Building A Lifetime of Financial Security

The Indiana Assets & Opportunity Network (Indiana A&O Network), a statewide asset-building coalition, is planning four lunch-n-learns across the state to discuss concepts from What It's Worth, a book about strengthening the financial futures of families.

The Indiana A&O Network has commissioned a videographer and animator to produce a 20 minute video to show at the beginning of the events to encourage open and honest discussions about financial instability and local solutions to economic mobility barriers for families in Indiana.

Indiana House Members Vote to Roll Back Wall Street Reform

Today, 7 out of 9 members of the Indiana House delegation voted to undo consumer protections put in place after the financial crisis to guard against future economic crashes and bailouts. The legislation in question, the so-called Financial CHOICE Act, passed the U.S. House of Representatives by a vote of 233-186.

“We just don’t understand it,” said Kelsey Clayton of Indiana Assets & Opportunity Network. “Elected representatives  are supposed to stand up for Indiana communities but instead they decided to support legislation that explicitly protects payday lenders, cripples the government watchdog, and allows banks to go back to doing the same kinds of deals that forced us to bail them out."

On One-Year Anniversary of Payday Rule, Congress Hard at Work Protecting Payday Lenders

June 2, 2017 – One year ago today, the Consumer Financial Protection Bureau (CFPB) issued a draft rule aimed at reining in the worst abuses of payday, car title and other high-cost debt trap lending schemes. While these protections are sorely needed in Indiana, where such loans carry APRs reaching 391 percent and many borrowers become trapped in a cycle of debt, Congress is actively working to protect payday lenders.

Specifically, the U.S. House of Representatives will soon vote on the so-called Financial CHOICE Act, which would essentially undo all of the consumer protections put in place after the Great Recession and bank bailout.

Want to get Paid to Save for College? Start a Children's Savings Account

Education level has long been closely associated with economic outcomes and a college degree in particular is seen as an indiscriminate vehicle of economic mobility. While the U.S. Census Bureau finds that a young adult working full time with a high school diploma makes more than an equivalent young adult working full time without a high school diploma ($30,000 a year vs. $25,000 a year respectively), a young adult with a bachelor's degree will, on average, make $49,900 a year. This dramatic wage difference means that a typical American with a bachelor's degree will make 66 percent more in lifetime earnings than the typical American with only a high school diploma.

The Bard Prison Initiative-Offering College Degrees in Prison

In the United States 650,000 inmates are released from prison every year-nearly 68 percent of them are rearrested within three years of release. Although studies have largely found that employment has a significant effect in reducing the recidivism rate, or the rate an ex-offender relapses into criminal behavior, low reading and technological literacy levels and the stigma of being an ex-offender in the eyes of potential employers, largely prevents ex-offenders from getting a job. Initiatives, such as Ban the Box which encourage public and private employers to remove the check box from their hiring applications asking if applicants have a criminal record, do help destigmatize an ex-offender’s criminal history. Unfortunately many states do not widely acknowledge these initiatives including Indiana, which recently passed SB 312: a bill that prevents municipalities from enacting Ban the Box ordinances. Fazed out of the job market, ex-offenders are often left with no other choice but to return to crime to provide for themselves and their families.

Hundreds of Hoosiers Swindled By Experian Credit Scam

Indianapolis, IN – Thanks to complaints from 43,000 consumers around the country - including over 450 from Indiana consumers - the Consumer Financial Protection Bureau (CFPB) investigated and shut down a nationwide credit score scam that tricked Americans out of their hard-earned dollars by marketing and selling credit scores that they claimed were used by lenders to make credit decisions. In truth, lenders did not use those credit scores when deciding whether to make loans. The CFPB also hit the company with a $3 million civil penalty.

Policy Update: Payday Sees Another Defeat, but Indiana Congressmen Challenge Recent CFPB Rules

Indiana saw another close call on predatory lending in the General Assembly, but may face a challenge in Congress on loosening limits on prepaid cards. The payday lending industry attempted a late-in-the-game adjustment to Indiana’s uniform consumer credit code last Monday, March 20th. The language they proposed would have allowed lenders to charge a .395 percent daily “customary fee” to offset the cost of origination, ability-to-repay determinations, and so on. This could have been layered onto the 25 percent interest rate allowed under the statute, bringing the total possible APR up to 169 percent. This proposal was also unusual in that it was not within the statute governing small loans (a.k.a. payday loans), but instead was in the section of code that applied to all forms of open- and closed-ended installment lending. Fortunately, the amendment was not offered thanks to opposition from consumer advocates and members of the House committee in which it would have been heard.

The Health and Wealth Connection

A recent webinar hosted by the Asset Funders Network (AFN) entitled The Health and Wealth Connection: Opportunities for Investment Across the Life Course, explored several variables that when combined, create the social determinants of health. These variables are socioeconomic status, education, physical environment, employment, social support networks, and access to healthcare, which all factor into a community’s overall health. The webinar described this equation simply as “health happens where we live, learn, work, and play.”

Although health is commonly perceived to be confined within doctors’ offices and hospitals, the social determinants of health indicate that health happens everywhere. In fact, access to healthcare is the last step, and least critical, in determining the overall health of a community. 

Network Rallies to Help Stop Payday Expansion

This month at the Indiana Statehouse, Assets & Opportunity Network partners helped spearhead the defeat of SB 245, a bill to authorize new, longer term predatory loans with high interest rates. The bill would have allowed a borrower to take out up to a $2,500 loan at 240 percent APR and repayment terms of 24 months. The bill was amended to a cap of 18 months, $1,750, and 216 percent APR. Nineteen opponents testified against the bill, representing credit counselors, former payday borrowers, non-profit organizations, religious leaders, a former payday loan company employee, veterans’ groups, and more. The bill was defeated in a 4-5 vote. Please help us thank Senators Bray, Melton, Mrvan, Ruckelshaus, and Walker for their key votes to help protect Indiana families.

Day Without Immigrants

On February 16th, hundreds of Indiana residents joined demonstrators across the country in a national strike and participated in a "Day Without Immigrants" in protest against President Trump's recent efforts to crack down on illegal immigration. Demonstrators opted to stay home from school, work, and even temporarily closed their businesses for the day in order to show unity with their friends, family members, coworkers, and employees who immigrated to the United States. By not participating in their regular routines, demonstrators hoped to show how immigrants directly contribute towards the lifestyles of American consumers through the goods they produce, services they provide, and jobs they create. 

CFPB, Payday Lending, and a Coalition United

When Republicans decidedly won all three branches of our federal government on Election Day, many of us were left contemplating what will become of the progress we have made in the last eight years, and where our efforts should be applied going into the future. To east anxiety and begin strategizing, the Indiana Assets & Opportunity Network hosted a conference call on January 27th in order to discus the changing political landscape which may affect our collective mission to increase asset acquisition for low-wealth Hoosiers.

Policy Update

The Indiana General Assembly is back in action. Two bills that would expand access to the Supplemental Nutrition Assistance Program (SNAP) received hearings in the Senate Committee on Family and Children’s Services on Monday, January 23rd. The first, SB 9, would eliminate the lifetime ineligibility of individuals who have served time for a felony drug conviction. It passed out of the committee 8-1.

The second bill, SB 154, would remove one of the two tests of eligibility for SNAP access – an asset test that requires households to have less than $2250 in countable resources to be eligible. Kathleen Lara, Policy Director of Prosperity Indiana, testified in support of the bill, noting that one of the unintended consequences of the asset test is that families receiving or considering receiving benefits might choose not to participate in mainstream financial products, like checking and savings accounts. Removal of the asset test in other states has resulted in increased bank account ownership among SNAP households and increases in average savings amounts in those accounts.

The Indiana Assets & Opportunity Network's Expert Directory is now Live

The Indiana Assets & Opportunity Network is pleased to announce that the Expert Directory is now live! All data and profiles came directly from a survey sent to Network partners in early December asking for their levels of expertise in various subject matters and fields. There are 35 different areas of expertise, including savings accounts, financial services and products, public benefit programs, VITA service delivery, public policy, housing, education, marketing and communications, and research and data collection. To view the Expert Directory, please follow the link below:

http://www.indianaopportunity.net/expert-directory-1/

The Importance of Highly-Skilled Immigrants to the American Economy

Many research institutions, law firms, banks, and other industries in the United States are desperately in need of qualified and highly-skilled employees. Positions, such as doctors, engineers, lawyers, scientists, and bankers, are critical in driving the United States economy and providing essential services to its citizens, but also lay the ground work for the United States economic future due to the value of research and development. Unfortunately, there is a void of capable candidates due of rising costs to secondary education and increasingly strict immigration laws causing these crucial positions to remain vacant. Without adequate public investment for native citizens to obtain the advanced degrees necessary to fill high-skilled positions, the United States must create policies that better utilize and encourage immigrants to participate in its economy.

Indianapolis Financial Capability Pilot Gains Momentum

Prosperity Indiana is pleased to announce an award of $30,000 from The Glick Fund, a fund of Central Indiana Community Foundation (CICF), to support the Indiana Assets & Opportunity Network (Indiana A&O Network) in establishing its Financial Capability Learning Cluster.

The Indiana A&O Network is a statewide coalition aiming to increase asset acquisition for low-wealth Hoosiers and to strengthen local economies through policy advocacy and capacity building, in partnership with local organizations and coalitions. Founded in 2014, the Indiana A&O Network has identified a lack of access to financial planning resources as a major obstacle to achieving financial stability. Integrating financial capability - understood as knowledge + skills + access - into existing programs may be the best way to provide the needed intervention.
 

An Inclusive Lens

"If you work hard and play by the rules, you shouldn't be poor." You may have heard this from our current president over the last eight years, and likely a similar version from President Clinton; but what is this statement really saying? We pondered this question during our final 2016 steering committee meeting with a senior fellow, Mary Waller from Topos Partnership. Topos Partnership develops framing strategies using cognitive and social sciences utilizing familiar methods of public opinion research and communications. Margy joined us to discuss how to reframe our language when disusing policy, specifically around poverty and low-wage work. 

We learned there are three lenses through which we can frame our conversations: sympathy, economy, and community lenses. How are they different?

Tis The Season! To Start Contributing to a Loved One's 529 College Savings Plan

One of the major obstacles preventing children, especially children of lower-income families from obtaining higher education is the belief that it is out of their reach. In order for these children to form a "college bound" mentality, a savings account with as low as $1 can be all it takes. Studies show children with college savings of $500 or less are three times more likely to attend college and four times as likely to graduate compared to their peers without any college savings. 

Marion County Votes YES on Question Two; Approves an Added Income Tax to Invest in Local Transit System

Last November Indianapolis residents voted for more than presidential and congressional seats; they also voted for the nation’s first income tax investment for public transit. Referred to as Question Two, residents overwhelmingly supported the referendum which paves the way for the development of the Marion County Transit Plan and improves the county’s IndyGo bus service. The increased income tax will be up to 25 cents per $100 of taxable income for all Marion County residents. The tax increase will help by extending IndyGo’s hours of operation, increasing the number of bus routes that run in 15-minute frequencies, running every route seven days a week, and creating three rapid-transit lines which run more often and make fewer stops. A City-County Council vote will make this a reality.

Why Indiana's Mandatory K-12 Personal Finance Education is not the Silver Bullet in Improving Financial Literacy

After the Great Recession, Indiana sought to prevent future catastrophes by mandating financial literacy instruction in schools. Is this a reasonable approach, and what policies can the state look at to ensure more Hoosiers have the information they need to make sound financial decisions?

A generation or two ago, many working families had fewer financial decisions to navigate. They received health insurance and pensions through their employers, and banks offered a more limited range of mortgage products. Within the changing world of both work and finance, more and more options have been placed in the hands of consumers who frequently struggled to assess them. When the mortgage crisis hit, household financial decision-making received a new level of scrutiny, and surveys uncovered that not only were many adults in the U.S. ill-equipped to make basic financial decisions, but they also believed they were more capable than their performance on the test questions suggested. While personal finance education has been promoted for many years prior to the crisis, it received a boost through new federal programs and states requirements to add personal finance classes or content to the mandatory K-12 curriculum. The logic is certainly compelling: if well-educated about financial decision-making, individuals will be better equipped to navigate a world that increasingly places important financial decisions about things like insurance, borrowing, saving, and investing in the household's hands. The key question is, does it work?