Financial Services

$aveNYC Evaluation: People Save, Lives Improved, More Please

May 17, 2013
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What if I told you that very poor people, living in the most expensive city in America in the aftermath of a massive economic collapse, were challenged to save $500 and not touch it for a year with the promise of a 50 percent bonus if they succeeded? Do you think that some of them would be able to do it? A few?

What would you think the impact of that small amount of money would be? Equally small? Would you think that sequestering those resources would make families more likely to go into debt? More likely to skip paying their bills?

Asset Building News Week, May 13-17

May 17, 2013
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The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include inequality, retirement, the workforce, and financial services.

Putting the Kibosh on Using Credit Checks in Hiring Decisions

May 14, 2013

Update 5/22/13: The original version of this post incorrectly used the term "credit score" in several places where "credit check" or "credit history" would have been more appropriate and accurate. The post has been edited to reflect that correction. Kevin Drum at Mother Jones has a piece that explains the process by which the credit reporting agencies deal with employee screening. Specifically, employers may request prospective employees' credit histories via a credit check, but these histories do not contain an actual credit score. Thank you to Greg Fisher at creditscoring.com for pointing out the error.

The use of credit checks to inform hiring decisions has been getting some much deserved scrutiny recently. Over the weekend, Charles Ellison for the Philadelphia Tribune and Gary Rivlin for the New York Times took a look at the practice of employers evaluating a job applicant's credit as part of the employment decision-making process. Ellison chronicles recent legislative efforts to curb the practice and points out that campaign finance data shows lawmakers are receiving sums of money from major credit reporting companies. Rivlin spoke with non-profit service providers and unemployed individuals who have experienced the negative effects of this phenomenon first hand.

On the surface, using credit checks as part of employment screening may seem like a simple, data-driven way for employers to ascertain a candidate's reliability. Upon closer inspection, however, using credit checks in this way is ineffective and exacerbates inequality.

Can Mobile-Enabled Savings Products Bridge the Youth Financial Services Gap?

April 29, 2013
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Editor's note: This post was authored by Julia Arnold, a Research Fellow with the Global Assets Project, and originally appeared on the Center for Financial Inclusion's blog.

Many of the challenges to saving faced by the world’s poorest people were highlighted in the recent Washington Post article Microsavings Programs Build Wealth, Pennies at a Time.  Among others, the article articulated two especially salient points around microsavings: 1) we know the poor save, and 2) savings can help poor people withstand shocks to their income (such as unexpected medical emergencies or job loss) without going further into debt and poverty. However, low-income people tend to rely on informal methods of savings, often putting their money at risk of being lost, stolen, or ruined by floods or rodents. Having a safe, reliable place to save is both beneficial to and desired by the world’s poorest people. 

Asset Building News Week, April 22-26

April 26, 2013
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The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include financial security, housing, gender equality, the safety net, and workforce and consumer protection.

The Other Shoe Drops on Payday Lenders

April 24, 2013
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As it turns out, consumer advocates might have underestimated the impact of payday loans on consumers. We have written pretty extensively about the debt trap or cycle of borrowing that short-term, high-cost loans have on consumers. We are now getting real data and first impressions are that it is worse than we thought. The good news is that federal regulators are poised to take action.

Asset Building News Week, April 15-19

April 19, 2013
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The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include housing, unemployment, financial products, taxes, and inequality.

Prize-Linked Savings 101

April 17, 2013

After our event on "prize-linked savings" yesterday, I sat down with Joanna Smith-Ramani of D2D and recorded a short podcast focused on the basics. What are prize-linked savings? Where did the idea come from? Can giving people prizes really help to induce more savings? What's happening with this idea now? You can listen to our conversation here:

Event Summary: Jackpot: Using Lotteries to Promote Personal Savings

April 17, 2013
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Yesterday we hosted an event along with our partners at the Doorways to Dreams Fund (D2DFund) to examine the potential of lottery-style programs and products to promote personal savings. The idea of “prize-linked savings” (PLS) emerged out of the observation that while many Americans enjoy playing the lottery or gambling, large numbers of us do not have the personal savings necessary to cope with an emergency. Researchers, advocates, and others in the field noted the existence of PLS programs in other countries and thought that a similar motivational tool could work in the U.S.--if saving was as much fun as playing the lottery, more people would participate. Pilot programs and legislative proposals have emerged to take this concept to scale in several U.S. states. You can watch a recording of the event here or read on for the key takeaways.

FREE Financial Advice for Justin Bieber's Fans

April 12, 2013
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Following in the footsteps of rap mogul Russell Simmons and being-famous moguls the Kardashian sisters, being-adorable mogul Justin Bieber has endorsed a pre-paid debit card.

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