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Expanding the EITC to "Childless" Workers Would Boost Financial Security for many Arkansans and Mississippians

Posted by tedwards on 08/27/2014

The Earned Income Tax Credit (EITC) is a federal tax credit for low- and moderate-income working people, recognized for its success in promoting work and alleviating poverty as well as offsetting payroll and income taxes.[i] Due to its success, federal policymakers over the last decade have made considerable progress in strengthening the EITC. The progress made at the federal level translates to nearly $2.5 million returned to 300,000 EITC recipients in Arkansas, and $2.75 million back in the pockets of 392,000 Mississippians in 2012.[ii]

Southern also recognizes the importance of the EITC. As part of our mission to create economic opportunity in the rural communities we serve, Southern has helped file more than 15,000 tax returns over the past decade through our Volunteer Income Tax Assistance (VITA) program, resulting in over $15 million in refunds from the EITC alone. That’s money being directed back into the community, strengthening the local economy.

However, in spite of the great assistance the EITC has brought to many Arkansas and Mississippi families, low-income childless workers receive little to nothing from the EITC. For instance, a childless adult working full time at the minimum wage cannot qualify for the EITC because his earnings exceed the income limit for the very small credit for workers not raising minor children. Further, all childless workers under age 25 are ineligible for the EITC, so young people just starting out receive none of the EITC’s proven benefits.

In an effort to expand the poverty-reducing impact of EITC, the President’s 2015 budget and five recent congressional proposals would significantly improve the EITC for childless workers.[iii] Nearly all of the proposals would lower the eligibility age to 21, and all would raise the maximum credit and phase in the credit more rapidly as a worker’s income rises. If the President’s 2015 budget proposal passed:

  • The credit for a childless adult with wages at the poverty line would rise from $171 to $841;
  • the credit would jump from just $22 to $542 for a childless adult working full time at the minimum wage; and,
  • 122,000 childless workers in Arkansas and 129,000 childless workers in Mississippi would become eligible for the EITC or receive a larger EITC in 2015.[iv]

By making more childless workers eligible for the EITC — including those working full time at the minimum wage — and increasing the credit for workers currently eligible, the tax credit will provide more support for increasing employment and reducing poverty. In the communities Southern serves in Arkansas and Mississippi, the expansion of the EITC could be transformative as both states have high percentages of residents living below the poverty level. A substantial transfer of wealth, such as the EITC, can positively affect one’s net worth, thereby providing opportunity for upward economic mobility, which is why we encourage you to contact your elected officials and ask them to support these changes.

As a Community Development Financial Institution (CDFI), Southern is committed to improving the financial stability of rural communities, and supporting common sense measures like the EITC that provide proven incentives to work and earn wages rather than rely on public benefits. We invite you to learn more about our efforts to improve the economic security of rural communities and the people who live there at any time by contacting Meredith Covington, Policy & Communications Manager, at meredith.covington@southernpartners.org.

i. Carsey Institute. (2014). Proposed EITC expansion would increase eligibility and dollars for rural and urban“childless” workers. Available at http://carseyinstitute.unh.edu/sites/carseyinstitute.unh.edu/files/publications/IB-Carson-Mattingly-EITC-2014-web.pdf.

ii. National Conference of State Legislatures (NCSL). (2012). Available at http://www.ncsl.org/research/labor-and-employment/earned-income-tax-credits-for-working-families.aspx.

iii. The Working Families Tax Relief Act of 2013 (S. 836), introduced by Senators Sherrod Brown and Richard Durbin; The Earned Income Tax Credit Improvement and Simplification Act of 2013 (H.R. 2116), introduced by Rep. Richard Neal; The EITC for Childless Workers Act of 2014 (H.R. 4117), introduced by Rep. Charles Rangel; The Julia Carson Responsible Fatherhood and Healthy Families Act of 2013, introduced by Rep. Danny Davis; and The 21st Century Worker Tax Cut Act (S. 2162), introduced by Senators Patty Murray, Jack Reed, and Sherrod Brown.

iv. Center on Budget and Policy Priorities (CBPP). (2014). Available at http://apps.cbpp.org/3-5-14tax/?state=AR and http://apps.cbpp.org/3-5-14tax/?state=MS.

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Payroll Card Legislation Signed Into Law

Posted by lmullany on 08/27/2014

August 14, 2014

Last week, Governor Quinn signed into law legislation that protects the wages of Illinois workers from the unfair and deceptive fees associated with payroll cards. The legislation was sponsored by Representative Art Turner and Senator Kwame Raoul and championed by Illinois Attorney General, Lisa Madigan, and the Illinois Department of Labor. IABG worked closely with our partners to advocate for a law that protects consumers while ensuring that workers have a choice. Illinois now has the strongest payroll card law in the country.

Payroll cards have been growing in popularity among employers over the last few years. Rather than paying employees with a check or via direct deposit into a bank account, employers are loading wages onto a payroll card. Payroll cards are particularly being used for workers that are unbanked.

Last fall, we hosted discussions around the state on the racial wealth gap and associated barriers that prevent families from reaching financial security. In each community we heard about the impact of payroll cards.

One story is that of Ida King, a POWER-PAC parent leader with Community Organizing & Family Issues (COFI). While working at a company in Chicago, Ida showed up to work one day and, instead of receiving a paper check, she was handed a payroll card. She wasn’t given a choice to be paid a different way and she was not given the card’s disclosure form. After using the card she began to notice that some of her wages were missing. She was being charged monthly fees, point-of-transaction fees, and additional ATM fees. When she called customer service to ask about these fees, they charged her for that call.

Ida shared her story at the bill signing that took place at COFI last week. “They were charging me all these fees but I wasn’t making that much money,” said Ida. “I am so happy to see this bill signed into law.”

Under this new law, workers have the right to:

  • Opt Out of the Payroll Card and Choose another Payment Method: Your employer must receive your written or electronic consent to pay you via a payroll card (see other options listed on the right). They MUST offer you the option to be paid with a paper check and/or direct deposit if you choose those options.
  • View Card Disclosure Forms: Your employer must give you written disclosure that includes information that the program is voluntary, that there are other payment options, and the terms and conditions of the payroll card.
  • Access Wages: You must be given at least one method of withdrawing all of your wages from the payroll card once per pay period, at an accessible location, with NO FEES.
  • Access Account Information: You must have access to at least one paper or electronic transaction history per month. The history should include all deposits, withdrawals, deductions, or charges by any entity from or to your payroll card.
  • Check Account Balance by Phone: You must have unlimited telephone access to customer service for questions.
  • Make Two Declined Transactions per Month: You must be given two free declined transactions each month. If there are more than 2 declined transactions on your card within one month, you may have to pay a “commercially reasonable” fee.

Fees may NOT be charged for:

  • Point of sale transactions (i.e. using your payroll card to purchase goods or services)
  • Loading wages onto the card
  • Monthly fees
  • Overdraft fees or overdraft service fees

Workers should be warned that fees can be charged if your account is inactive for more than one year. Also, if you leave your job, the fees and features of your charge may change after 30 days.

The law goes into effect January 1, 2015. You can download a “Know Your Rights” fact sheet to share with workers in your community.

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How Kentucky Got it Right

Posted by tlentz on 08/22/2014

Time magazine's article by Steven Brill in August 2014 highlighted Kentucky's success of rolling out the Obamacare health-insurance exchange. The author relays how "Governor Steven Beshear and a team of smart, determined career civil servants, got it right -- by preparing exhaustively, by dealing frontally with the system’s challenges and by celebrating rather than soft- pedaling the reality that Obamacare is a social- welfare program intended to help the poor and the middle class get health care coverage."

Mr. Brill continues..."Of the 13 million enrolled nationally (spring 2014) for private insurance on the exchanges or for Medicaid, Kentucky has pulled in 521,000. That’s an astounding 78% of the state’s uninsured population, a percentage far above the national totals."

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Spent: Looking for Change (Documentary)

Posted by rlynch on 08/20/2014

Tags: documentary, film, spent, financial system, predatory practices, stories

A poignant film about the harsh realities millions of families face every day.

This film gives us an inside look into the lives of four families dealing with financial crisis. While trying to survive to meet their basic needs we see how families are left with limited options and seek solutions that keep them trapped in debt. The utilization of check cashing businesses, payday loans, and banks overdraft protection fees are an alternative millions seek in order to pay their bills. These practices are used out of necessity and cleverly disguised as a solution. However, for many, it will prove to be only a temporary solution. The result, an 89 billion dollar financial system that thrives due to the fees and interest families pay every year.

It is a problem that affects every aspect of our society, when we tell a nurse, she can’t take care of her dying mother, or a young entrepreneur, don’t go after your dream, or parents, don’t seek help for your autistic child, or a young couple, you can’t move beyond your past because you don’t have the money or adequate resources to do so.

Watch the short 40 minutes documentary by clicking on the video link below or to find out more about the film click HERE

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Next Stop: SB896 to the Governor's Desk

Posted by tararobinson on 08/07/2014

We are excited to announce that on Monday, August 4, the California Assembly voted unanimously to pass SB 896! The bill is now on its way to the Governor’s desk.

We are grateful to have your support of MAF’s credit-building programs. The passage of this bill will give us a historic level of recognition that will create major shifts in the nonprofit credit-building field and allow us to scale our work to more communities across the state.

Stay tuned for the next update!

Learn more here

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Wayne Metro Dollar$ and $en$e Expo

Posted by mlulion on 08/06/2014

FOR IMMEDIATE RELEASE: July 15, 2014 Media Contact: Mia Cupp (313) 463-5472 office (734) 536-2006 cell

WYANDOTTE—Wayne Metropolitan Community Action Agency is collaborating with Fifth Third Bank to connect community members with valuable information and resources. The DOLLAR$ & $EN$E Expo is a family friendly event, featuring the Fifth Third eBus, a variety of classes, workshops and fun games for the whole family.

This event will include sessions on employability skills, financial literacy, and wellness. Free credit reports, tax preparation, homebuyer education, resume writing, foreclosure prevention and financial coaching will be featured at the DOLLAR$ & $EN$E Expo. Additionally, there will be legal workshops and health screenings available. An Individual Development Account (IDA) orientation is planned, which is a matched saving account to help individuals make a down payment on a first home, provide funds for a micro-business or pay college tuition.

The event will be held on two dates in August:

Thursday, August 7th from 1:00 p.m. to 6:00 p.m. at Wayne County Community College, 21000 Northline Road, Taylor Thursday, August 14th from 1:00 p.m. to 6:00 p.m. at Northwest Activities Center, 18100 Meyers Road, Detroit

Register for the DOLLAR$ & $EN$E Expo today to save your spot! www.waynemetro.org/events or by calling (734)284-6999 or (313) 388-9799.

ABOUT WAYNE METRO Wayne Metro is the Community Action Agency serving all of Wayne County including the City of Detroit. Our mission is to empower low-income people and strengthen communities through diverse services, leadership, and collaboration. The agency has been serving needs of low-income individuals since 1971, delivering more than 50 integrated programs, including educational, housing, financial, healthcare and basic needs services to individuals, families, and children. We maintain a low administrative rate (6%) so that $.94 of every dollar can be utilized for direct client services. With administrative offices in Wyandotte and Detroit, Wayne Metro maintains over 20 service sites throughout Wayne County, including Detroit, Highland Park, Hamtramck, Harper Woods, Taylor and Westland.

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About Fifth Third Bank Fifth Third Bank,( Eastern Michigan), is based in Southfield, Michigan and led by President David F. Girodat. Fifth Third Bank is metropolitan Detroit’s sixth largest bank and has $4.9 billion in assets. Fifth Third Bank serves customers in eight southeastern Michigan counties: Wayne, Oakland, Macomb, St. Clair, Shiawassee, Livingston, Genesee and Washtenaw. Fifth Third Bank currently operates 92 banking centers, and more than 150 ATMs throughout eastern Michigan. Fifth Third Bank is proud to be named as one of the “101 Best & Brightest Place to Work” by the Michigan Business and Professional Association and a Top Place to Work” by the Detroit Free Press.

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United Way THRIVE - The First Five Years

Posted by slopez on 08/05/2014

Stronger, more financially stable families mean a stronger, more financially stable community for us all.

In 2008, compelled by research pointing to the importance of family financial stability and its impact on nearly all other social issues, including education, health and community well-being, United Way of Greater Houston launched United Way THRIVE, a collaborative of 21 nonprofit partners across multiple sectors that work together to support hardworking, lower-income families with children in their efforts to achieve financial stability.

In its first five years, United Way THRIVE has achieved remarkable success in establishing a path to financial stability for thousands of Houston-area families, developing best practices and models to service delivery and helping agencies work towards common goals and outcomes. To help elevate the field, UW THRIVE has published a report on its first five years of work.

Click here for the full report.

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The State of Family Economic Security in Mississippi

Posted by tedwards on 07/28/2014

Southern has a long-standing commitment to provide opportunities for economic stability and mobility for people and communities in rural Arkansas and Mississippi, and to complement our asset-building services, Southern promotes public policy efforts in both states and nationally. To gain a better understanding of the landscape of Mississippi policy organizations, Southern commissioned a study to research organizations working to improve the quality of life for individuals and families throughout the state.

Family Economic Security in Mississippi: A Policy Scan of Organizations Working to Create Economic Opportunity and Strengthen Financial Security ,” profiles 43 Mississippi organizations whose combined efforts represent direct service and public policy work across every county in the state. These organizations are working to improve financial inclusion, asset building, access to public benefits, tax policy, access to child care, and educational attainment, all of which impact a household’s finances. The policy scan is based on a survey that was developed to identify activities, successes, challenges and future plans around different policy areas pertaining to family economic security. As shown in the study’s executive summary, several themes emerged in the survey results:

  • Many passionate and committed individuals and organizations are maximizing limited resources to strengthen family economic security in Mississippi. Many of the organizations profiled in the policy scan have less than a decade of experience working in their respective policy and program areas, suggesting an increased awareness of the need for programs and advocacy around family economic security. At the same time, many survey respondents expressed the sense that they lack the capacity to address all of the need that they perceive in their communities, and attributed this at least in part to funding constraints.
  • Developing trust in traditional financial institutions is the most serious challenge for organizations working to build wealth for low-income families. The most popular areas of focus for respondents were asset building and financial literacy (33 organizations), tax policy – primarily free tax preparation – (26 organizations), and financial inclusion (26 organizations). The most significant challenge facing organizations working in these areas is the ability to develop trust with low-income clients, who are more likely to be unbanked and may tend to be more familiar with seeking assistance from predatory lenders located in their neighborhoods.
  • Isolation, friction over turf, and competing policy agendas are considerations for organizations working to advance family economic security. Both overwhelming need and extensive demand for services may have led to the sense of isolation expressed by some respondents, particularly direct service providers. Another common thread was friction among organizations offering similar products and services, as well competition over limited funding streams.

What are the primary focus areas of your work on family economic security?

  • The economic downturn has created additional obstacles to asset building. Mississippi is among the poorest states in the nation, and the recession has amplified this reality. In addition to complicating the ability to save for low and moderate-income families, the recession may also have increased demand for predatory loans.
  • Working in coalition has been a successful strategy for organizations involved in legislative advocacy, and holds promise for additional grassroots efforts. The current political climate in Mississippi is inhospitable to new or additional government spending. To maximize their clout in this environment, many organizations have joined forces to advocate in coalition.

These key findings will be presented tomorrow by SBCP at an event hosted by the Federal Reserve Bank of St. Louis, entitled, “The Policy Landscape of Mississippi: Promoting Change to Create Opportunities.” Along with the Federal Reserve and SBCP, representatives from the Mississippi Center for Justice and Mississippi Economic Policy Center will also be discussing their work promoting policy change and creating opportunities for individuals and families within the state.

To learn more about our efforts to improve the economic security of rural communities and the people who live there, we invite you to contact Meredith Covington, Policy & Communications Manager, at meredith.covington@southernpartners.org.

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NABC attends TANF hearing in CARSON CITY

Posted by mjohnson on 07/22/2014

Tags: Nevada, TANF, assets&opportunity

On June 18, 2014 Michele Johnson, Chair of the Nevada Asset Building Coalition and Nancy Brown, Chair of the Nevada Opportunity Alliance attended the Nevada Dept of Health & Human Services TANF asset limit hearing in Carson City.

The NDHHS recommended an increase of the TANF asset limit test from $2000 to $6000. Michele and Nancy formally requested that the asset limit test for TANF be totally removed. The NDHHS understood and theoretically agreed with the request but proceeded with the recommendation and approval of the $6000 limit increase. They did this knowing that they would be able to get the $6000 increase approved by the Governor - a step in the right direction.

Although this is not a total removal of the TANF asset limit test the door to the NDHHS was opened. The state Administrator asked Nancy and Michele to stay until after the entire hearing. He expressed his appreciation of their interest and sharing of data/research provided prior to the hearing. He requested a follow-up discussion that may lead to potential partnership in an effort to integrate Asset Development programs and best practices through out the Nevada State Welfare system. In addition a scholarship was offered to the welfare program administrator to attend the ALC in September. This invitation was accepted.

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Graduates of Asset Building Programs Honored

Posted by lmullany on 07/10/2014

In June dozens of participants in the Asset Building programs at Heartland Human Care Services (HHCS) were recognized for their achievements by program mentors and Illinois Department of Financial and Professional Regulation (IDFPR).

"Today we are celebrating success,” Erika Singleton, a member of the HHCS Asset Building Team, said. “The milestones achieved, the goals accomplished, and every step taken toward success.”

According the CFED's Assets & Opportunity Scorecard, 1 in 4 families experience asset poverty, meaning they do not have enough assets or savings to meet basic needs for a period of 3 months in the event of unexpected occurrences like job loss or a medical emergency. For families of color, almost 1 in 2 families are experiencing asset poverty.

The programs offered by HHCS are geared at improving the financial security of families through financial education and savings. Manny Flores, Secretary of the IDFPR, noted that many of the complaints and cases his department sees could have been prevented through better consumer education.

Since 2006 the programs have educated over 9,000 people in Chicago. Collectively participants have saved $202,646 of their own money and an additional $117,944 in matching funds. Additionally, nearly 291 new bank accounts have been opened as a result of the programs.

“Research shows that families with assets tend to be more productive at work and earn more, save more, care for their property, are involved in their communities, and plan for education and retirement,” Singleton said.

Participants in seven Asset Building programs were honored, including: Family Self-Sufficiency, IDEA, Meet Your Match, One Million Degrees, GEAR UP, Supportive Services for Veteran Families, and Wealth and Wellness Financial Education.

For more information on the programs visit http://www.heartlandalliance.org/assetbuilding/

Family Self-Sufficiency: is a 5-year program for residents in the public housing or HCV program of Chicago Housing Authority. Participants work with an Asset Development Coordinator to meet goals such as financial education, career development, and savings. Whenever the household experiences a rent increase as a result of increased wages, the family can accrue escrow deposits for each month of increased rent. Upon completion of their goals, the family receives the money accrued in escrow.

Wealth and Wellness: Participants complete 10 hours of financial education by attending a minimum of 5 workshops that are two hours each and certified by the Illinois Department of Financial and Professional Regulations. This financial literacy program includes instruction on budgeting, understanding credit, saving, and debt reduction.

Meet Your Match: is a matched savings program for residents living in supportive and subsidized housing. Participants complete 10 hours of the Wealth and Wellness financial education, meet for consultation with an Asset Development Coordinator, and have the opportunity to earn matched savings. For Matched Savings, participants make regular deposits into an account every month for 6-12 months. After saving for at least 6 months, participants receive a 2:1 match for every dollar saved, up to $200.

IDEA: is a matched savings program for working female heads-of-household. Like the Meet Your Match program, participants complete financial education, meet with their Asset Development Coordinator, and complete matched savings.

One Million Degrees: is a scholarship program providing low-income, highly motivated students the opportunity to pursue degrees in diverse fields including healthcare, education, medical technology, and computer sciences at community colleges. HHCS provides financial education to these scholars one Saturday per month.

GEAR UP: is a Department of Education partnership with Northeastern University’s Chicago Teachers Center and CPS. GEAR UP works with cohorts of students and parents from 7th grade to Seniors in high school to increase college success. GEAR UP partners with HHCS to provide the Wealth and Wellness education for parents at targeted schools such as Robeson High School, Spry Community Links High School, Madero Middle School, and Farragut Career Academy.

Supportive Services for Veteran Families: provides individual financial coaching and career development services to formerly homeless Veterans. HHCS has helped over 70 Veterans improve their credit report and score and obtain better employment.

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