Big Ideas for Job Creation," an event at which CFED's Ida Rademacher was a featured speaker. In case you missed it, Aspen sent along this recap of the event. If you were there, use the comments below to share your takeaways!
Aspen Institute: Microenterprise and Job Creation
Just in time for Small Business Saturday, the Economic Opportunities Program hosted an event at the Aspen Institute's headquarters highlighting the role that microbusiness plays in creating jobs, and identifying policies to further catalyze the growth and expansion of these small firms. Don Graves, Deputy Assistant Secretary for Small Business, Housing and Community Development, U.S. Department of the Treasury; and Executive Director of the President's Council on Jobs and Competitiveness, set the stage for the event with his opening remarks. Joyce Klein, the Director of EOP's FIELD program, then facilitated a conversation among Elaine Edgcomb (FIELD), Beth Kregor (Institute for Justice Entrepreneurship Clinic), Ida Rademacher (CFED), Connie Evans (Association for Enterprise Opportunity), and Christy McFarland (National League of Cities).
Key highlights from the event include:
- Microbusinesses are responsible for an estimated 41 million jobs in the U.S., including direct, indirect, and induced employment effects.
- Both our federal tax code and local business licensing requirements inhibit many microbusinesses from formalizing and growing.
- There are opportunities to better leverage existing policies--including the Community Development Block Grant program, state Capital Access Programs, and the Workforce Investment Act--to support microbusiness formation and growth.
As panelist Connie Evans noted, "Part of the policy challenge lies in data that helps policy makers to understand the role that microbusinesses play in our economy. They need to understand the labor market and economic trends of the 21st century, and realize that microbusinesses are and will increasingly be a key source of employment."
The event was funded by the Annie E. Casey Foundation as part of its Big Ideas for Job Creation initiative. The event was covered live by CSPAN, and live-streamed on www.aspeninstitute.org. To view a recorded version of the event, visit the Aspen Institute's web site. Copies of the research papers that formed the core of the discussion can be downloaded at www.bigideasforjobs.org/the-ideas.
More Organizations are Adding Financial Capability Services to Workforce Development Programs
By Kori Hattemer on 11/21/2013 @ 03:00 PM
An increasing number of workforce development organizations ranging from community colleges to one-stop employment centers are adjusting their models to include asset-building services, including financial education, credit counseling and access to public benefits. As a testament to this growing interest in integration, over 500 workforce development practitioners, researchers, funders and national intermediaries met in Detroit on November 7-8 to mark the official launch of the Working Families Success Network (WFSN) with an inaugural conference. The 1½-day-long event was packed full of thought-provoking speakers and innovative ideas from experts in the field. Here are a few of my takeaways from these insightful leaders:
- Organizations that have successfully added asset-building services have done so by incorporating it fully into their mission and the way they do business. Financial capability services are not just one-off services provided in a silo; they are incorporated into multiple aspects of an organization and alongside a number of other services. Organizations need infrastructure and support to reach this level of integration, which Central New Mexico Community College President, Ann Lyn Hall, emphasized during one of the workshops.
- Employers are a critical partner in building financial capability in a workforce development setting. In one breakout session, representatives from the National Human Services Assembly, The SOURCE, Goodwill Industries of Greater Grand Rapids and United Way of Chittenden County spoke about projects in which they engaged employers to provide financial education and access to public benefits to their workers. These projects not only gave employees the tools they needed to better manage their finances, they also helped CEOs and HR managers understand the daily financial struggles their low-wage employees face. Also, employees reported feeling more engaged with and valued by their employer, which is another benefit for employers and an additional reason for them to partner in this work.
- Establishing good credit is an important asset-building strategy. Organizations shared that many of their clients come in with negative or no credit histories, which can reduce their employment opportunities and cost them hundreds or thousands of dollars due to higher interest rates. Teaching clients to understand how to use credit effectively and helping them repair inaccuracies or negative marks on their credit reports is an important part of helping them secure stable employment and financial security.
The lead organizations involved with developing the WFSN include Achieving the Dream, Annie E. Casey Foundation, United Way Worldwide, Local Initiatives Support Corporation (LISC), Bank of America, W. K. Kellogg Foundation, MDC and The Kresge Foundation. I look forward to learning more about how this network of leaders will continue supporting and partnering with organizations to find innovative strategies to help working families succeed.
Big Ideas for Jobs Event: Entrepreneurship as a Job Creation Strategy
By Katherine Lucas McKay on 11/18/2013 @ 09:45 AM
Next week, CFED’s Chief Program Officer, Ida Rademacher, will join leaders in the microbusiness field at an event highlighting opportunities for policymakers at the federal, state and local levels to support entrepreneurship as a job creation strategy. The event, hosted by FIELD at the Aspen Institute, will feature contributors to the Big Ideas for Jobs initiative, a project that highlights practical, sustainable and scalable strategies for creating career-oriented jobs that are accessible for low-skilled workers.
CFED’s contributed a paper to the Big Ideas for Jobs initiative in 2011, highlighting opportunities to leverage the tax code to spur self-employment. At this event, we will offer a preview of our forthcoming proposal, which is updated to reflect recent policy developments and new research on the challenges that low- and moderate-income entrepreneurs face today.
Rademacher will be joined by presenters Elaine Edgcomb, Strategic Adviser to FIELD, and Elizabeth Kregor, Director of the Institute for Justice Clinic on Entrepreneurship at the University of Chicago. Additional microbusiness experts will join a roundtable discussion moderated by Joyce Klein, Director of FIELD. Discussion will focus on the role that microbusinesses play in creating jobs for LMI business owners and workers, describe progress that has been made toward achieving the Big Ideas for Jobs proposals on entrepreneurship, identify what policymakers and advocates can do next.
The event will take place at the Aspen Institute’s Washington, DC, offices on November 25 at noon EST. Please join us!
RSVP here to attend Big Ideas for Jobs: Entrepreneurship as Job Creation Strategy.
Financial Products for Immigrants & Communities of Color
By Emanuel Nieves on 11/14/2013 @ 10:30 AM
Last week, the Association for Public Policy Analysis & Management (APPAM) hosted its annual Fall Research Conference in Washington, DC. For the past four years, APPAM has included a number of panels, roundtables and other sessions that highlight new asset-based research, all of which have played a role in informing the work of the asset-building field. Organized and promoted by the Building Wealth over a Lifetime Working Group, this year’s APPAM conference included fourteen such sessions, one of which was a session I attended on Saturday titled Access to Financial Products and Services for Immigrants & Communities of Color.
The session featured both private and public sector panelists, including Sandy Fernandez of Citi Community Development, Jeffrey Cruz of the Office of Senator Elizabeth A. Warren, Lindsay Daniels of National Council of La Raza, Kathryn Glynn-Broderick of the New York City Office of Financial Empowerment and Kevin Sanada of the National Coalition for Asian Pacific American Community Development. These dynamic speakers came together to discuss how immigrants and communities of color were using and perceiving financial products and services post-recession.
Broadly, the research presented showed that most surveyed communities are actively using mainstream financial services and products, but the extent to which each does varies. Specifically, the NYC Office of Financial Empowerment found that among the three communities surveyed—Mexican, Ecuadorian and Chinese—the Chinese community had a much higher rate of being banked (95%) compared to the others surveyed (43% and 65%, respectively), which is even more surprising given they had been in the country for an average of four fewer years compared with the others. While not as dramatic, these data also showed up in the NCLR/CAPACD presentation; their research found that 90% of Asian-American/Pacific Islander (AAPI) respondents had a bank account, compared with 75% for Latino respondents.
Various factors all played a role in the use of these services for surveyed communities, including location, convenience, fees and perception, but the one takeaway that I found interesting is that for these communities, trust is a major factor in how they go about using financial products. In NYC’s study, a third of Mexican and Ecuadorian respondents cited that they chose to open an account only after an explanation by a friend or relative. In NCLR/CAPACD’s survey, 50% of Latino and 40% of AAPI respondents cited that they would turn to a friend or family member first in the event they needed emergency funds before turning to other sources, such as a pawn shop (13% of Latino respondents, 2% of AAPI respondents), auto title loan (9%, 2%) or payday lender (8%, 2%).
Overall, the session showed that while immigrants and communities of color are using mainstream financial products and services, more can and should be done to bridge the gap that remains. Fortunately, each of the organizations represented during the session are doing innovative work to bridge this gap by gleaning a deeper understanding of unmet community needs.
Where is Opportunity in America?
By Alicia Atkinson on 11/13/2013 @ 10:00 AM
Findings from Opportunity Nation’s Opportunity Index show that a child’s ZIP code too often predetermines her economic future. Last Tuesday, I attended an event hosted by Washington Monthly and Opportunity Nation which celebrated the launch of the new data for the Opportunity Index. The event discussed how we can use the data from the Index to expand opportunity and to ensure states are improving year to year. Speakers included Senator Robert Portman (R-OH), Senator Michael Bennet (D-CO), Harry Holzer (Georgetown University Public Policy Institute) and Sarah Burd-Sharps (Measure of America).
The Opportunity Index ranks states based on sixteen indicators that were determined to measure the “infrastructure of opportunity.” These indicators include not just the basics, such as the availability of jobs, affordable housing and quality education, but also look at civic life and social assets. The Opportunity Index can be used as a gauge for policymakers and leaders to identify areas for improvement and gauge progress over time. For example, in the past few years, Washington, DC, has pushed for higher preschool enrollment and their opportunity score has in turn improved.
The new data shows that the higher the number of disconnected youths and the higher the poverty rate in each state, the lower the opportunity score is for that state. Disconnected youth are youth that are age 16 to 24 that are neither in school nor have employment. They often find themselves untethered to any form of structured society. There are approximately six million disconnected youth in the United States. This costs states—not only in lost tax revenue—but also in higher enrollment rates in government assistant programs. Engaging these youths and getting them on track to building a career will have positive ripple effects that will affect their personal financial security and ideally create a stronger economy overall.
One way to engage these youths is to create a path to higher education. CFED emphasizes the importance of starting to save early for education, especially for low-income families who will often have very few assets to assist their child in paying for higher education. One solution that state and federal policymakers have pursued to support this type of early savings are Children’s Savings Accounts. These accounts help families to save for their children’s future college costs, usually augmented by savings matches and/or other incentives, as investment gains accumulate tax-free. A new report from the Assets and Education Initiative (AEDI) out of the University of Kansas found that low- and moderate-income students that have savings of less than $500 earmarked for college were three times more likely to enroll in college and four times more likely to graduate than their peers.
Expanding opportunity in America needs to be everyone’s priority. Investing in youth creates intergenerational impacts and a more active and robust economy. As Lisa Hamilton from the Annie E. Casey Foundation said in closing the event, “we need to learn from the bright spots and scale them to more spots.”
Interested in reading more about the Opportunity Index? Read this month’s issue of Washington Monthly and learn more about the state of opportunity in the United States.
Spoiler Alert: A 2014 Assets Learning Conference Update
By Kim Pate on 11/11/2013 @ 11:15 AM
I think I speak for my fellow 2014 ALC Planners when I say I’m extremely proud of our progress so far! Here’s an update and sneak peek into what the 2014 ALC has in store:
Title and Dates
We have a title for the 2014 Assets Learning Conference, “Platforms for Prosperity,” and dates, September 17-19, 2014. Conference registration opens with a new 2014 ALC website at assetsconference.org in late Spring.
The 2014 ALC will be in a brand-new hotel, DC’s biggest and most modern conference venue. We are watching, and helping to inform, the design of this new venue and will share details of it soon!
We’ve been hard at work and are happy to say we are 40% towards our fundraising goal. We sincerely thank Citi for its support at the Premier Sponsor level; Met Life, our Marquis Sponsor; and Bank of America and Morgan Stanley, our Emerald Sponsors. We are actively securing more sponsors now so we can reach our goal and offer a discounted rate to attendees. If you are interested in becoming a sponsor, please contact me at firstname.lastname@example.org.
One critical way we will build our program is through a Call for Ideas. We find out about great topics, speakers and formats we should incorporate into the conference from you, and we take your suggestions very seriously. We will be sending out a Call for Ideas in the coming months, so please be sure to complete it and share your ideas.
Attendees asked for more formal and informal networking opportunities in their 2012 ALC evaluations. We listened and are building in some very exciting new ways to meet people and learn what’s working in their communities. More on this later!
Capitol Hill Visits
A key component of the ALC is the Capitol Hill Visits we schedule as part of the conference. In 2014, we will make it easier than ever to engage with lawmakers on the Hill and in federal agencies with a time set aside for these activities. We will let you know more soon.
As in prior years, we will have volunteers for various important roles at the conference, from registration to social media to note-taking during sessions. We may even have some new ideas for how volunteers can be important parts of the conference. Stayed tuned for more information when registration opens.
We have always taken the evaluation of the sessions and overall ALC seriously and used the results to continuously improve the planning and delivery of the conference. In 2014, we will work closely with CFED’s Evaluator, Bill Pate (no relation!), to improve the data we collect and report and be able to get a better sense of the conference’s impact for attendees.
How Community-Based Organizations Can Do Business with the CFPB
By David Gragan, Guest Contributor and Stuart Ishimaru, Guest Contributor on 11/05/2013 @ 02:00 PM
EDITOR'S NOTE: This article was initially posted on the Consumer Financial Protection Bureau's blog. Read it here.
So often, the work that we do relies on the knowledge and expertise that community-based organizations provide us. These organizations are our eyes and ears on-the-ground, and they give us feedback on how our work can impact people. We want to make sure that we not only informally include these organizations in our meetings and events, but also offer them the chance to do business with us through contracts.
Like any other federal agency, CFPB procures goods and services through the federal procurement process. We are always seeking the most qualified and innovative firms to do business with us, which include community-based organizations. Typically, these organizations may not use government contracts as a funding source, for various reasons, but we would like to make that option less difficult for them.
We will be hosting a training conference for community- based organizations on how to do business with us on Thursday, November 14 from 10:30 a.m. – 12:30 p.m. The conference will be held in our Washington, D.C. headquarters office and we will have procurement and financial education experts who will walk through the basic steps of federal contracting and what to prepare for. There will be a teleconference line available as well. If you’re interested in attending in-person or by phone, please e-mail email@example.com by Friday, November 8. Please make note of any reasonable accommodations you may need. This event will be jointly hosted by our Office of Procurement, Office of Minority and Women Inclusion, and Office of Financial Empowerment.
In the coming months, we’ll be launching several new initiatives that may focus on financial education and capability programs. We’ll be looking for organizations to work with on these programs, and we’ll be procuring these services through federal contracts. Community-based organizations are encouraged to consider these opportunities. For example, we’ve released a draft solicitation on the “Bridges to Financial Security” initiative. This initiative aims to provide financial education to individuals with disabilities who are transitioning into the workforce, increase their financial capability, and help them take control of their finances.
We want to take full advantage of technology, transparency, open communications, and best practices during the procurement process for these initiatives. That’s why we’ll provide organizations with the resources and opportunities to compete for working with us.
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.
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.
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!
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.
New Event: Integration & Innovation Webinar
By Sean Luechtefeld on 09/30/2013 @ 04:30 PM
EDITOR’S NOTE: The Bank of America Charitable Foundation sent this invitation to their upcoming webinar, which highlights CFED’s portfolio of work that integrates asset-building into social service delivery systems. We hope you can join our very own Kate Griffin on October 10!
As part of our ongoing efforts to help support community leaders addressing a wide range of pressing issues and to strengthen the nonprofit sector as a whole, the Bank of America Charitable Foundation offers a free monthly webinar to nonprofit leaders. Our goal is to feature subject matter experts who can address issues that are brought to our attention by our nonprofit partners. Since September 2009, we have hosted over 50 webinars with a total attendance of more than 15,000 nonprofit leaders like you.
Thursday, October 10, 2-3 pm EDT
Integration and Innovation: Lessons from Organizations Integrating Asset Building into Social Services
Kate Griffin, Senior Program Manager, CFED; Kira Zylstra, Department Director, Individual and Family Stabilization Services, Solid Ground; Fran Rosebush, Senior Manager, United Way Greater Houston THRIVE; Colleen Arons, Enterprise Marketing, Bank of America
Whether it’s helping a family to re-gain stable housing, find and retain employment, or manage their way out of today’s crisis, social service agencies know that the family’s ability to manage their finances is an important factor in their success. This webinar will introduce how social services agencies are helping families to build assets – through effective financial education, strengthening credit scores, saving for emergencies, investing in homes and jobs, and other strategies. We will discuss concepts outlined in the recent publication, “Integration and Innovation: Lessons from Organizations Integrating Asset Building into Social Services.”
Presentation will be delivered through online webinar and conference call. Upon registering, you will receive a reply email with the link to the webinar as well as the bridgeline information. NOTE: First-time participants should ensure that their network is compatible with WebEx.
All participants are required to register through the attached link: http://www.cybergrants.com/boa/webinar. Upon registering, the organization will receive a confirmation email as well as the link to the webinar and the bridgeline. If you have previously registered for a Bank of America Nonprofit Impact Series webinar, you can click on the link, login, go to the bottom and click ‘register for the webinar.’ Registration will be accepted up until Wednesday, October 9.
We thank you for your continued commitment to improving our community.
Read: Highlights from CFED's Policy Forum on the CFPB
By Kristin Lawton on 07/24/2013 @ 05:00 PM
Last Wednesday, over 100 people joined CFED & Democracy: A Journal of Ideas on Capitol Hill for a forum on the impact of the Consumer Financial Protection Bureau (CFPB) after two years. Taking place just one day after the Senate voted to confirm Richard Cordray as the Director of the CFPB, this timely forum welcomed Senator Elizabeth Warren (D-MA), who shared remarks about the importance of protecting and empowering consumers in the financial marketplace. We’re pleased to share her remarks with those of you who were unable to join us in Washington last week here.
Michael Tomasky introduced Senator Warren and talked about the critical role that her article published in Democracy Journal, when she was a professor at Harvard University, had in the creation of the CFPB. After Senator Warren’s speech, the moderator Robert Kaiser provide an insider prospective on the creation of the CFPB, through the Dodd-Frank regulatory reform bill, which he had exclusive access to the key lawmakers responsible for the bill while covering its creation for the Washington Post. Julie Chon, Senior Fellow at the Atlantic Council, kicked off the panel by telling a story about early conversations she had with then Professor Warren about the idea of a consumer protection agency. Jeremie Greer, Director of Government Affairs for CFED, followed by dispelling the simple good guy/bad guy dynamic that often drives conversations about consumer protection. He emphasized the need of strong consumer protection regulation and enforcement, but stated that these actions should not stifle the innovation and partnerships with the financial services sector necessary to bring safe and affordable products to scale. Bill Bynum followed by provided his observation of the CFPB’s efforts as Vice Chair of the CFPB Consumer Advisory Board, and also described the unique challenges consumers face in rural communities such as the Mississippi Delta. Finally, Mae Watson Grote described challenges that clients of the Financial Clinic face and how the CFPB has had tangible impact clients that they have served.
We extend our thanks those who made the event possible, including Senator Warren and her staff, as well as our esteemed panelists.
We’d also like to extend a special thank you to our co-hosts at Democracy Journal. As Senator Warren noted, Democracy planted the seed that led to the growth of the CFPB, and we were pleased to work by their side to make this event happen.
Do you have feedback on the event? Email CFED.
Come Join Us at March Forward, NCTC's 2013 National Conference!
By Lauren Williams on 07/23/2013 @ 04:15 PM
The National Community Tax Coalition (NCTC) will be hosting its 9th National Conference September 11-13 in New Orleans! The Conference, titled March Forward, is the premiere conference for the community tax preparation and asset-building fields. More than 600 attendees are expected to come together to learn, network and celebrate as a field!
This year’s conference centers on advancing, sustaining and growing the community tax preparation, asset building and policy and advocacy field. This event is very timely, especially with the significant shifts going on in our overall economic, social, and financial landscape. It is essential that the VITA field takes advantage of the opportunities to move forward by introducing innovations, promising practices, practical policies, and applied research that will sustain working families – particularly through the critical supports our programs provide them.
This year’s conference will also offer several new Training Institutes. These Institutes are designed to provide conference attendees, an in-depth training focused on tax preparation, advocacy, and higher education assistance as they relate to community VITA programs. Another first this year - in collaboration with practitioners and partners from around the nation, we will provide direct service to local New Orleans residents the week of the conference by helping them get financially fit. Conference participants and other local cohorts have already signed up as volunteers and have the opportunity to serve hundreds of residents in providing skills in budget planning, credit report education, FAFSA preparation, savings planning, and tax preparation services during a fun-filled educational and impactful one-day event.
As always, the NCTC Conference remains the best place to get the practical knowledge you need to take your organization to the next level. By learning from a healthy mix of practitioners, policy experts, researchers, and other innovative leaders, the opportunities to make your organization more effective are virtually endless. Whether you are new to the field or a distinguished veteran, attendees have constantly walked away amazed at how much they’ve learned in such a short time.
The NCTC Conference is an excellent opportunity to learn to improve your program and serve your clients at a higher level! To learn more and register visit the March Forward Conference platform!
The Power of Savings to Transform Educational Outcomes
By Alicia Atkinson on 07/15/2013 @ 05:30 PM
Today, the New America Foundation hosted an event to discuss the power that savings can have on college enrollment and completion, particularly for low-income students. The event marked the release of a new report by the Assets and Education Initiative (AEDI) of the University of Kansas, Building Expectations, Delivering Results, which reviews decades of research on the benefits of Child Savings Accounts (CSAs), accounts that allow families to save for college as investment gains accumulate tax-free.
The presenters and panelists highlighted key findings and discussed issues regarding CSAs effectiveness in assisting in college enrollment and completion. Here are six key takeaways:
- Student debt curbs college success. Research shows that debt over $10,000 begins to reduce graduation rates for the vast majority of college students, as well as harm long-term post-college financial health. Currently, the average student holds $26,000 worth of debt.
- Low-income students need institutions to assist them in reaching higher education. CSAs create an institution that, early in a child’s life, validates his or her goal of college attendance and completion. One panelist shared a story of a CSA holder who had only $50 in his account but the account had created an overall expectation for him to attend college in the future.
- Successful CSAs have four key features. CSAs should automatically enroll every child at birth, involve initial contributions to seed account, match contributions to accelerate accumulation and allow for withdrawals for pre- and post-college expenses.
- Even small amounts of savings help students enroll in and complete college. Low- and moderate-income students that have savings of less than $500 designated for college were three times more likely to enroll in college and four times more likely to graduate than their peers.
- Early commitment of public funds could maximize money being spent. Rather than issuing awards at the time for college enrollment, an earlier commitment of money could create an expectation of college but still remain within the fiscal footprint of current education programs.
- CSAs encourage financial inclusion for a vulnerable population. Issuing a savings account at birth allows low- and moderate-income families to interact with mainstream financial institutions early and possibly create more savings behavior as they have access to non-predatory financial services.
The event covered a wealth of information and powerful evidence of the effectiveness of CSAs in creating an expectation for students to attend college, enrolling and completing higher education and beginning to create an equitable foundation for the nation’s financial aid system. Click here to read the full report and make sure to browse some of their great infographics.
Join CFED, Democracy Journal & Senator Elizabeth Warren on July 17
By Sean Luechtefeld on 07/01/2013 @ 01:00 PM
Examining the Impact of the
Consumer Financial Protection Bureau
A Capitol Hill Policy Forum Sponsored by CFED & Democracy: A Journal of Ideas Featuring Senator Elizabeth Warren (D-MA)
Wednesday, July 17, 2013 | 10 am - Noon
Dirksen Senate Office Building, Room G-11, Washington, DC
Since its creation as part of the Dodd–Frank Wall Street Reform Act, the Consumer Financial Protection Bureau (CFPB) has played a critical role in protecting consumers from harmful financial practices and has improved the ability of American consumers to make better-informed financial decisions for themselves and their families.
As we approach the two-year anniversary of the CFPB opening its doors, CFED and Democracy: A Journal of Ideas invite you to a Capitol Hill Policy Forum on Wednesday, July 17 to discuss the CFPB's impact in ensuring the market for consumer financial products and services works for all Americans.
The Policy Forum will feature a keynote address by Senator Elizabeth Warren (D-MA), whose vision laid the foundation for the CFPB. Senator Warren's address will be followed by a brief question-and-answer session. The event will also feature a panel of some of the nation’s top experts on consumer protection and financial services from various sectors who will discuss the impact the CFPB has had in establishing and enforcing consumer protection laws and the critical role the CFPB will play going forward.
- Robert G. Kaiser, Associate Editor and Senior Correspondent, Washington Post (Moderator)
- Bill Bynum, President, Hope Enterprise Corporation
- Julie Chon, Senior Fellow, Atlantic Council
- Jeremie Greer, Director of Government Affairs, CFED
- Mae Watson Grote, Executive Director, Financial Clinic
This Policy Forum is free, but advanced registration is required. To register, email firstname.lastname@example.org.
Supercharging the Effects of Children’s Savings Accounts
By Sean Luechtefeld on 06/26/2013 @ 04:00 PM
This afternoon, I had the pleasure of joining The Hamilton Project at Brookings for a panel discussion on higher education and social mobility at the National Press Club, just around the corner from CFED’s offices. Titled “The Economic Imperative of Expanding College Opportunity,” the event brought together some of the nation’s foremost experts in empowering students for college success.
The first panel, moderated by Michael Greenstone, Director of The Hamilton Project, started with a discussion of new research, led by Caroline Hoxby of Stanford University. Hoxby and her colleagues—recognizing that low-income, high-achieving students provide a unique entry point to improving college success—did an experiment with nearly 30,000 students to test what interventions increase the likelihood of higher-education enrollment. Their experiment disseminated customized information about university applications and application fee waivers to students who fall in the top 10% performance-wise and in the bottom quartile income-wise.
The result? Students with the information packets were 78% more likely to enroll in higher education. The cost? Six dollars per student.
That’s not a typo. For less than the cost of a sandwich in DC, a student could receive information that made them almost twice as likely to enroll in a community college or university than if they had not received that information.
This remarkable finding got me thinking: what if this information dissemination was embedded into a Children's Savings Account (CSA) program? We already know that students with a savings account in their own name are six times more likely to attend college than students without an account. We also know that co-locating services can amplify the effectiveness of those services, and that behavioral interventions often involve little more than ensuring the right populations receive the right information.
These observations, taken together, suggest that a combination of approaches to empowering students for college success—rather than a single, monolithic approach—offer no less than transformative potential. The key, of course, is strategic partnerships between multiple sectors, including local, state and federal governments; state and federal boards of education; nonprofits; for-profit education service providers; researchers and more. The speakers at today’s event are exemplars of this evolution in thinking; the ways that organizations like Brookings, The College Board, public universities, ACT and others have come together indicates promising next steps for the future of college access.
These strategic partnerships are also the type that will make for a viable, scalable CSAs strategy. Evidence abounds that there is growing support for CSAs, but much work remains to be done. One important step is continuing to bring the voices of CSA advocacy together, and CFED remains dedicated to participating in that critical conversation.
Did you attend The Hamilton Project event today? Share your thoughts using the comments below, or tag @CFEDNews on Twitter using hashtag #CollegeOpp.
Four Insights from Rand's BeFi Forum
By Pamela Chan on 06/06/2013 @ 02:15 PM
Last Friday, I participated in the RAND Behavioral Finance forum (BeFi), an annual day-long conference that focuses on research that combines behavioral science and cognitive psychology with economics and finance. This year’s conference explored how behavioral finance can be incorporated into public policy and efforts to improve Americans’ financial decision-making and well-being. Two panels, “Building Knowledge to Build Financial Stability” and “Behavioral Approaches to Building Savings and Reducing Debt,” were especially relevant to practitioners in the asset building field.
Both panels provided insights on how to support consumers’ financial decisions and outcomes. Here are key takeaways from the presentations.
- Videos and visual tools are more effective in building financial knowledge and confidence than static tools like written narratives and brochures. (Presentation, Samak) Videos illustrate a financial concept through a story presented by actors. Visual tools allow the user to play with different financial decisions and immediately see projected outcomes. Videos have greater potential for immediate use in practice because they can be delivered at a relatively low cost and through a variety of accessible channels such as classrooms and smartphone.
- Changing the way we frame exercises where people are asked to estimate the benefit of financial decisions can change their perceptions of the benefit. (Presentation, Carman) For example, people perceive that their savings will generate a higher rate of return when asked how much they need to save each month now to spend a certain amount each month at retirement than when asked how much they will get to spend each month during retirement if they saved a certain amount each month now. In practice, this means that people who are asked to estimate how much they need to save now could save less because they overestimate the return. People who are asked how much they will get to spend in the future if they save a prescribed amount now could save more because they underestimate the return.
- Providing financial education or access to cheap savings accounts can have positive financial effects (e.g. increase income and savings). (Presentation, Jamison) Whether or not offering both simultaneously creates an even greater financial effect is still inconclusive, but at minimum, there doesn’t seem to be any negative effects of offering both simultaneously (at least among the Ugandan youth in this study).
- Prize-linked savings, soft commitments, and hard commitments all demonstrate the potential to increase savings in lab experiments and should be considered for use in savings products. (Presentation, Kearney; Presentation, Luoto) The decision to incorporate these features should be made in light of the specific the saving product’s objective and target consumer. For example, prize-linked savings, where saving is nominally rewarded with entries into a drawing with prizes, seems to be effective in in motivating males, but not females. Soft commitments, where a person is asked to write down “I’m a good saver. I will save for [insert person’s goal],” are effective at increasing savings in the short term, but its impact erodes over time. Hard commitments, where a person cannot withdraw money until a specific condition is met, are sometimes better in helping people to save more in the long term.
Beyond these two panels, there was also a wealth of insightful topics on how to enhance retirement security, how to better protect investors, and how the federal government and private financial companies are using behavioral finance to build financial capability and stability. Videos of the presentations will be posted on RAND’s BeFi website.
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