Financial Services

Asset Limits and Financial Security: A Conversation on Twitter

August 28, 2013
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Yesterday, the Asset Building Program and ACCESS to Financial Security for All (an initiative of PolicyLink) engaged in a productive conversation on Twitter about the issue of asset limits. Check out the Storify summarizing the conversation below, or at this link.

Asset limits are simply caps on the amount of savings that applicants and recipients of public assistance programs may have to apply or receive support. While these limits were designed to ensure programs target only the most high-needs families and individuals, they ultimately serve as a disincentive to save. By restricting families from having as little as $1000 on hand for an emergency, these limits leave families more economically vulnerable in the long-run and less able to move out of poverty and off assistance. Furthermore, asset limits can add cost and administrative complexity to the benefits administration process, which reduces the efficiency of programs at the state and local level.

Guest Post: Youth Summer Paychecks: an Untapped Opportunity to Promote Financial Capability?

August 28, 2013
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Editor’s note: This post was authored by Vishnu Sridharan, Director of the Make Your Path (MY Path) Program at Mission SF Community Financial Center in San Francisco, California and a former member of the Global Assets Project at New America.

In 2012, San Francisco responded to President Obama’s call to provide increased opportunities for low-income and disconnected youth by launching a Summer Jobs + initiative that reached over 5,000 youth. In 2013, in collaboration with Mission SF Community Financial Center, United Way’s Matchbridge program, and Community Trust, a division of Self Help Federal Credit Union, San Francisco took its Summer Jobs + program to the next level by integrating Mission SF’s award-winning MY Path program. In doing so, the city became the first in the nation to incorporate not just financial education, but access to financial products, direct deposit and saving incentives, into its youth summer workforce system. This innovative collaboration—and its impressive impact on working youth—has generated important lessons for the fields of financial capability and asset-building, in particular demonstrating the power of workforce development programs as platforms for asset-building interventions.

Asset Building News Week, August 12-16

August 16, 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 jobs, income, housing, savings, and financial products.

Boosting Consumer Protections for Unbanked TANF Households

August 12, 2013
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A couple weeks ago, the New York Times featured a front page story about the vast numbers of Americans who are denied bank accounts due to minor transgressions like a bounced check or overdraft fee. As we discuss frequently in the asset building community, having access to a low-cost bank account is key to participating in the financial mainstream and avoiding the check cashing fees, high interest loans and other fringe financial services that contribute to the high cost of being poor – as powerfully illustrated in the article:

Mr. Korzeniowski, who acknowledges “he made a mistake [by overdrawing his account],” says the fees he pays for cashing checks, paying bills and wiring money cannibalize the paycheck he gets from part-time construction work. “Everything is more expensive,” he said.

Yet for participants in public assistance programs, the barriers to being “banked” go even further. Most fundamentally, many banks don’t cater to lower-income consumers; fees, minimum balance and direct deposit requirements can discourage many who hover near the poverty line from establishing an account. Furthermore, public assistance recipients are often subject to asset limits – as low as $1000 per family in TANF – that can deter saving or even maintaining a bank account.

Report and Event Highlight Consumer Financial Protection Bureau's Impact

July 18, 2013
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The Consumer Financial Protection Bureau (CFPB) has released their annual report on the work the agency is doing to "improve the financial literacy of consumers and initiatives to educate and empower consumers to make better informed financial decisions." As recently-confirmed CFPB director Richard Cordray explains in his introduction to the report, this is important work: "Empowering people to take more control over their economic lives is absolutely essential to [the CFPB's] mission. But consumers should not have to go it alone, without ready access to a trusted source of impartial and expert information about matters of consumer finance." The report goes on to detail the agency's financial education work, focusing on their efforts to support research on what strategies work well to promote the financial knowledge and skills of average Americans, as well as on their outreach efforts to particularly vulnerable groups.

Earlier this week, a group of asset-building practitioners and policymakers, consumer advocates, and long-time supporters of the CFPB gathered for a policy forum looking at the impact the agency has had thus far. Organized by CFED and Democracy Journal, the forum featured Massachusetts Senator Elizabeth Warren, who is widely acknowledged to have laid the visionairy groundwork for a federal agency capable of regulating the financial services marketplace. In her remarks (watch a recording here), Senator Warren noted how rising expenses and stagnant incomes have squeezed America's middle class - while the consumer credit market was able to thrive. The timing of the event - just one day after the U.S. Senate confirmed the CFPB's director - was perfect. Getting to this point has been, as Warren put it, "a tough fight." To audience chuckles, she undertoned, "Boy, that was the understatement of my life..."

Senator Warren and the panelists that followed her were able to point to some impressive accomplishments from the CFPB.

Asset Building News Week, June 24-28

June 28, 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 the Supreme Court decisions, SNAP, and financial services.

Asset Building News Week for June 10-14

June 14, 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 racial inequality, retirement, food security, and financial services.

Asset Building News Week, June 4-7

June 7, 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, health and wealth, financial services, and unemployment.

Financial Inclusion and Access within the Latino Immigrant Community

June 4, 2013

The National Council of La Raza (NCLR) hosted an event today to release “Latino Financial Access and Inclusion," a new report that examines the relationship between comprehensive immigration reform and household financial stability for U.S. Latinos. At the event, experts from NCLR, Citi, the American Bankers Association, and a Chicago-based organization, The Resurrection Project, explored the report's findings on financial inclusion within the Latino immigrant community. The report analyzes data from a survey of roughly 1,000 low-income Latino-identified individuals across California during 2012.

Janet Murguía, President of NCLR, began the event by discussing the historical exclusion Latino immigrants have faced in the mainstream financial services marketplace. Despite myriad barriers to accessing financial services and some significant economic challenges, this report found that Latino consumers were actively prioritizing saving, utilizing a range of financial products to meet their needs, and displaying savvy engagement with financial service providers.

The report also builds the case for comprehensive immigration reform and ensuring a path to citizenship by demonstrating the variance in financial stability and engagement by citizenship status. For example, among immigrants who had been in the U.S. the same amount of time, naturalized citizens were more likely to be engaged in the mainstream financial services sector than their non-citizen counterparts. As Murguía put it, U.S. citizenship opens the doors to not only better job opportunities and education, but also greater financial inclusion. When combined, these resources create a path to upward economic and social mobility. Thus, the report explicitly frames citizenship status as an asset and calls for the current immigration reform conversation to better reflect the economic needs and opportunities of the Latino immigrant community.

Americans Struggle to Rebuild Wealth, Savings

June 3, 2013

Americans have rebuilt only 45 percent of the wealth they lost in the Great Recession, according to the Washington Post and a new report from the Federal Reserve Bank of St. Louis.

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