March 2015 Newsletter
RAISE Texas News
Opportunity Texas Presents at Financial Literacy Education Commission
RAISE Texas’ colleague, Laura Rosen of OpportunityTexas, a joint initiative of CPPP and RAISE Texas, was invited to speak at the most recent Financial Education Literacy Commission (FLEC) meeting in Washington, DC. Her presentation was part of a panel titled, “Youth Savings, Policy Implications”. We would like to thank Laura for doing a great job representing our work and educating the commission on the importance of children’s savings accounts and financial education. To view the full commission meeting, click here.
Update on the 2015 Legislative Session
RAISE Texas and its partners are working with several Legislators on a number of asset-building bills related to our mission. Once all bills have been filed, we will be sending out a comprehensive list of bills that we will be tracking. Several bills have been filed so far this session, and we will be closely following bills in such categories as:
- Payday and auto title lending
- Savings
- Financial education
- Post-secondary education and College access
Texas News
New Report Shows 25% of Texas Kids Live in Poverty
The Center for Public Policy Priorities released a new report, State of Texas Children 2015, which shows that one in four Texas children lives in poverty, threatening their potential and the state’s continued prosperity. Although there have been slight improvements made in Texas in health care and school nutrition, these changes do not compensate for inadequate investments in education and child protection. To better the lives of children in Texas, this report provides several key policy recommendations:
- Invest sufficiently in public education to meet student needs.
- Expand Pre-K statewide to high quality, full-day programs for currently eligible students.
- Close the Coverage Gap, and expand health insurance coverage options for families.
- Provide more support for informal kinship caregivers, and streamline the process for accessing kinship care benefits.
- Raise the state minimum wage, and change the state law that prohibits Texas cities from setting their own minimum wage.
National News
Urban Institute Highlights Nine Charts About Wealth Inequality in America
Why hasn’t wealth inequality improved over the past 50 years? The Urban Institute released a series of charts to illustrate how income inequality, earnings gaps, homeownership rates, retirement savings, student loan debt, and lopsided asset-building subsidies have contributed to growing disparities. The article also provides six policy recommendations that could help reduce wealth inequality and racial wealth disparities including: offer matched savings such as universal children’s savings accounts, promote emergency savings with incentives linked to savings at tax time, and reduce reliance on student loans while supporting success in postsecondary education. Click here to read the article.
Job Opportunities for Experienced Financial Coaches
The Armed Forces Services Corporation (AFSC) is hiring 60 financial coaches in support of its contract with the CFPB to implement a federal nationwide financial coaching services program. Under its contract, AFSC is responsible for embedding financial coaching services into organizations that are already providing job training, education, social services, housing, and other services. This model will allow the CFPB to identify and support people who may benefit from financial coaching the most, such as those transitioning from being unemployed or from another tough financial situation. Interested candidates can get more information and apply on the AFSC website: www.afsc.com/careers.html.
Financial Regulators Encourage Youth Savings Programs
The five federal financial regulatory agencies recently issued guidance to encourage federally insured depository institutions to offer youth savings programs to expand the financial capability of young people. The guidance also provided answers to frequently asked questions related to the establishment of these programs. Research shows that school-based youth savings programs combined with financial education can be effective in helping students to improve their long-term financial and education prospects. The five financial regulators that issued the guidance are the Federal Reserve Board, Federal Deposit Insurance Corporation, U.S. Department of the Treasury’s Financial Crimes Enforcement Network, National Credit Union Administration and Office of the Comptroller of the Currency.
In fact, Comptroller of the Currency Thomas Curry discussed the importance of financial literacy and encouraging healthy savings habits early in life during remarks at the Financial Literacy and Education Commission. Specifically he mentioned youth savings programs and how they work. View his remarks here.
CFPB Accepting Feedback on Proposed New Rules for Prepaid Cards and Accounts
With more economically vulnerable people using prepaid cards to receive income, manage spending and meet other financial needs, the CFPB issued a proposal to make prepaid accounts safer and more transparent. This proposal would apply strong protections to traditional general purpose reloadable cards and also expand protections for prepaid cards used to disburse certain government payments such as Social Security, veterans’ assistance, unemployment insurance and pensions. The proposal would not apply to debit cards that are linked to checking accounts, gift cards, certain health and flexible spending account cards, or cards used by local or state agencies to distribute needs-based such as SNAP, WIC, or TANF. Four main highlights the CFPB is asking the public to consider:
1. Lost card protection and error resolution rights: Under our proposal, consumers who report a lost or stolen prepaid card within two business days would be responsible for only up to $50 in unauthorized charges. The proposed new rule would also require companies to investigate and resolve timely reported errors of registered cardholders within 10 business days or provide temporary re-credit of the disputed amount.
2. Easy and free account information: Under our proposal, companies would generally be required to provide consumers with access to 18 months of transaction history online or by mail (upon request) – and a monthly and annual summary of fees, deposits and withdrawals – without charging a fee.
3. Disclosures: We’ve proposed new disclosures – a short form and a long form – that consumers can use to compare products before signing up. The short form includes a summary of fees, including monthly (or annual) fees, per purchase fees, ATM withdrawal fees, and cash reload fees among others. The long form includes clear details on all the other fees that a company will charge. (Learn more)
4. Credit coverage: Our proposed rule require companies that want to offer overdraft services or other forms of credit on prepaid cards to follow certain rules that currently apply to credit cards, including periodic statements for consumers, a payment grace period, and establishing the ability of a consumer to repay before extending credit. Importantly, the proposed rules prohibit companies from withdrawing payments for the credit from any funds coming into the prepaid account– unless they receive permission from the consumer first.
Send comments and feedback on the proposed rules by March 23, 2015 at federalregister.gov/articles/2014/12/23/2014-27286/prepaid-accounts-under-the-electronic-fund-transfer-act-regulation-e-and-the-truth-in-lending-act.
CFPB Provides Ways to Help Kids Get a Strong Start Financially
During America Saves Week, lots of great information and resources are available. For those of you with kids, the CFPB included an article on its website with ways to help kids start thinking about savings. Click here to read the article.
Improving the Tax Preparation Experience for Working Families
The tax preparation process has the potential to help many low-income households with asset building and financial security, but current regulations do not adequately protect working families throughout the process, according to a brief from the New America Foundation. Improving the Tax Preparation Experience notes that while low-income households can often receive money back from the government at tax time, the rise in the number of un-credentialed and unregulated commercial tax preparers can expose those households to risks and unnecessary costs. In 2013, 60 percent of EITC recipients paid for tax preparation services at a cost of nearly $1 billion, according to the report. The report recommends greater regulation and transparency in commercial tax preparation, including clear price breakdowns for clients and standardized terminology across the industry. Read the article here.
Economic Development Workshop for Community Foundations
The Aspen Institute Community Strategies Group and the Center for Rural Entrepreneurship are hosting a two-day workshop, Advancing Economic Success: Community Foundations Building Family, Community and Regional Prosperity, for community foundation staff and board to explore how a wide range of community foundations (metro, statewide and rural, small to large) in the US are becoming economic development players. The workshop will be on March 16-17, 2015 in Washington, DC. Day one will highlight successful efforts by community foundations to help low-income families access and move up the economic ladder including Children’s Savings Accounts and Earned Income Tax Credit (EITC) and Children Tax Credit (CTC). Day two will focus on tools and roles that community foundations can take to strengthen economic sectors, grow and retain businesses and land, and connect and prepare local workforce for the local economy. Click here for more information or to register today.
