CFED Network

A&O Network Blog

News & Updates from the Assets & Opportunity Network


Department of Defense Proposes Expanded Consumer Protections for Servicemembers

Posted by lmullany on 10/28/2014

Carol Ashley
Shriver Center

At the end of September the Department of Defense (DOD) announced proposed changes to the Military Lending Act (MLA) that, if implemented, will expand financial protections for servicemembers and their families. Since its enactment in 2006, the MLA has protected servicemembers and their dependents from ultra high interest rates of over 36 percent on short-term, small dollar loans.

When it originally drafted the MLA, DOD narrowly defined the types of loans covered by the act and excluded credit cards, overdraft loans, military installment loans, and all forms of open-end credit from coverage. In practice this meant that the MLA covered traditional payday loans, car title loans, and refund anticipation loans but allowed companies to tailor loan characteristics to fall just outside the parameters and evade the restrictions.

The DOD has now moved to close these loopholes by expanding the types of loans covered by the 36 percent interest rate cap to these commonly used products and, in doing so, preventing or at least slowing down predatory financial institutions from literally taking money right out of the pockets of our servicemen and women and their families.

The movement to protect servicemembers from cycles of debt caused by high-interest loans gained recognition as the military barred a growing number of servicemembers from duties overseas for financial reasons. Pressure from different military communities across the country motivated the DOD to research predatory lending practices on a national scale. The resulting report, released by the DOD in 2006, documented increased numbers of lender locations around military bases, an online presence catering to military families, and company names implying official military affiliation. It also found that young servicemembers with job security, a steady paycheck, and little financial literacy offered loan companies a low-risk, high-reward target for loans with interest rates as high as triple digits. Lenders even reportedly offered referral rewards for military members as well as threw ‘loan parties.’ The DOD report concluded “predatory lending undermines military readiness, harms the morale of troops and their families, and adds to the cost of fielding an all-volunteer fighting force.” The report led to the inclusion of the MLA (H.R. 5122, Section 670) in the John Warner National Defense Authorization Act of 2007.

Although Congress aimed to strike a balance between protecting servicemembers from burdensome debt and maintaining adequate sources of healthy credit, when it came into effect in 2007 the MLA fell short in scope. The 36 percent interest cap applied specifically to tax refund loans, other loans of less than $2,000 and a term of less than 90 days, and auto loans with a term of less than 180 days. Consequently, lenders began offering payday loans of $2,001 for over 91 days and auto title loans longer than 181 days, a particularly easy transition for online lenders and lenders in states where high cost loans are not prohibited. By only slightly changing loan terms, creditors continued to successfully target servicemembers, trap them in repeat borrowing, exploit the use of allotments, and fail to provide buyers with adequate information for an informed decision.

Under continued pressure in the face of stories of damaging debt accumulated as a result of legal technicalities in the MLA, the DOD has now proposed to expand regulations to ensure military families more complete consumer protections. The proposed 36 percent interest rate cap would apply to all forms of payday loans, vehicle title loans, refund anticipation loans, deposit advance loans, installment loans, unsecured open-end lines of credit, and credit cards. Additionally, the regulations would hold creditors responsible for providing military borrowers with additional disclosures, prohibit creditors from requiring servicemembers to submit to arbitration, and put the burden of determining military status on the creditor instead of the borrower.

Take Action

While it is hoped that these changes will bring needed protections to servicemembers and their families, they leave veterans and civilians unprotected from the same exploitative lending practices. The Consumer Financial Protection Bureau (CFPB), which enforces the MLA, has suggested that the protections of the MLA be extended to veterans and citizens and continues to emphasize financial education as an important component of reform. This past month, IABG, on behalf of its members, joined organizations across the country in sending a letter to the CFPB that encourages a strong rule that will stop the debt trap and end abusive payday, car title and installment loans for all families. You can make your own voice heard by signing our petition to the CFPB today.

MacKenzie Speer, an Americorp VISTA at the Shriver Center, contributed to this blog post.

Permalink | Comments () | Main Page | New Post


Recognizing National Save for Retirement Week

Posted by tedwards on 10/28/2014

This is National Save for Retirement Week, a national effort to increase personal financial literacy and raise public awareness about the importance of saving for retirement.[1] This week provides an opportunity for employees to reflect on their personal retirement goals and determine if they are on target to reach those goals. Southern Bancorp believes that building net worth is one of the best ways to ensure a strong financial future, which is why we’re so big on promoting the benefits of getting started saving for retirement now.

Of course, this is easier said than done.

Research shows Arkansans and Mississippians are not saving at high rates, let alone adequately saving for retirement. According to CFED, the asset poverty rate is defined as the percentage of households without sufficient net worth to subsist at the poverty level for three months in the absence of income, whereas liquid asset poverty is not having sufficient liquid assets, such as cash in bank accounts and equity in stocks, mutual funds and retirement accounts, to subsist at the poverty level for three months. Arkansans and Mississippians do not fare well in either category, indicating most households are not appropriately saving for retirement.

A contributing problem for many folks in Arkansas and Mississippi is they simply don’t have the opportunity to save in a tax-sheltered retirement account because they lack access to a 401(k). In fact, according to the Employee Benefit Research Institute, only 39.2 percent of Arkansas workers and 41.4 percent of Mississippi workers ages 21-64 participate in an employer-based retirement plan.[2]

Today, a retiree beneficiary turning 65 can expect Social Security to replace approximately 30 percent to 50 percent of preretirement income, depending upon his or her earnings history. Consequently, if workers hope to maintain their preretirement standard of living, they may need other sources of income in retirement to supplement their Social Security benefits, as Social Security was not designed to match that standard for all workers.[3] Thus, saving for retirement is imperative to the future economic security of one’s family. With longer life expectancies and rising costs, it is critical that Arkansans and Mississippians understand the consequences of the need for and benefits of saving for their future.

So what should one do to save for retirement if he or she doesn’t have the option to save in an employer-based retirement plan? There are several options at different levels:

  • Individual: Even if one does not have access to a 401(k) plan, an individual can use a variety of different savings vehicles to prepare for retirement. The IRS provides a detailed list of all types of retirement plans here.
  • State policy: While states cannot mandate that every employer offer a 401(k) plan, they can support increased savings through other means. Presently, Illinois State Senator Daniel Biss is working on legislation to provide automatic IRAs to workers earning $30,000-$100,000 annually that do not have access to an employer-based retirement plan. Arkansas and Mississippi could each consider introducing similar bills in their upcoming legislative sessions.
  • Federal policy: In late 2014, the U.S. Department of the Treasury will begin offering myRA to help with financial stability during retirement.

Retirement savings is an important part of the larger financial strength picture. At Southern, we’re working to find unique ways to help families create economic opportunity, and ensuring a sound financial retirement is a good place to start for many.

For upcoming webinars and previously recorded webinars on saving for retirement, please visit To learn more about Southern’s efforts to create economic opportunity in rural areas, please contact Meredith Covington, Policy & Communications Manager, at

[1] Senators Gordon Smith (R-OR) and Kent Conrad (D-ND) established National Save for Retirement Week in 2006. It’s held every year during the third week of October.

[2] The participation rate increases for full-time, full-year wage and salary workers – up to 47.6 percent for Arkansas, 50.4 percent for Mississippi.

[3] Copeland, Craig. (2012). Employment-based retirement plan participation: Geographic differences and trends. Employee Benefit Research Institute. Available at

Permalink | Comments () | Main Page | New Post


NV Kick Start "2nd Annual Opportunity Alliance Family College Night"

Posted by nbrown on 10/22/2014

October 22, 2014 - Reno, NV – More than 70,000 Nevada public school kindergarten and 1st grade students now have a college savings account thanks to the continuation of the Nevada College Kick Start Program.

Starting in 2013, the College Kick Start Program has deposited $50 into an account in the name of each Nevada public school 2013-15 kindergarten student to help them save for college.

On October 29, kindergarten and 1st grade students have a chance to add another $50 to their Nevada College Kick Start accounts when they attend the 2nd Annual Opportunity Alliance Family College Night, Wednesday, October 29, 2014, 5-7pm at the Joe Crowley Student Union on the campus of University of Nevada, Reno.

Thanks to generous support of the Corporation for Enterprise Development’s 1:1 Fund, each person who opens a new SSgA Upromise 529 college savings account for an eligible Kindergarten or 1st grade student during Family College Night will earn an extra $50 in their existing College Kick Start account. Attendees also have the chance to win a $529 college savings account through generous a donation by the Nevada State Treasurer’s Office.

Nevada State Treasurer, Kate Marshall, established the Nevada College Kick Start program in 2013, the first statewide children’s savings account program in the nation. “Studies have shown that children who know they have a college savings account in their name are 7 times more likely to attend an institution of higher learning. Even a small amount of savings improves a child’s determination and preparedness for college and higher education, regardless of family income, ethnicity, or the educational attainment of the child’s parents,” commented Marshall.

Family College Night is free and open to all Washoe County School District students and their families. Information about other college savings options will be available at the Family College Night. Free dinner, with ice cream provided by Model Dairy, and kids activities will be available. Family College Night includes free transportation, provided by the Boys and Girls Club of Truckee Meadows, to and from the event from the following select schools, beginning at 4:30 PM until 7:30PM:

Additional information about Family College Night is available through all Washoe County School District schools, their counselors, Principals and kindergarten class teachers. Information about Corporation for Enterprise Development can be found at

Permalink | Comments () | Main Page | New Post


Building a Housing Trust Fund for Mississippi & Sustaining One in Arkansas

Posted by tedwards on 10/21/2014

As a Community Development Financial Institution (CDFI), Southern seeks to support efforts focused on housing availability and accessibility for low- and moderate-income families in both Arkansas and Mississippi. We do so because of our belief that affordable housing is paramount to financial stability and strongly correlated to an individual’s ability to save money and achieve economic independence.

Hardworking Arkansans and Mississippians should be able to afford decent housing and still be able to pay for basics, like groceries, child care and medicine. Yet, despite numerous legislative efforts, decent affordable housing is still out of reach for too many Arkansas and Mississippi families. There is, however, a possible solution.

Housing trust funds (HTF), state structures that provide funding for the construction, preservation, and acquisition of affordable housing, can help solve the problem. Presently, Arkansas has a HTF, but does not have a dedicated funding stream; Mississippi does not have a HTF. In the United States, 48 states and the District of Columbia have HTFs, majority of which have revenue commitments.[i]

In 2009, Housing Arkansas, the state’s housing coalition focusing on providing affordable housing for low-income Arkansans, to pass the Housing Trust Fund (HTF) legislation. Southern participated in the effort to establish an HTF, though the HTF did not receive funding until 2013, and then received only in a one-time installment of $500,000. Funding the HTF was an initiative of the Legislative Taskforce on Reducing Poverty and Promoting Economic Opportunity, of which Southern is part. Housing Arkansas currently seeks at least $15-18 million per year for housing that is affordable to families earning a range of incomes at or below 80 percent of the median household income.[ii] Its goals are:

  • To provide a flexible source of funds for communities to address housing needs;
  • To help families build wealth and economic stability;
  • To revitalize distressed neighborhoods and build healthy, vibrant communities by developing high quality affordable housing;
  • To leverage additional private investment in Arkansas communities; and
  • To contribute to economic growth by increased housing, employment, and tax revenues.[iii]

In 2013, Housing Mississippi, of which Southern is part, worked to pass the Mississippi Affordable Housing Trust Fund bill to establish a HTF to expand affordable and safe housing opportunities for children, seniors, persons with disabilities, and veterans. While the bill died in committee, it had the following objectives:

  • To mend the gap in the state’s ability to build affordable housing through dedication of permanent revenue sources;
  • To promote homeownership, prevent homelessness, and produce and preserve affordable housing for low to moderate-income individuals and families;
  • To promote accessible housing for disabled persons, down-payment assistance for eligible homebuyers, housing and foreclosure counseling, and technical assistance for nonprofit housing organizations this bill.

Both coalitions are currently working with advocates and their state legislators to introduce new bills to achieve their goals in the 2015 legislative sessions. Southern will continue supporting and working with both coalitions to advocate for greater and committed funding in Arkansas for its HTF and the establishment of a HTF in Mississippi. Southern is seeking to create new economic opportunities and improve net worth in its markets. Homeownership is a proven driver of these goals. We invite you to learn more about our efforts to improve the economic security of rural communities and the people who live there by contacting Meredith Covington, Policy & Communications Manager, at

[i] CFED. (2014). Available at

[ii] Housing Arkansas. Available at

[iii] Ibid.

Permalink | Comments () | Main Page | New Post


School funding in Mississippi still down $623 per student since before recession

Posted by esivak on 10/21/2014

A new report from the CMS 2014 Ed Reportenter on Budget and Policy Priorities shows that Mississippi ranks among the worst in the country in depth of cuts to school funding since the start of the recession. These unnecessary cuts weaken our schools and could make it harder for the next generation of American workers to compete for highly skilled jobs in the global economy.

Mississippi has cut investment in K-12 schools by 12.3%percent since 2008, a deeper cut than most other states. States need to invest in their schools, so that children can receive the education they need to succeed in life and compete for highly skilled jobs in tomorrow’s global economy.

State revenue declined sharply during the recession. Yet, even as revenues have begun to recover, Mississippi has only restored a small fraction of the education funding that was cut during the downturn, leaving spending per student $623 below pre-recession levels, taking inflation into account.

Mississippi lawmakers are now discussing the possibility of a tax cut for the coming year. A tax cut that reduces revenue available for education would take Mississippi in the wrong direction. According to the report, six of the seven states with the deepest education cuts have recently enacted corporate and/or personal tax cuts.

Reducing investment in schools has long-term economic consequences. Quality elementary, middle, and high school education provides a crucial foundation that allows children to go on to succeed in college and in the workplace.

Read the full report at

Join the conversation about education in Mississippi at the MEPC 2014 Policy Conference: Tackling Persistent Poverty – Why Here? Why Now?

Permalink | Comments () | Main Page | New Post


Money Well-Spent: Requiring a Personal Finance Course for High School Graduation

Posted by tedwards on 10/20/2014

In a national survey, only 33 percent of adults over the age of 50 could correctly answer three questions testing basic knowledge of interest rates, inflation and financial markets.[i] And despite the widespread advertisement and usage of credit cards by young adults, only 48 percent of high school seniors know that paying only the minimum balance each month will result in higher finance charges than paying the full account balance.[ii] This data underscores what Southern has found as it works to create economic opportunities and improve net worth. Households with low levels of financial literacy tend to borrow at high interest rates, acquire few assets, and not plan for retirement.[iii] Further, lack of financial knowledge is especially acute among young adults. This lack of financial knowledge is often tied to financial insecurity, and often stressful situations in which families do not have enough money to meet daily expenses and/or plan for the future. At Southern, we believe this is a problem, with a very reasonable public policy solution.

A growing body of research has revealed that financial education in schools can have a significant impact on encouraging healthy financial behaviors later in life. For example, college students from states that require a mandatory financial education course as a condition of high school graduation are more likely to create and adhere to a budget and less likely to engage in risky credit behaviors.[iv] Requiring financial education to be taught in high school is important as there is a strong correlation between high levels of educational attainment and increased financial market participation and decreased chances for bankruptcy, foreclosure, or loan default. Further, it is greater general education that drives changes in savings or investment behavior, rather than increased labor earnings.[v]

In Arkansas, the percentage of financially insecure households is higher than the national rate. Arkansans have a very low savings rate – more than half (51.9 percent) of Arkansas households live in liquid asset poverty, meaning they cannot subsist at the poverty level for three months in the absence of income. In addition, over a quarter (28.1 percent) of Arkansas households are classified as underbanked, signifying the use of high-cost credit from service providers outside the financial mainstream.[vi] There is good news for the Natural State, however. Arkansas currently has content standards for high school personal finance courses, but the bad news is that the state does not require students to take a personal finance course.[vii]

Presently, twenty-eight states in the U.S. have implemented personal finance courses in their high school curricula, including bordering states Missouri and Texas. In the 2013 Arkansas Legislative Session, Rep. Duncan Baird introduced a bill advocating for economic literacy and personal finance education in Arkansas public schools. The bill died, but it did not contain an implementation plan for high school personal finance education. For the 2015 Arkansas Legislative Session, Arkansas policymakers must look at the benefits of programs that increase financial literacy as a means to improving financial decision-making. The more Arkansans that are self-sufficient and financially stable, the less of a need for public benefit and income support programs.

Providing a basic financial foundation for high school students is imperative for their future financial success and stability. Arkansans need to be well-equipped to make informed financial decisions for themselves and their families to achieve economic security. As a Community Development Financial Institution (CDFI), Southern is committed to continuing financial education and improving financial stability through our personalized credit counseling and group financial education programs. We invite you to learn more about our efforts to create economic opportunities for people in rural communities by contacting Meredith Covington, Policy & Communications Manager, at

[i] Harnisch, T. (2010). Boosting financial literacy in America: A role for state colleges and universities. Perspectives. American Association of State Colleges and Universities. Available at

[ii] Jump$tart Coalition for Personal Finance Literacy. (2008). 2008 Survey for personal finance literacy among students. Available

[iii] Cole, S., & Shastry, G.K. (2010). Is high school the right time to teach savings behavior? The effect of financial education and mathematics courses on savings. Department of Economics, Wellesley College. Available at

[iv] Gutter, M. (2009). Financial capability of college students from states with varying financial education policies. National Endowment for Financial Education. Available at

[v] Cole, S., Paulson, A., & Shastry, G.K. (2013). Smart money? The effect of education on financial outcomes. Harvard Business School. Available at

[vi] CFED. (2013). Assets and Opportunity Scorecard. Available at

[vii] CFED. (2012). Financial education in schools. Available at

Permalink | Comments () | Main Page | New Post


Updates From Louisville

Posted by tlentz on 10/16/2014

It has been a little while since we posted new information - but that doesn't mean we've been sitting on our laurels! In August, Bank On Louisville celebrated its 4th Anniversary with 100 of its closest friends who came to help celebrate our successes. Since launching in 2010, the BOL partners have worked together to connect 16,143 unbanked individuals to new accounts. Seventy-percent of those accounts remain open with an average quarterly balance of $1,283. In addition, over the last year 12 of our partners helped to provide financial education to 6,532 participants.

At that event we also launched our new Bank On Louisville app, providing users with guides to financial education and to banks and credit unions near them. To try out the app on your mobile browser go to

In September, LMCS participated in a pilot and provided feedback on CFED's Financial Capability Integration Toolkit. Components of the toolkit were demonstrated to 50 social service providers representing 35 area nonprofits.

And this month we will be holding a demonstration workshop on our new "Credit As An Asset" workbook. This new workbook is for people who want to gain new information and tools to build or rebuild good credit. Thanks to CFED for their support in this effort and to CBA (Credit Builders Alliance) for their guidance.

Permalink | Comments () | Main Page | New Post


Fifth Third Bank's E-Bus Tour Kickoff at Crisis Assistance Ministry

Posted by rlynch on 10/14/2014

On October 2, 2014 Fifth Third’s E-Bus Tour kicked at Crisis Assistance Ministry in partnership with The Urban League of Central Carolinas. The E- Bus was staffed by counselors from our friends at Alliance Credit Counseling, and Community Link who were able to bring resources to the citizens in our communities who are often times under served. Participating in this project allowed Crisis Assistance Ministry to be a part of providing opportunities for families to educate themselves on how to make informed financial decisions and access sound financial products that give people the opportunity to be financially secure. By fostering best practices around financial stability we seek to alleviate poverty within our communities.

Fifth Third’s E-Bus staffed by their community partners were able to provide an array of services including:

• Speak with credit counselors to get private education on their personal finances

• View credit reports and credit scores

• Receive money management and budgeting tips

• Get information on affordable home loans and refinancing and much more

For the kickoff, Fifth Third Bank:

• Served More than 100 visitors

• Conducted 96 free credit counseling sessions

• Provided 4 Job-seeker Toolkit referrals

• Completed 24 banking follow-up appointments

Below you can check out information on the organizations that helped bring this great opportunity to customers of Crisis Assistance Ministry and Urban League of Central Carolinas. To learn ore about these organizations click on their respective link below






Permalink | Comments () | Main Page | New Post


Get Banked!

Posted by acoday on 10/13/2014

Tags: Get Banked, Win-Win, Qualified Referrals, Relationship and Communication Accountability

Bank On Seattle-King County is a major public-private initiative of the Financial Empowerment Network | Seattle-King County (Network) to connect people without bank accounts to affordable mainstream financial services, including checking, savings, credit, and financial education opportunities.

Bank On Seattle-King County is providing strategies under the umbrella of the “Get Banked!” campaign to promote asset building and meet the needs of low-income unbanked and under banked households.

“Get Banked!” offers a pilot project that marries the products and services of our Bank On partner, KeyBank with the financial counseling services and tracking of the Seattle Financial Empowerment Center identified service plan areas (banking, savings, credit and debt). Both serve low-income households and with cross-referrals offered will play an important role in building the long-term household financial capability of Seattle residents, which includes access to mainstream banking products and services.

Permalink | Comments () | Main Page | New Post


Some say $10.10 would hurt business, but most business people disagree

Posted by dlevine on 10/08/2014

US businesses are in. The American public is in. So what’s next on the minimum wage, Congress?

It has long been the argument from some voices in business—or at least their Washington lobbyists and the Members of Congress who listen to them—that raising the minimum wage would hurt business—and workers—by eliminating jobs.

However, the stark reality is that most business owners in America don’t agree with this idea. In fact, poll after poll shows that most business people think it’s well past time for an increase in the minimum wage.

Indeed, 61 percent of small business owners support a gradual increase in the minimum wage to $10.10 per hour, according to a recent poll by Business for a Fair Minimum Wage. And a Harris survey released last week found that 62 percent of employers, including 58 percent of senior business leaders, think that the minimum wage should be raised from where it’s been stuck at $7.25 per hour for more than seven years.

These numbers are only slightly lower than the views of the American people. Recent polls have found that between 73 percent and 80 percent of Americans– including majorities among Democrats, Republicans, and Independents– support an increase.

Despite the overwhelming support of most US businesses, as well as the American public, the job-loss canard was again trotted out by the US Chamber of Commerce, the National Restaurant Association, and a handful of other industry associations earlier this year when they wrote to every Senator that increasing the federal minimum wagecould truly be the difference between continuing to operate and going out of business. For the employees it attempts to help, it may be the difference between a job and unemployment.

$10.10 is the minimum wage level proposed by President Obama and in legislation by Sen. Tom Harkin (D-IA.) and Rep. George Miller (D-CA). It’s a wage that would boost the incomes of more than 25 million US workers, one-third of whom have families; over 14 million children would see a boost to their family’s income.

As the minimum wage for 200,000 employees of federal contractors rose yesterday to $10.10, thanks to an executive order by the President, one contractor, Carmen Ortiz Larsen of AQUAS Inc. said:

“From a business perspective, a higher minimum wage will reduce turnover and training costs, and lead to more productive workers who are focused on the work at hand, not on looking for another job that pays more.”

If that’s not enough to dispel—or at least put a dent in—the tried-and-false argument against raising the minimum wage, a raft of academic studies have shown that increasing the minimum wage floor has little or no impact on employment—and may actually create up to 140,000 jobs by pumping money into the economy due to workers’ increased incomes.

In addition, there is evidence that job creation is faster in states that have raised their minimum wages. The Center for Economic and Policy Research found that in 13 of 14 states that raised their minimum wages in 2014, all but one (New Jersey) had higher job growth in the first five months after the wage increase than in the preceding five months. In nine of the states with faster growth, employment gains were above the national median.

So, just as the US Congress is not representing the American people in supporting a decent wage for tens of millions of workers, big Washington lobbyists for low-wage industries don’t reflect the views of most of the nation’s employers.

Read more:

Permalink | Comments () | Main Page | New Post

Recent Posts

Copyright © 2014 CFED — Corporation for Enterprise Development 1200 G Street, NW Suite 400 Washington, DC 20005 202.408.9788

Powered by ARCOS