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President Trump’s Budget: Wealth Building for the Wealthy at the Expense of Working Families

By Anju Chopra, Joanna Ain, Emanuel Nieves and David Newville on 05/24/2017 @ 03:00 PM

Tags: News, Federal Policy

Yesterday, the President released his fiscal year 2018 budget proposal, and it contains few surprises. While providing more details than the “skinny budget” that was released in March—such as the inclusion of mandatory spending programs such as Medicare and Social Security—it does not drastically deviate from what was included in this earlier, less fleshed out version of the budget. It still reflects the President’s basic goal of benefitting the wealthiest individuals with tax cuts while drastically defunding programs that help the low- and moderate-income households who are already struggling to get by.

Titled, A New Foundation for American Greatness, the budget prioritizes large tax cuts for the wealthy along with defense spending and border security by increasing the Department of Defense’s (DOD) budget by more than $50 billion as well as allocating more than $70 billion to the Department of Homeland Security (DHS) and Justice Department (DOJ) for police and immigration enforcement. It proposes to pay for this through very deep cuts to the core of safety net and beyond that millions of working families depend on for their social and economic well-being.

And it does not stop there. The President proposes spending reductions of more than $3.5 trillion dollars over the next decade, with safety net and other important social programs receiving the lion’s share of cuts. This includes cutting funding for the Medicaid program in half, or more than $600 billion over this time frame.

Below is a high-level overview of proposed cuts and changes to key programs related to each of CFED’s four advocacy campaigns.

Safety Net Programs

Safety net programs took the biggest hit in the President’s FY2018 budget. Recommended are “reforms,” including work requirements and tightened eligibility, to programs that support our most vulnerable families. For programs that are managed jointly between the federal government and the states, like Supplemental Nutrition Assistance Program (SNAP) and Medicaid, there is also a massive cost shifting to the states that would put growing pressure on state budgets in the years to come.

Although the President has insisted that he would not cut Social Security benefits, he cuts benefits for disability programs by $72 billion over the next 10 years. These cuts result in changing Social Security Disability (SSDI) from 12 month retroactive payments when someone is accepted to the program to six month retroactive payments and creating a sliding scale for families receiving Supplemental Security Income (SSI) who have multiple recipients within the household.

Cuts to Health and Human Services (HHS) and the Department of Agriculture (USDA) can greatly impact anti-poverty programs. Within the 16.2% cut to the HHS budget, the President eliminates funding for the Assets for Independence (AFI) program that was cut in the FY17 Omnibus spending bill a few weeks ago. A $616 billion cut to reform Medicaid and the Children’s Health Insurance Program (CHIP) will take healthcare away from families and children who need it the most over the next 10 years.

Temporary Assistance for Needy Families (TANF) is reduced by $1.2 billion in FY2018 and the TANF Contingency Fund, which was created for use by states during economic downturns, is eliminated. The USDA is cut by 20.5% next year—the Supplemental Nutrition Assistance Program (SNAP) alone faces a $4.6 billion cut in FY2018 and a cut of over $190 billion over the next decade, along with a call for work requirements as well.

Other programs that were eliminated include the Low Income Home Energy Assistance Program (LIHEAP), the Community Services Block Grant (CSBG) and the Social Services Block Grant (SSBG).

Housing, Homeownership and Community Development

Federal programs that support housing and community development for low- and moderate-income households would also experience severe cuts under the President’s budget, including more than $6 billion of funding slashed from the Department of Housing and Urban Development’s budget.

It also does not diverge from the “skinny budget” in calling for the elimination of a whole slew of vital housing and community development programs and organizations that support working families, including Choice Neighborhoods, the Community Development Block Grant and the CDFI Fund. For the more detailed list of defunded programs, please see the blog we wrote on the skinny budget.

It also adds the Neighborhood Stabilization Program (NSP) and the Housing Trust Fund (HTF) to the list, as well as gutting the very popular 502 Direct Loan and 504 Home Repair Programs. The NSP and HTF were enacted during the housing crisis to reduce neighborhood blight and housing foreclosures as well as help boost the supply of affordable homeownership, while 502 and 504 provide low-cost loans for the purchase or repair of housing for low-income borrowers that live in rural communities. The budget does preserve the 502 Guaranteed Loan Program, where loans made by intermediary lenders are backed by the government, but at a much lower level than what was budgeted for 2017.

The budget also calls for a reduction in funding for research related to housing and enforcement activities to curb housing discrimination. Given the large racial homeownership gap and growing racial wealth divide, these cuts are particularly troubling.

While much of this news is bleak, there is – thankfully – one positive development. Funding is maintained for the Family Self-Sufficiency program in the budget proposal. This is a small - but meaningful - victory.

Consumer Protections

Unlike the “skinny budget” proposal from earlier this year, the President's full FY18 budget proposal provides us with a more complete picture on how he would fulfill part of his promise to 'do a big number' on Dodd-Frank Wall Street reform. Outside of a handful of regulatory-focused Executive Orders he’s already signed this year, the President’s budget calls for restructuring the Consumer Financial Protection Bureau (CFPB) so that not only is the Bureau brought under the Congressional appropriations process but also refocused towards solely enforcing consumer laws. In calling for such changes, the President’s budget mirrors efforts on Capitol Hill—such as The Financial CHOICE Act of 2017—which would leave countless consumers susceptible to the very same predatory products, services and behaviors that brought our economy to the brink of collapse.

If enacted as the president has proposed, the CFPB's current funding of $650 million would see an immediate 22% reduction in FY 18, which would precede the agency’s transition to a strictly consumer law enforcement agency. As bad as this already is, it is made even worse by the fact that over the next ten fiscal years the president also proposes reductions that are at and above the agency’s current level of funding. Put differently, the President’s future aspirations for the CFPB seem to be not only rooted in reducing the Bureau’s effectiveness to protect consumers, he essentially wants the agency wiped out entirely.

Given the devastating economic impact the Great Recession had and the actions that led to millions of Americans to lose their homes, their jobs and their wealth, it is clear that consumers need a federal agency whose sole mission is to protect them in an ever-changing and complex financial marketplace. Instead of reducing the ability of the CFPB to do the job it was given and one that it has been exceptionally good at doing—including its work towards returning nearly $12 billion back to a total of 29 million consumers—the President should work to elevate and strengthen the CFPB, not gut it.

Tax Time

As mentioned previously, many of the reductions in this proposal are intended for the purpose of providing tax cuts to the wealthy or turning the tax code further upside down than it already is. But this document does not contain any further details on what these tax cuts would look like and the administration has thus far only released one page of bullet points so far that outlines their tax reform plans.

The budget proposal does however go after immigrants’ access to two of the most important poverty fighting and opportunity building tax credits: the Earned Income Tax Credit (EITC) and the Child Tax Credit (CTC). While the EITC and CTC are kept on the books and receive more than $80 million in funding, the administration mandates additional exclusions for those who do not have a valid social security number, even if they are claiming a child with a legitimate number.

The budget also calls for a further crackdown on improper payments and fraud in the tax system, and there have been claims and strong insinuations by this administration and others in Congress that this fraud is being driven by immigrants and low- and moderate-income households through programs like the EITC. However, the evidence simply does not support these claims. Programs like the EITC have been found to only make up 6% of the tax gap and if you are truly serious about stopping improper payments for this program, there are better and more effective ways to do this without making it harder for working families to access these credits or reduce their positive impact.

One way to do this is through requiring paid tax preparers to meet basic competency standards, so they do not file inaccurate or fraudulent tax returns on behalf of working families. The budget proposal includes a provision about regulating paid tax preparers. There are not many details on this provision, but it is one of very few promising pieces in this proposal.

One other bit of positive news is that the budget calls for level funding the Volunteer Income Tax Assistance (VITA) Program at $15 million, which is no small thing and a victory for low- and moderate-income tax filers.

How You Can Stop This Deeply Misguided Budget Proposal from Becoming Reality

First – Stay Positive! Remember, this is just a proposal and we can still stop these cuts and bad proposals. Congress is also the one who writes the actual budget, not the President, but if you do not let them know how you feel about this, some pieces of this may become part of the actual budget, which leads to part two . . .

Second – Contact your Members of Congress Today. Congress is currently in the process of putting together the fiscal year 2018 budget and if they do not hear from you and others about why these proposals are bad, they might decide to adopt some of them.

The only way to stop this is by calling your Representative today and telling them how much you oppose the President’s budget proposal and why. Include details on how these cuts would impact you, your programs and your community. Share personal stories with them and any numbers you have about the impact of these programs if you have them.

Don’t forget to remind them that you will be watching to see what they do and how they vote and will be staying on top of them and calling again as the budget process progresses, which leads to part three . . .

Third – Stay Up to Date on the Budget Process by Signing Up for Our Campaigns. In order to stop these cuts, we need to remain vigilant and not let up on our Representatives as they put together the budget in the coming months. Congress is focused on finalizing the budget by the end of September and there will be several key points to influence them between now and then. To stay up to date on the latest developments and the best ways to engage with your Representatives and stop bad provisions from being included in the final budget, we strongly encourage you to sign up for one of more of our advocacy campaigns. Signing up is the best way to stay informed and be alerted when it is time to act. Together, we can stop these cuts and help build an opportunity economy instead of an inequality economy.

CFED, Institute for Higher Education Policy Collaborate to Integrate Children’s Savings and Promote College Affordability

By Carl Rist on 05/04/2017 @ 09:00 AM

Tags: News, Children's Savings Accounts

Click the image to view the report.

This week, CFED and the Institute for Higher Education Policy (IHEP) released a new policy brief that explores how state and local policymakers, Children’s Savings Account (CSA) program leaders and college access advocates can integrate CSAs into broader efforts to promote college affordability. The brief, Better Together: Policies That Link Children's Savings Accounts With Access Initiatives to Pave the Way to College, makes the case that combining CSAs with college affordability programs and social service supports can improve asset-building outcomes for low-income households, increase postsecondary degree attainment and support intergenerational mobility for low-income families.

These findings are based on a roundtable discussion that IHEP and CFED convened in October 2016, bringing together experts from a handful of cities with both active postsecondary access efforts and active CSA programs. The goal of the roundtable was to connect college access leaders, CSA practitioners and other experts from both fields to explore strategies to better serve low-income families and address college affordability challenges. An important component of this conversation was an examination of the value of reaching students earlier (i.e., as early as elementary school), which became a clear focus of Better Together.

In particular, Better Together urges state and local policymakers and practitioners to:

  • Design CSAs as tools integrated with broader college affordability initiatives, such as College Promise programs
  • Design CSAs as tools integrated with social services that address families’ holistic financial needs

This conversation comes at a critical time for both advocates of CSAs and those working to promote college affordability. With research showing strong connections between college savings, college aspirations and college completion, CSA experts are looking to enhance often-modest college savings levels with programs that provide larger awards to help meet the ever-rising costs of tuition. At the same time, college affordability efforts that have resources to help pay for the significant costs of college seek to broaden the college attainment pipeline by leveraging the ability of CSAs to build college aspirations from an early age.

As the US seeks to raise its overall rate of college completion in a competitive global economy, these efforts to expand college completion among students from lower-income families could not be more timely. To learn more about how CSAs can put higher education within reach, download Better Together today.

Toxic Inequality: It’s Not Just an Environmental Issue

By Emanuel Nieves on 05/04/2017 @ 09:00 AM

Tags: News, Federal Policy

Despite recent attention to the economic and social vulnerabilities facing people of color—Black and Latino populations in particular—the Trump presidency has shifted a great deal of national attention to the plight of White, working-class voters, many of whom elevated the President into office. While the 2016 presidential election may have catalyzed these voters’ sense that their concerns were finally being addressed, the attention being paid to White, working-class Americans since Election Day has also reshaped our conversation about the growing problem that is impacting us all and will continue to well into the foreseeable future: the racial wealth divide.

Today, African American and Latino families face a racial wealth divide that sees them owning just $11,000 and $13,700 in median wealth, respectively, compared to the $142,000 owned by the median White household. While solving issues of economic insecurity requires that we be sensitive to the economic insecurities of all Americans, as President Obama suggested during his farewell speech, we must be mindful that not all economic suffering is experienced in the same ways, nor are they the result of the same historical factors.

With this in mind, CFED and New America co-hosted an event last month to feature Dr. Thomas Shapiro and his new book, Toxic Inequality: How America’s Wealth Gap Destroys Mobility, Deepens the Racial Divide and Threatens Our Future.

The event, which welcomed several expert panelists—Washington Post’s Janell Ross, New America’s Cecilia Muñoz and CFED’s Jeremie Greer—set the stage for a conversation on the racial wealth divide, public policy and the politics that continue to deepen our financial, racial and social divides. During the conversation, Dr. Shapiro and others noted that although recent public policies have been blamed for the pain experienced by White, working-class Americans, there have been a whole host of discriminatory public policies—from redlining to the tax code—over the past century and beyond that fueled the unfortunate realities faced by communities of color today. Indeed, as we work to uncover the social and economic unrest felt by White, working-class families, we must also remain steadfast in our work to reverse the trend of growing racial economic inequality.

As we look toward building an economy that works for everyone, Toxic Inequality is a solid playbook from which we can start. Putting a job with a livable wage and good benefits, access to education, homeownership that is affordable and more within the reach of everyone—not just the select few—will require policies at all levels of government that intentionally lift up communities of color who for far too long have been left behind.

VITA Field: Much to Celebrate Following a Whirlwind Tax Season!

By Rebecca Thompson on 05/04/2017 @ 09:00 AM

Tags: News, Taxpayer Opportunity Network

For those with experience working in the community tax prep world, the 2017 tax season felt a little…different. Even before the season began on January 23, VITA preparers were already grappling with several important issues. For example, the IRS had announced that EITC refunds would be delayed, creating the need to develop messages that would make the refund delay clear to taxpayers and dissuade them from turning to costly Refund Anticipation Loans. Similarly, new Individual Taxpayer Identification Number, or ITIN, requirements that went into effect at the beginning of the year threatened to make the tax filing process a complicated endeavor for the millions of taxpayers who don’t have a Social Security Number.

Despite these challenges—not to mention the transition to a new software system that had a few kinks to work out—the community tax prep field worked diligently all season long to provide the quality service that taxpayers want and need. As the dust settles, it’s time not only to celebrate VITA programs’ many successes this season, but also to think about how we can work together to leverage those successes in the 2018 season and beyond.

One of this season’s successes was the coordinated response to overcome key challenges facing the taxpayers who rely on VITA. In response to the EITC refund delay, CFED’s Taxpayer Opportunity Network, with support from the Intuit Financial Freedom Foundation, developed and disseminated an EITC Refund Delay Messaging toolkit to VITA programs. The toolkit provided a variety of marketing and messaging resources programs could use to amplify the IRS’s messages about the refund delay in their communities. Then, in response to new ITIN Renewal requirements, a range of VITA programs partnered with the IRS to assist taxpayers with their new and renewal ITIN applications, while the Taxpayer Opportunity Network provided support by hosting a webinar with several of our national partners to walk preparers through the new ITIN requirements and how to address filers’ questions. Although these challenges were unique to the 2017 filing season, the ways the field came together to coordinate on messaging and fill in gaps provides a good model for how we can work together for better results in the future.

We can also draw lessons from the field’s outreach efforts this season to reach even more taxpayers in 2018. For example, on January 27, CFED partnered with the IRS on EITC Awareness Day, an annual event supported by H&R Block that raises awareness among local, state and federal lawmakers about the power of the EITC. To mark the occasion this year, our Taxpayer Opportunity Network developed a toolkit, complete with social media messages that the field helped trend nationally. On March 15, we celebrated the third annual VITA Awareness Day with a tour of a VITA site in Virginia that we streamed live on Facebook. Seeing how well people reacted to the behind-the-scenes look at a VITA site, we wrapped up the season with a tour of a VITA site in Utah, this time in conjunction with our partners at the Patriotic Millionaires. Following this event, two members of the Patriotic Millionaires—Art Lipson and Jonathan Ruga—penned an op-ed urging support for the VITA program and the VITA Permanence Act.

Each of these efforts represents a blueprint that we can use to do more—and more efficiently—in future tax seasons. By coordinating our outreach efforts and working together, this season proved without doubt that when we come together, there’s little we can’t overcome. So, as you recover from this whirlwind of a tax season, we hope you’ll take a moment to reflect on just how much we accomplished together.

This April, Join Us As We Work to Put All Families on the Pathway to Financial Capability

By Jennifer Medina and Parker Cohen on 04/10/2017 @ 10:00 AM

Tags: Financial Capability, News

In 2015, President Obama proclaimed April to be Financial Capability Month. Each year since, CFED has embraced this month as an opportunity to reflect on our efforts to help individuals and households build financial capability and traverse pathways toward financial security. Last April, we introduced the Financial Capability Lifecycle, which highlights the universal, expected and unexpected life events that trigger decisions that impact us financially. While these events force decisions at the individual level, they are influenced by many structural and systemic factors, including institutional practices and local, state and federal policies. To celebrate Financial Capability Month this year, CFED is engaged in a month-long campaign to boost awareness about the many factors that influence one’s financial life and about how all of us can play a role in fostering prosperity for more families.

Financial capability is defined as the capacity—based on knowledge, skills and access—to manage financial resources effectively:

  • Knowledge means understanding financial concepts and knowing where to go for support. For example, do I know how to open and use a checking or savings account, or how to create a budget? If my family is interested in purchasing a home, can I locate and attend a first-time homebuyer workshop?
  • Skills means putting knowledge into action. For example, can I make regular savings deposits and track monthly spending? Does my family know how to pull our free credit reports and focus on addressing errors on those reports and reducing our debts?
  • Access means resources—including tools, products and services—are available and accessible to help consumers manage finances effectively.

Of the three elements of financial capability, the access part of the equation is the trickiest. While being motivated to strengthen your financial footing may help inspire you to take action, access to opportunities—including employment, education, homeownership and business ownership—is a significant contributor to a household’s ability to advance economically. When access is limited, demonstrations of knowledge and skills will only take individuals so far.

Let’s take Anna, for example. Anna knows how to open a bank account and set a savings goal, but lives in a banking desert and doesn’t have access to a branch to establish the account. Perhaps she also has a black mark on her ChexSystems report, and as a result, her bank won’t offer her a product that meets her financial needs. Even if she manages to open an account, she’ll likely have concerns about whether saving might affect her eligibility for public benefits. Without access to the right products, services and incentives to save, Anna may continue to rely on costly alternatives, such as check-cashing services or payday loans.

Here’s another all-too-familiar story: The Henderson family wants to buy their first home. They save for a downpayment, clean up their credit and take a homebuyer education class—but struggle to get a home loan due to discriminatory lending practices. Making matters worse, home prices are soaring in their community and most properties are out of reach. Imagine what this might do to their chances of buying a home that appreciates in value and provides an opportunity for their family to build and transfer wealth for future generations.

While many of these issues, particularly barriers around racism and discrimination, are particularly intractable, successful strategies have emerged to tackle aspects of these problems:

  • Bank On coalitions connect unbanked and underbanked consumers to financial institutions that offer safe and affordable financial products and services.
  • As a result of advocacy efforts, nearly all states have raised or eliminated asset limits in at least one key public benefit program (i.e., TANF, SNAP or LIHEAP), removing a huge barrier to families’ ability to save.
  • Organizations are advocating locally and statewide for increased affordable housing supply or are working to advance creative solutions, such as developing or partnering with community land trusts to provide affordable homeownership opportunities.

Given the significance of the challenges—and opportunities—along the pathway to financial well-being, we hope you’ll consider joining our Financial Capability Month campaign between now and the end of April. Here are three easy ways you can get involved:

Thanks for all you do—this month and year-round—to help connect more U.S. families to the knowledge, skills and access they need to build a better life!

CFED’s Strategy to Make Homeownership More Affordable

By Merrit Gillard on 04/10/2017 @ 10:00 AM

Tags: News, Housing and Homeownership, Racial Wealth Divide

Homeownership has long been the largest asset that most U.S. families own. Yet many families—especially those of color—have been locked out of the opportunity to buy a home of their own. Making things worse, in the run-up to the housing crisis, predatory practices stripped away the homeownership advances that communities of color had made in recent decades. Meanwhile, people of color who do buy homes don't enjoy the same wealth-building benefits as White homeowners. Today, homeownership remains one of the largest drivers of the racial wealth divide. But, as our latest report highlights, it doesn't have to be that way.

For many years, CFED’s homeownership work has focused largely on building housing equity and stability for residents of manufactured homes. Now, we are greatly expanding the scope of our homeownership strategy to support access to the financing, services and housing options that all families need in order to successfully become homeowners.

One of the first items on the agenda is to develop a policy strategy for closing the racial homeownership divide. That's why our recently released report, A Downpayment on the Divide, explores the decades of racist policies and real estate industry practices that have created deep racial disparities in homeownership. The report proposes a number of simple, common-sense policies that would ease this divide in homeownership, such as protecting the Consumer Financial Protection Bureau, reforming the tax code, ensuring access to affordable mortgage credit, promoting alternative credit scoring models and expanding the CDFI Fund. While there is no silver bullet to reverse the years of discrimination that people of color have experienced in the housing market, these recommendations taken together have the potential to create a more positive and equitable housing market going forward.

The report also underscores the importance of protecting fair lending and anti-discrimination policies. CFED has been working with national partners to ensure that the Fair Housing Act and the Affirmatively Furthering Fair Housing rule remain in effect and that leaders in the new Administration show a serious commitment to fighting discrimination in the housing market. Given that this month is National Fair Housing Month, we will be taking the opportunity to educate lawmakers about the importance of fair housing policies and fighting threats to fair housing law in Congress. Find out more about how you can engage in this work here.

Also coming up this week is an exciting event on the intersection of homeownership and the racial wealth divide. On April 12, CFED will bring together the Leadership Conference on Civil and Human Rights, Capital Area Asset Builders, Urban Institute, and other local and national experts to discuss race and homeownership, the policy recommendations in our recent report and other promising work in the field to expand homeownership opportunities. RSVP here!

We believe that many more Americans can get on the path to homeownership, but we can't achieve this ambitious agenda alone. If you want to get involved in making homeownership more affordable—or if you just want to learn more about our upcoming events, publications and advocacy opportunities—sign up today to connect with Affordable Homeownership @ CFED!

Hot Off the Press! New Report Highlights Opportunities to Help Young Workers Thrive

By Pamela Chan and Joanna Ain on 04/10/2017 @ 09:00 AM

Tags: News, Financial Capability, Jobs

Click the image above to read the report.

Last summer, with the support of the Prudential Foundation, CFED started on a journey to explore the needs of young, lower-income workers across the nation. As we traveled around the US, we talked with an advisory group of national leaders in the field about financial wellness programs to glean an understanding of what employers know about the financial lives of their workers and how they view financial wellness programs. This work and the findings from it have culminated in the release of our new report, Beyond the Next Paycheck: Creating Opportunities for Young Workers to Thrive. Our research brings to light a fundamental insight: short-term financial worries are getting in the way of long-term financial security, and employers understand that this mismatch hurts their own bottom lines.

From the young workers we interviewed, we learned that concerns about immediate financial needs top the list of financial worries. Almost all of the workers we spoke to were worried about making ends meet—many had concerns over paying their debt and their low savings. Young people like Robert don’t always have enough to keep their utilities on. Likewise, workers like Julia who are also in school worry about their debt getting higher and higher. But, as we learned from our group of advisors, employers don’t often offer services that focus on these immediate needs. Financial wellness services tend to be targeted to higher-income employees with longer-term needs.

This disconnect between what is available in the workplace and what young, lower-income workers need must be addressed. We must encourage employers to find programs that they can run directly and that relate to the short-term and immediate needs (e.g., saving for emergencies, budgeting) of their young workers, rather than long-term needs (e.g., saving for retirement). As a follow-up to our new report, CFED is partnering with the Center for Social Development at Washington University in St. Louis to create a Financial Wellness Program Directory so that employers can find programs that match up with their workers’ needs. There, employers will be able to cull through offerings that speak to the needs of their workers, such as emergency assistance and payroll advances. We're also working to provide additional information for employers to learn more about financial wellness programs and how to take the first steps to get one started in their workplace.

To help ease the disconnect between workers’ needs and services available, we focused on several other key insights to help guide employers that want to support the financial security of their young, lower-income workers:

  • Young workers want financial wellness services that are interactive, individualized, simple and secure. To fit this need, employers should think about services like financial coaching, financial classes, online tools and interactive savings programs.
  • Employers can leverage a number of existing programs, services and resources to meet the financial wellness needs of young workers through partnerships with many nonprofit and government programs that are targeted to the specific needs of lower-income workers.
  • Employers can and should track effectiveness and impact of services to help demonstrate a return on investment on such programs in the long term.

Employers have an important opportunity to positively influence the financial well-being of young workers. With the release of Beyond the Next Paycheck, we hope that employers can better understand what kind of financial wellness programs young, lower-income workers need in the workplace so that this emerging workforce can be primed for financial security well into the future. Stay tuned for more in the coming months!

Skinny Budget Starves Critical Programs

By Joanna Ain, Chad Bolt, Anju Chopra and Emanuel Nieves on 03/16/2017 @ 04:00 PM

Tags: Federal Policy, News

President Trump released his “skinny budget” earlier today – a document that is both a broad outline of his priorities and a troubling budget forecast for low- and moderate-income families trying to get ahead. It is not a budget that will help build an opportunity economy. It comes on the heels of an Affordable Care Act “repeal and replace” bill that turns tax credits to help Americans afford health insurance upside down and was scored by the Congressional Budget Office as causing 24 million Americans to lose their health insurance by 2026. It was accompanied by $33 billion in supplemental requests for the current fiscal year for additional funding for the Department of Defense and the Department of Homeland Security, to start building a wall on our southern border.

Light on details, the FY18 budget includes a $54 billion increase for defense spending, offset by commensurate cuts for “non-defense discretionary spending,” or the part of the budget that funds housing, consumer protection, community development and some safety net programs. These cuts underscore just how devastating this budget would be for low- and moderate-income families. The budget also exacerbates the ever-growing gap between the wealth of white households and households of color, by cutting or completely eliminating programs that make targeted investments in communities of color.

It’s important to reiterate up front that Presidents’ Budgets are usually very different from what Congress eventually adopts. Congress has its own prerogatives and priorities that will be debated over the next few months, first in what are called “budget resolutions,” expected in early spring. The budget resolution sets overall spending levels to begin the appropriations process, which determines specific program-by-program funding levels. In recent years, the whole process did not conclude until December. Along the way, Congress will likely make significant changes to the President’s budget, although it’s not clear yet where or by how much.

Nevertheless, this is a very challenging point from which to start the budget process for advocates for low- and moderate-income families. While there are very few specifics in the budget, highlights (really low-lights) include:

Safety Net

The budget proposes cutting programs that support low-income households and make up the first rungs of the ladder of opportunity that lead to financial security. While there are no specifics on the Assets for Independence (AFI) program, the budget proposes an 18% cut for the U.S. Department of Health and Human Services (HHS) – over $15 billion. These cuts include the elimination of the Low Income Home Energy Assistance Program (LIHEAP), which assists low-income families with energy costs, and the Community Services Block Grant (CSBG), which supports families in poverty with services that include housing, employment and nutrition.

Though it does not appear that the Supplemental Nutrition Assistance Program (SNAP) is at risk for now, the budget does propose a cut of $200 million to the U.S. Department of Agriculture’s Women, Infants and Children (WIC) program that provides nutritional and health supports to low-income women and their children.

Several independent agencies and commissions that support low-income communities are also being recommended for elimination, including the U.S. Interagency Council on Homelessness, which works to reduce our homeless population, the Legal Services Corporation, which funds free civil legal assistance for low-income households, and the Corporation for National and Community Service, which funds the AmeriCorps program, mobilizing Americans to serve vulnerable populations.

Housing and Community Development

The President's budget slashes spending on programs that support affordable housing and homeownership opportunities for low- and moderate-income families. The U.S. Department of Housing and Urban Development (HUD) receives just $40.7 billion in discretionary funding, a $6.2 billion reduction from 2017 levels. Notably, the budget only identifies $4.1 billion in program reductions of the $6.2 billion that that it eliminates from HUD. This 13% cut to HUD puts critical, asset-building programs like the Family Self-Sufficiency (FSS) program at risk of ending up on the chopping block.

A number of important programs that help make homeownership safer and more affordable for low-income families are also singled out in the budget for elimination. These include the Community Development Block Grant (CDBG) program, the HOME Investment Partnership Program, Choice Neighborhoods, the Self-Help Homeownership Opportunity Program and Section 4 Capacity Building for Community Development and Affordable Housing. It also eliminates the Department of Energy’s Weatherization Assistance program and the Environmental Protection Agency’s Energy Star program, which help families lower their energy bills.

NeighborWorks America, the Delta Regional Authority and the Appalachian Regional Commission would also be eliminated under this budget. These are organizations that give an economic and social boost to distressed, primarily low-income communities by improving job opportunities, investing in business development, identifying community leaders, improving infrastructure and transportation and developing programs that contribute to community health and wellness.

Finally, the budget eliminates $210 million in funding for CDFI Fund grants, asserting that the 20-year old program supports a “now mature industry where private institutions have ready access to the capital needed to extend credit and provide financial services to underserved communities.” The Fund, which continues to see increased demand for grants, invests in low-income communities and administers the New Markets Tax Credit, which continues to help attract needed private sector investment in distressed communities.

Consumer Protections

In line with the rest of his budget, the president’s regulatory focus is light on details as he focuses only on his action to enact a government-wide regulatory freeze and his two executive orders to curb regulations and enforce his regulatory agenda. Overall, despite the president’s focus on reining in burdensome regulatory costs and unnecessary regulations that cost jobs, consumer choice and economic growth, his budget’s focus on this issue is limited to a total of three pages.

While this may seem like a victory, the next budget will likely not be light on details or friendly to various agencies working to protect families in the consumer financial market as well as in other aspects of life, such as housing and retirement. If anything, the president’s initial take to eliminate 62 agencies and programs—many of which have shown to be effective in providing much-needed resources and support to communities and families throughout the country—indicates where the next round of cuts will come.

Key among future possibilities are reductions and changes to the Consumer Financial Protection Bureau (CFPB), which in just six short years has done a lot on behalf of families everywhere. In fact, despite being labeled as inefficient, the six-year old investment taxpayers have made to the agency since it opened so far has yielded a return of $4 dollars for every $1 spent. Overall, that’s resulted in nearly $12 billion being returned back to about 30 million consumers. The Bureau has not only been efficient with its resources, it’s also been effective as well. Through its supervisory and regulatory powers, the CFPB has not only given a voice to consumers through its complaint system, it’s also established rules to protect consumers across a number of markets, including mortgage, credit card and payday lending markets.

If the president truly believes “the American people deserve a regulatory system that works for them, not against them—a system that is both effective and efficient”, then his budget should strengthen, not eliminate or weaken, agencies like the CFPB and others that are protecting families against unfair, deceptive and predatory financial practices.

Tax Time

The budget proposes a $500 million cut to the Department of the Treasury, a 4.4% decrease from last year. This includes cutting $239 million by “diverting resources from antiquated operations that are still reliant on paper-based review in the era of electronic tax filing.” There are no further details on this proposal at this time, and the budget doesn’t come close to specifics on the funding level for Volunteer Income Tax Assistance (VITA) grants.

More Left Out and More to Come

Notably, the budget released today leaves out a number of components that are normally included in a budget – even “skinny” ones released in the first year of an administration. A summary of policy changes, revenue and tax policy proposals, entitlement reform proposals, and economic assumptions were all not included. OMB Director Mick Mulvaney has said we can expect more details on these components, along with program-by-program specifics, in May.

A budget that builds an opportunity economy would have proposed strengthening the Earned Income Tax Credit and integrating financial capability into Community Health Centers. It would have supported the CFPB and helped put affordable homeownership in reach for all Americans. And it would have included administrative actions to close the ever growing wealth gap between white households and households of color.

What can you do? If you haven’t already, sign up for one or more of our campaigns to stay on top of the latest developments and opportunities to defend and advocate for our priorities. The nuts and bolts of the budget process – including committee hearings and appropriations requests – often take place well below the headlines. Make sure you’ve signed up so we can let you know when these key opportunities for advocacy are coming up.

Upset about these cuts to programs you support? Contact your members of Congress and tell them you do not support these massive budget cuts. This is just the first of more bad news to come, but if we stick together and push back against policies and budgets that don’t reflect our priorities, we can lessen the impact – if not score outright victories for the opportunity economy.

2017 Assets & Opportunity Scorecard Policy Data Now Available

By Holden Weisman on 03/09/2017 @ 10:00 AM

Tags: Data and Research, Local Policy, News, Assets & Opportunity Initiative

As a preview of the upcoming 2017 Assets & Opportunity Scorecard, we’re pleased to release a complete set of this year’s state policy data! The State-by-State Policy Profiles and the series of Policy Briefs contain the full set of policies on how far states have gone to build their residents’ financial well-being, as well as what states can do to put their residents on stronger financial footing. You can browse and download both sets of documents by visiting the Assets & Opportunity Scorecard website.

The State Policy Profiles outline the full slate of policies assessed in the Scorecard and identify what has been achieved and what opportunities still exist to enact policies that contribute to household financial security. After learning about how your state performs, you can dig deeper into any of the policies included by downloading the corresponding Policy Brief. If, for example, you’re interested in proposing legislation to remove asset limits in Tennessee, you can download the “Asset Limits in Public Benefits Programs” Policy Brief, which includes an overview of the policies, what the state can do to enact them, how CFED assesses the states on these policies within the Scorecard and what other states have done in this area.

We encourage you to use State Profiles and Policy Briefs to guide your 2017 state-level advocacy work. This might entail referencing the policy solutions presented in testimony relating to bills introduced in your legislature, or it might entail comparing how your state stacks up against your neighbors to identify policy alternatives to problems faced at home. There are a range of ways to use all of the tools, and if you are interested in exploring how you might leverage them, please send us an email.

The State Policy Profiles and the Policy Briefs are only some of the tools we will make available as part of the rollout of the 2017 Scorecard. Later this year, the policy data will be accompanied by the release of our 2017 outcome data, which paint a picture of how residents in all 50 states and the District of Columbia are faring when it comes to their household financial security. More information about the release of the 2017 Scorecard outcome data will be shared via email, so sign up to stay informed.

If you have any questions regarding the Scorecard or need additional data to support your advocacy work during the 2017 legislative season, please contact Holden Weisman, State & Local Policy Manager, at

New Brief Highlights Opportunities for Expanding or Aligning Financial Capability Efforts

By Megan Bolado and Dominique Derbigny on 03/09/2017 @ 09:00 AM

Tags: Financial Capability, News

Click to read "Paving the Way"

At CFED, we spend a lot of time on the road delivering technical assistance and bringing organizations together to help them maximize their impact in their communities. As part of our commitment to sharing knowledge and best practices, it is our pleasure to document the lessons we learn from our deep engagements with the many partners who make the work of boosting financial capability possible. A prime example is the Community Financial Empowerment Learning Partnership, an 18-month project that JPMorgan Chase & Co. generously supported. Today, we’re excited to share “Paving the Way: A Roadmap for Organizations Partnering to Deliver Financial Capability Services,” a brief which documents the phases of the financial capability integration lifecycle—discover, design, implement and converge—as experienced by the members of the Learning Partnership. These lessons provide powerful insights for organizations eager to integrate financial capability services into their existing work or to partner across their communities to help boost clients’ financial well-being.

The Community Financial Empowerment Learning Partnership concluded in September 2016. The Learning Partnership consisted of seven groups of community-based organizations seeking to improve their clients’ financial lives by expanding and aligning financial capability service delivery to more holistically support their communities. Participants in the Learning Partnership included:

  • Catholic Charities of the Diocese of Santa Rosa (Sonoma County, CA)
  • Clarifi, with partners City of Philadelphia and Energy Coordinating Agency
  • Financial Guidance Center (Las Vegas, NV)
  • Massachusetts Community Action Partnership
  • United Way of Miami-Dade, with partners Catalyst Miami, Branches and the City of Miami
  • Wayne Metropolitan Community Action Agency (Detroit, MI)
  • WiNGS, with partners New Friends, New Life and Metrocrest Services (Dallas, TX)

Over the course of the project, important learnings emerged about the process of planning for and delivering financial capability services in partnership with others and “Paving the Way” shares these lessons with the field. These lessons reaffirm for us that integrating services can be an iterative and resource-intensive process for organizations, especially when partnering across organizations and communities. However, applying the lessons and experiences of the organizations in the Learning Partnership may simplify the process and ultimately lead to improved impact on the financial capability of low- and moderate- individuals and families.

Download “Paving the Way” today and browse a range of other financial capability integration resources at

CFED Collaborates with National Partners to Launch Tax Alliance for Economic Mobility

By Chad Bolt on 03/09/2017 @ 09:00 AM

Tags: Federal Policy, News

The federal government spends $660 billion every year on wealth-building subsidies to help Americans save for college, homeownership and retirement. The problem? These wealth-building programs are upside down—meaning they help the already wealthy build more wealth, but help families at lower income levels very little. As one piece of our broader strategy to flip this upside-down tax code right-side up, CFED partnered with PolicyLink to launch the Tax Alliance for Economic Mobility last week, a coalition of national organizations committed to building a tax code that is more inclusive, progressive and equitable.

CFED’s investment in the Tax Alliance couldn’t be timelier. With Congress gearing up to make changes to tax policy in some way—whether in the form of broad tax reform or simply via tax cuts—making sure the tax code works for everyone has never been more important. The Tax Alliance is made up of nearly 40 national advocacy organizations, racial justice groups, think tanks and tax experts coming together to ensure that tax reform debates move in the direction of equity, not exclusion. Organized around four broad areas of tax policy—homeownership, higher education, retirement and tax credits for low-income workers—the Tax Alliance has four working groups that respond to legislative proposals and looming congressional threats to an equitable tax code. The Tax Alliance has published four principles documents describing each of these areas.

The work of the Tax Alliance is fueled by a diverse group of leaders, but our success also depends on you. We’re committed to leveraging the Tax Alliance to deliver the tools and resources you need to be an effective advocate for inclusive and equitable tax reform. On our new website, you’ll find a series of resources and publications that explain key issues and how you can engage. There, you can also connect with the member organizations, all of which are respected leaders inside the Beltway and nationally on issues that affect the financial well-being of the most economically vulnerable communities. And, if you sign up for updates, you can receive periodic updates about recent developments on the national tax reform stage, including our brand-new newsletter.

The members of the Tax Alliance span a broad range of interests and missions, but they are united for a tax code that is more inclusive, progressive and equitable. We hope you’ll unite with us as we work to make this vision a reality.

Tax Season Kickoff, EITC Day Highlight the Importance of Tax Time in Boosting Financial Well-Being

By Rebecca Thompson and Chad Bolt on 02/09/2017 @ 10:00 AM

Tags: News, Taxpayer Opportunity Network

For folks who understand the power of tax time as a pathway to financial health for millions of workers and their families, the past few weeks have been an exciting time. On January 23, we officially kicked of the 2017 filing season, and later that week, CFED and the Taxpayer Opportunity Network celebrated EITC Awareness Day. Then, just last week, we partnered with Tax Credits for Workers and Their Families and H&R Block to convene a Capitol Hill Policy Forum about creating opportunity and fighting inequality at tax time and beyond. Each of these events helped raise awareness and mobilize action to spread the word about the Earned Income Tax Credit (EITC), Volunteer Income Tax Assistance (VITA) and other powerful tax-time financial capability-boosting programs.

With the start of the 2017 filing season, community tax programs and local and state governments joined in with the IRS to mark the 11th annual celebration of EITC Awareness Day on January 27. Throughout the month leading up to EITC Awareness Day, CFED and the Taxpayer Opportunity Network partnered with a range of allies to send a consistent message: protecting and expanding the EITC is critical to our shared mission of expanding economic opportunity. EITC Awareness Day also gave us the chance to recognize the important role that VITA programs play in connecting taxpayers to the EITC. Network members and other allies celebrated EITC Awareness Day by sharing social media messages, videos, shareable graphics, state-by-state data snapshots and more, which led to #EITCAwarenessDay trending nationwide on Twitter!

On February 2, CFED, Tax Credits for Workers and Their Families and H&R Block welcomed Senator Sherrod Brown (D-OH) and Representative Gwen Moore (D-WI) to a packed room on Capitol Hill. The day kicked off with a keynote address from Senator Brown, who underscored his strong support for the VITA program and his tireless work to expand the EITC, such as his 2015 legislation to make permanent important improvements to the EITC. Later in the day, Representative Moore highlighted her work with the Consumer Financial Protection Bureau to protect low-income families and people of color from predatory and discriminatory loans, as well as her fight to give everyone an opportunity to rise out of poverty. Both speakers emphasized that the political landscape will be a challenging one for advocates, but that we can still achieve meaningful victories by remaining steadfast in our commitment to showing the power of consumer protections and the social safety net.

As we look toward a busy and productive tax filing season, we encourage you to join the Taxpayer Opportunity Network. Joining is free and gives you access to a gold mine of resources, including webinars, publications, learning groups and more that help you tackle challenges from volunteer recruitment and retention to mastering TaxSlayer and everything in between. Learn more and join today!

What’s That We Hear? A Field of Advocates Ready to Make Financial Security a Reality for All

By Fran Rosebush Baylor and Leigh Tivol on 02/09/2017 @ 09:00 AM

Tags: News

Ever have a gut feeling you need to talk to your friends? That’s how we felt after November’s election—that we needed to connect with our partners to hear how you’re doing and what you’re thinking about the changes on the horizon. So, that’s exactly what we did. We segmented the country into regions and enlisted the help of the Assets & Opportunity Network Steering Committee for a series of calls to get a pulse on our partners’ priorities and concerns, give people the opportunity to hear from one another on opportunities to work together, and learn more about how we can best support your efforts. As always, you showed up, ready to connect.

Last month, we brought about 400 practitioners, advocates and researchers together for eight “Virtual Regional Listening Sessions.” Through these sessions, we gathered data and feedback on national trends, regional priorities, emerging leaders and feedback on how to best work together moving forward. By the end of the sessions, we learned an enormous amount, and we’d like to share those takeaways with you.

Identifying National & Regional Trends

We learned that most people are concerned about the future of public and private funding for family financial security solutions. How will we help low-income families stay in their home? Save for college? File their taxes accurately and for free? Given that many of the social safety programs we value might make their way to the chopping block, there is a great deal of concern about how critical services will be delivered.

We also learned that there is an increased desire among nonprofit practitioners to engage more deeply in advocacy. There are a variety of ways CFED intends to offer more opportunities to engage more deeply in advocacy, but if you’re looking for an easy way to start, you can sign up to stay informed on key issues and share stories about the needs in your community.

On a related note, we learned that many advocacy groups are increasing their focus on state-level policy opportunities in the midst of federal uncertainty. Expanding tax credits for working families, reducing eligibility barriers to public benefit programs and strengthening consumer protections all sit atop these groups’ agendas.

Across every region, groups expressed a desire to connect more—people want to plug in, stay informed and ready themselves for action. Groups are also looking at the broader economic security picture and thinking about how to lock arms with folks in “adjacent” fields, such as environmental advocates, health care providers, criminal justice reform allies and more. One easy step for connecting with new partners: find your state’s Assets & Opportunity Network Leader.

At a national level, the listening sessions also made clear that three of CFED’s four federal policy priorities—expanding affordable housing, protecting the social safety net and ensuring strong consumer protections—were also the top issues in each of the eight regions. Our fourth priority area—turning the tax code right-side up—was not identified as a top-three priority, but has important implications for all aspects of our collective work to expand economic opportunity. Learn how here.

Finally, alongside these national trends were a number of nuances between regions, each of which are listed in this findings document. That there were so many unique priorities at the regional level in addition to the shared priorities among all regions suggests that there is a pressing need to more deeply understand the unique contexts that vary from one region to another.

What’s Next?

First, we want existing and potential new partners alike to know that we’re ready to stand with you. We’re eager to help prepare the increasing numbers of advocates who want to ensure financial security and economic inclusion is truly a reality for all. In this spirit, look out for new advocacy trainings and tools in the coming months. In the meantime, sign up for one of our four federal policy campaigns or check out the latest state- and local- level data on financial security.

Second, we look forward to working with the Assets & Opportunity Network Steering Committee to develop a plan to continue these regional dialogues. Almost 90% of all survey respondents said they’d like to continue these regional discussions. This means we have clear marching orders, and we’re using your feedback to refine these conversations to ensure they can best meet your needs. Stay tuned for future opportunities to connect with peers regionally.

Finally, we are committed to developing communications and messaging resources related to our shared policy priorities, as these will be critical to showing why these priorities are essential for expanding economic opportunity for all families. For example, we heard that there is a need for clear messaging on why turning the tax code right-side up is critical, how our policies will help close the racial wealth divide, and how all of these policies fit into our broader Household Financial Security Framework. If you have messaging and communications suggestions, resources or tools to share, please email!

The Virtual Regional Listening Sessions were such a valuable way to hear from our partners across the country, and we learned so much about local and regional priorities and how we can better connect our partners. But we’re just getting started, and your contributions are key to strengthening our networks and our efforts.

If you weren’t able to join a session but want to share your thoughts, suggestions or ideas, please email If you want to learn about future opportunities to engage, sign up for email updates.

Black History Month 2017: Our Focus Should Be On Celebrating History. And Making It.

By Dedrick Asante-Muhammad on 02/09/2017 @ 09:00 AM

Tags: News, Racial Wealth Divide

February is Black History Month, and as our nation celebrates this year, a positive light will once again be shined on African Americans’ many contributions to and influences on this country’s history and culture. Although this is an important moment for reflection, we also must focus on the present day realities of African Americans in the United States. In particular, Black History Month is an ideal time for us to explore the undeniable correlation between race and wealth, as well as how we can move forward as a nation to bridge the ever-growing racial economic divide. As CFED supporters and allies know best, there is still a long way to go in our shared mission of advancing civil rights and expanding opportunity for African Americans. Indeed, in an opportunity economy, there is no room for racial wealth inequality.

Much has happened since last year’s Black History Month. In the past year, we’ve witnessed the rise of the Black Lives Matter movement to a nationally recognized slogan, which exposed the unfair treatment of many African Americans by law enforcement officials. These issues also entered the spotlight during the 2016 presidential elections, which provided a platform for politicians to draw attention to the fact that African Americans are disproportionately targeted and imprisoned for non-violent crimes. This Black History Month will also be the first since the Smithsonian’s National Museum of African American History and Culture opened to the public toward the end of the first Black president’s second term, itself an historic moment. These are all notable advances in the mission to bring attention to the continued hardships faced by African American families.

Nevertheless, we have much history yet to make if we are to usher the nation into an era not defined by racial economic inequality. As CFED and the Institute for Policy Studies reported in August, racial economic inequality is on a path to expansion, not contraction. From 1983-2013, African American median income wealth declined from $6,800 to $1,700, while White median income wealth increased from $102,200 to $116,800. If these trends continue, by 2043, when White people are projected to comprise a minority of the nation, African Americans will have median wealth of just $425. Over that same timeframe, however, White wealth is projected to increase to $131,980.

Rampant inequality helps to explain, in part, why demand for change is sweeping across the nation. From the newly elected president to the millions of people finding themselves on protest lines, it seems that our nation is finally realizing the current trends are unsustainable.

In this context, this year’s Black History Month feels like one where our attention should be focused on making history, rather than solely reflecting on the great deeds of the past. Pulling our country away from an increasingly calcified apartheid socioeconomic order will itself change the course of history. To that end, CFED will remain steadfast in working with you to make 2017 another powerful year in forging a path toward overcoming racial wealth inequality.

President Trump & Congressional Republicans Are Putting the Interests of Wall Street over Working Families

By Emanuel Nieves on 02/07/2017 @ 11:00 AM

Tags: News, Federal Policy

By Seeking to Repeal Common Sense Financial Regulations, President Trump Sides with Wall Street over the Forgotten Men & Women that Elected Him

Last Friday, President Trump signed an executive order that would begin the process of rolling back critical financial regulations and consumer protection laws, including the landmark Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). The order, signed after a meeting with a number of business executives, establishes a set of core principles for what the administration believes would constituent prudent financial regulations and instructs the Treasury Secretary to conduct a sweeping review of financial regulations to determine if current rules are promoting or inhibiting these principles.

Framed as a way to remove burdensome regulations, the exercise authorized by the President will only serve as a road map to weaken or eliminate common sense Wall Street reforms and consumer protections. Although the order does not get into specifics, we imagine that the review will target the good work done by Consumer Financial Protection Bureau (CFPB), which in just five years has returned $12 billion to 29 million wronged consumers across the country.

Yet, despite the value Dodd-Frank and the CFPB have demonstrated to working families, coupled with the fact that then-candidate Trump himself said he would not let “Wall Street get away with murder”, this action is another affirmative statement that it’s ok for Wall Street to continue with the same behavior that led to the 2008 economic crisis. Given that this behavior resulted in massive economic losses for the very same forgotten men and women he’s pledged to uplift and protect—including African-American, Latinos and Asian-American who lost more than half their wealth during the economic downturn—President Trump’s regulatory action will undoubtedly hurt working families.

Unfortunately, Congressional Republicans are Also Working to Block Consumer Protections That Would Protect Working Families

On the heels of President Trump’s Executive Order last Friday, Congressional Republicans in the House and Senate have begun to use an obscure piece of legislation—the Congressional Review Act (CRA)—to repeal several sensible regulations put in place by the Obama administration.

Among those efforts in one led by U.S. Senator David Perdue and U.S. Representative Tom Graves, along with several other congressional republicans, including Senator Johnny Isakson and Congressman Barry Loudermilk of Georgia, to block the CFPB’s prepaid card rule from going into effect. By using the Congressional Review Act, this action would not only block basic fraud protection and fee transparency protections from being extended to all prepaid card users, it would also indefinitely tie the CFPB’s hands from ever proposing a “substantially similar” rule the future.

Given the rapid growth in the prepaid card market over the past several years, including the fact in 2015 the FDIC found that nearly 10% of all underbanked households—over 12 million—used a prepaid card to manage their financial lives, blocking this common sense regulation should not be a priority for Congress. Instead of allowing prepaid card companies to make tens of millions of dollars in through costly fees, including overdrafts, or making it more difficult for these consumers to access their own money, Congress should allow the CFPB’s rule to take effect.

By doing so, these congressional republicans would ensure that American families that have been shut out of the mainstream financial system can enjoy in some of the same protections banking and credit cards consumers already have. Otherwise, congress is also just picking Wall Street over working families.

We Must Stand and Speak for What We Believe In

By Leigh Tivol and Kristin Lawton on 01/30/2017 @ 11:00 AM

Tags: News

CFED stands with refugees and immigrants in their journeys toward hope, safety and opportunity. Moreover, we are heartened by the tens of thousands of people around the country and around the world—at city halls, in airport terminals and marching in the streets—who are making their voices heard. They—and we—believe that our long-standing American values of acceptance, diversity and openness must prevail over fear, demagoguery and divisiveness.

We believe diversity must prevail because it is in our DNA as Americans; our nation was founded on inclusion and acceptance. Every immigrant who has come to this nation to build a better life for their family is another example of someone who wants what we all want: a shot at prosperity and the chance for the next generation to live a better life than our own.

We also know that making good on the promises of diversity and inclusion requires opportunity in all forms. Here at CFED, we often say we believe in economic opportunity for all families, regardless of which ZIP code you’re born in. The same is true regardless of which country you’re born in. We stand for protecting the social safety net for our most vulnerable. We stand for safe, affordable housing and the chance to build wealth through homeownership. We stand for defending consumers against unscrupulous companies who seek to strip their hard-won earnings and assets. And we stand for fairer federal tax programs that help all households build wealth.

Perhaps most importantly, we know that we must keep fighting, and we must do so on all fronts. Moves in recent weeks—and especially in the past ten days—have brought so many new and unprecedented challenges that it’s hard to keep up with them all. Luckily, you haven't lost sight of what matters. By taking to the streets, building relationships with potential allies, holding our elected officials accountable, opposing policies that would increase financial insecurity for vulnerable families and more, you are staying diligent in our fight to ensure that the opportunity economy we envision remains within reach. We have lots of work ahead, but your commitment proves that we are strongest when we stand together.

The past several days have felt overwhelming, but we have to stand up and speak up. And, we must keep standing and keep speaking—for all the issues that matter to us.

Thank you for standing with us.

President Donald Trump Won't Help the Working Class by Attacking the CFPB

By Jeremie Greer on 01/26/2017 @ 12:00 PM

Tags: Federal Policy, News, Featured Stories

Editor's Note: This article was originally published at U.S. News on January 25, 2017.

Donald Trump has just been sworn in as our next president and already newly emboldened congressional Republicans are planning assaults on an agency that exists to help all consumers, regardless of party affiliation. And they’re doing so even though Trump ran on a platform of protecting working-class Americans.

The agency is the Consumer Financial Protection Bureau (CFPB), part of the Dodd-Frank reform package enacted by Congress to rein in the excesses of the banking and finance industry in the wake of the Great Recession. The CFPB was created with the recognition that products like mortgages, credit cards and student loans involve some of the most important aspects of people's lives. It's the first and only federal agency dedicated to protecting consumers in the financial marketplace.

In the six short years since its formation, the CFPB has collected and sent back to consumers $12 billion (that's billion with a "b") from financial service companies that have preyed upon U.S. consumers. It now is finalizing a "payday rule" that finally would bring basic protections to an industry that costs Americans more than $8 billion annually in interest fees.

And the response from Congress? Two Republican senators have called on Trump to fire the CFPB's director, Richard Cordray. The chairman of the House Financial Services Committee has introduced a bill that would gut much of the bureau's regulatory authority and replace the office of director with a five-member commission subject to congressional oversight and appropriations. And Trump's own transition team now is promising to dismantle the 2010 Dodd-Frank law, suggesting it's produced nothing but "bureaucratic red tape and Washington mandates."

So what type of red tape and mandates are we talking about?

Over and beyond the $12 billion returned to consumers through enforcement actions, the CFPB has introduced strong new mortgage disclosure forms that have improved the market and gone a long way to rectify the predatory lending practices that were rampant before the financial crisis. The agency's consumer complaint database has given Americans a vehicle for getting attention and help for problems with financial institutions. And the bureau has conducted research and outreach to millions of people so they better understand their finances and can access good financial products.

Moreover, the CFPB has or will soon introduce strong new rules in several markets beyond the payday rule to improve fairness and transparency for consumers, including in the areas of prepaid cards, overdraft offerings and arbitration requirements. Congressional critics say the rules and enforcement actions of the CFPB are holding back lending and the economy in general, but the evidence isn't there to support that. Lending in mortgages and other financial products is approaching pre-crisis levels, unemployment is under 5 percent and the stock market is approaching all-time highs.

So what's the real fallout if Trump goes along with the congressional assault?

Replacing the director with a commission would bog down the agency's work and mire it in politics, similar to what's happened at the Securities and Exchange Commission. Moving the funding of the CFPB from the Federal Reserve System to Congress would not only add to the deficit, but would allow Congress to stymie the work of the bureau by starving it of funding. Congress has done the same to the SEC and the Internal Revenue Service, greatly reducing their effectiveness.

Families would lose protections from predatory products that could leave them mired in debt and unable to pay for basic living expenses, let alone save or build wealth to get ahead. And if arbitration rules were overturned or watered down, consumers would have no ability to hold financial institutions accountable for predatory practices and would never be able to have their day in court.

Last fall, Treasury Secretary Jacob Lew testified to Congress that the law and associated regulations absolutely had made the financial industry safer and that it made no sense to roll back those protections. Even the financiers are urging caution; Goldman Sachs CEO Lloyd Blankfein says it might be appropriate to review some parts of Dodd-Frank, but he wouldn't "want to repeal in toto."

A partisan backlash against federal regulation is not what we need right now, particularly when an agency is doing the job it was chartered to do. The CFPB should remain independent and encouraged to continue its work on behalf of all consumers.

Today Is No Different from Any Other Day: Your Efforts Matter.

By Kristin Lawton on 01/20/2017 @ 08:00 AM

Tags: News, Recommended Reading

You work hard every day to ensure that everyone in your community has a fair shot at getting ahead. But some days, it can feel like no matter how hard you try, progress is just too far out of reach.

For moments when you feel that way, we want to remind you that you can and do make a difference in the lives of low-income families, families of color and the millions of others who, if not for you, would be excluded from opportunities to get by and get ahead.

Not sure how you can make a difference? Here are three simple actions you can take today to help financially vulnerable communities achieve progress and prosperity.

  1. Join one of our advocacy campaigns. Taking 60 seconds to sign up will connect you with opportunities to protect and promote policies that ensure that all U.S. families have the skills, knowledge, access and protections they need to realize their financial dreams. Our four campaigns focus on the four areas in which we can achieve the greatest impact: protecting social safety net programs like AFI and VITA, flipping the tax code right-side up, strengthening protections for consumers and expanding affordable homeownership opportunities.
  2. Share your story to inspire others. Each of us are called to this work for different reasons. Take time today to reflect on what gives you hope and write down your personal story. Share your story on social media and in our Story Bank to inspire others.
  3. Chip in to advance our shared vision. Add your name to the list of people who are putting opportunity within reach by contributing whatever you can—even $20 can go a long way toward promoting prosperity. Unable to donate but looking for ways to help in your local community today? Print off a list of needs from a nearby food bank or shelter and spend the day with your family or friends collecting those items from neighbors or at a dollar store. Then, take a trip together to bring your collection to the community organization that needs your support.

Today is no different from any other day: your efforts matter. If you’re not convinced, we hope you’ll take one of the actions above or think about how you might support one of the thousands of organizations that do great work every day to promote prosperity and expand opportunity. By working together, there’s nothing we can’t accomplish.

From Talk to Action: What The Next Administration Can Do to Help Close the Racial Wealth Divide

By Emanuel Nieves on 01/19/2017 @ 10:00 AM

Tags: Federal Policy, Local Policy, News

This is it. 72 days after the 2016 Presidential election came to a surprising end, the inauguration of President-elect Trump is upon us. Despite the various feelings that may come with tomorrow’s inauguration, the peaceful transition of power will conclude in about 24 hours from now when President-elect Trump is sworn in as the 45th President of the United States.

Click the image to read the report.

Once the inaugural ceremonies conclude, President Trump and his team will face the difficult task of not only governing and leading a deeply divided country but also turning many of his pledges into reality. Given what we’ve learned during the campaign and since it ended, President Trump will be heavily focused on accomplishing much of what he’s laid out in his First 100 Days Agenda, which includes a number of ambitious and troubling items such as the undoing of a number of Obama-era executive actions as well as action to weaken the Affordable Care Act.

Given the real impact that a number of President Trump proposals will have on some of our most vulnerable individuals and families, CFED has been working diligently over the past several months to ensure that we’re ready to defend and strengthen affordable homeownership and safety net programs, consumer protections and tax policies that we view as instrumental towards building an opportunity economy that works for all. As a first step towards fulfilling this goal, this past September we released A Federal Policy Blueprint to Close the Ever-Growing Wealth Gap, which outlined a number of wealth-building, inequality-reducing, opportunity-expanding legislation and ambitious budget requests.

Today, as another step towards expanding economic opportunity for all, we’re proud to announce the release of a new publication—Administrative Actions to Close the Ever-Growing Gap (direct download here)—which proposes several ambitious administrative actions the Trump administration could enact to help solve the problems of financial insecurity and wealth inequality. These actions address seven issue areas:

  • Rainy Day Savings
  • College Savings
  • Affordable Homeownership
  • Retirement Savings
  • Financial Capability Services & Tax Preparation
  • Racial Wealth Divide
  • Persistent Poverty and Community Development

While each issue area outlined in Administrative Actions is critically important to building an opportunity economy that works for all, we wanted to highlight one in particular that builds off President-elect Trump’s commitment to taking a number of actions the moment he becomes President as well as his expressed interest in tackling the economic realities facing African Americans and other communities of color. This interest has been expressed through his ‘New Deal for Black America’ as well as through meetings with personalities such as Jim Brown, Ray Lewis, Kanye West, Steve Harvey and most recently Martin Luther King III. Thus, Administrative Actions presents the President-elect Trump with a singular action he can take during his First 100 Days to begin addressing the ever-growing racial wealth divide, which today amounts to households of color owning just a fraction of the wealth ($12,377) White households own ($110,637).

That action—which President Trump could take with just the stroke of a pen—is an executive action to authorize a government-wide audit to understand how current policies are affecting the racial wealth divide facing communities of color today. Given the role that federal policies have played in creating the racial wealth divide, understanding how current policies continue to shape the economic circumstances of communities of color is a necessary first step towards deliberately crafting policy solutions to close the divide.

As part of this executive action, President Trump should appoint a special advisor or ombudsman to coordinate the audit as well as advise him on unilateral actions he can take to address this pressing economic problem. To ensure the audit is as comprehensive as possible, President Trump should direct the ombudsman to make use of empirical tools that would quantify the economic impact of current federal policies and programs on the racial wealth divide.

In selecting these tools, the ombudsman should first look towards established methods, such as the Racial Wealth Audit framework co-developed by the Institute for Assets and Social Policy (IASP) at Brandeis University and Demos, which underpins a recent paper CFED and IASP co-published that assessed the impact that specific education policies would have on the racial wealth divide. In addition to these duties, the ombudsman should also assist in the development of a legislative agenda and public report that can increase public awareness of strategies that can reduce the government’s role in growing the racial wealth divide.

While the matters facing communities of color today might seem like an isolated problem only affecting a particular group of people, the changing demographics of our country tells us these problems will soon be relevant to everyone. In fact, according to recent research we conducted last year with the Institute Policy Studies, if nothing is done to lift up the economic opportunity of the children and their families now, the racial wealth divide will literally never close.

Once the inauguration ceremonies end and the focus shifts to governing, we hope that Administrative Actions provides President Trump with solutions that can turn his stated concern for communities of color and the places they call home into the actions needed to begin closing the racial wealth divide. By taking deliberate and substantial steps, President Trump can help to ensure that the racial wealth divide does not become a deeply ingrained feature of our future American life.

Congress Hears Your Voice! Making a Difference Through Effective Advocacy

By Arohi Pathak on 01/17/2017 @ 12:00 PM

Tags: Local Policy, Federal Policy, News

The 115th Congress is busy transitioning to a new Administration—one that has already prioritized the interest of the corporate sector over that of the working families who sent them to the White House. Over the past several weeks, CFED has engaged with state and local Network members from across the country to send the new Administration and Congress an important message: we need an opportunity economy that works for all, one that allows us the chance to build a more prosperous future for our families and communities.

As Congress focuses on vetting President-elect Trump’s cabinet nominations, our state and local members have shared numerous stories and data with their members of Congress, asking them to hold these nominees accountable for their policy priorities and perspectives, while ensuring that the needs of consumers, working individuals and families and communities are protected.

For example:

Ben Carson’s nomination as Secretary of the Department of Housing and Urban Development (HUD)

  • CFED shared stories with several Senators on the Banking, Housing & Urban Affairs Committee, showing the impact of HUD programs, such as Family Self Sufficiency (FSS) and housing counseling, which help families move toward self-sufficiency and independence. During the vetting of Dr. Carson’s nomination, we asked that Senators hold Dr. Carson accountable to protecting FSS, housing counselling and other HUD programs that help so many families build financial security.

Steven Mnuchin’s nomination as Secretary of Treasury

  • Mnuchin has made no secret of his interest in chipping away at Dodd-Frank, the CFPB and consumer protections. Additionally, while at OneWest, Mnuchin was responsible for racially discriminating against people of color, barring them from the opportunity to own a home and foreclosing on tens of thousands of families. Along with our Network members, CFED shared data, testimony and stories with Senators on the Senate Finance Committee to show how the foreclosure crisis and predatory mortgage practices impacted communities and families in their state. We’re hopeful that this information will inform and arm Senators as they ask questions during the confirmation hearing to better understand Mnuchin’s views on protecting consumers as well on a range of other issues.

Rep. Tom Price’s nomination as Secretary of Health and Human Services (HHS)

  • CFED shared stories and data with Senators on the Health, Education, Labor & Pensions (HELP) Committee to show how the Assets for Independence (AFI) program and other HHS programs help low-income families save for their future and move out of poverty. Our hope is that Senators vetting Rep. Price’s nomination will ask the Congressman how he plans to protect AFI and other programs to ensure continued investment in low-income communities.

These are your stories and your voices, and they are making a difference! In sharing your stories and data with Members of Congress, CFED has received great feedback about how this information will arm Members of Congress in:

  • holding nominees accountable during the vetting process
  • asking nominees tough questions about their priorities as leaders of key agencies over the next four years
  • holding nominees accountable over the next four years to protect consumers and communities

CFED’s top priority in 2017 is continued advocacy at the federal level to ensure that we protect and strengthen the hard work that so many of you have engaged in over the past decades to create an opportunity economy. Such engagement will allow the Network to be a strong and credible partner to federal policymakers, it will highlight the incredible work that so many of you do on a daily basis, and it will enable us to fight for priorities that help build economic opportunity and access for all.

As President Obama eloquently reminded us during the final speech of his presidency on January 10, 2017, change is only possible "when ordinary people get involved" and join forces to demand progress. Together, we can demand change and progress. Your voices are important for effective advocacy and they are being heard loud and clear. Over the course of this year, CFED will continue to engage you in other actions to ensure consumers and families are not left behind at the expense of corporations and financial institutions. We hope you’ll join us in these efforts as we work to build an opportunity economy that works for all.

Thank you to all those who have engaged with CFED and shared this information with us.

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