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June 2016 Newsletter

RAISE Texas News

Thank You for Attending the 2016 RAISE Texas Summit!

The 2016 RAISE Texas Summit and workshops “Building Financial Success for Texans: In Schools, The Workplace and Our Communities” was a huge success! We would like to send a big thank you to all of the presenters, moderators, and YOU for making the two-day workshops and summit exciting and informative for advocates from across the state of Texas. The discussions on Financial Coaching, Children’s Savings Accounts for College, Small Dollar Loan Alternatives, and Implementing Asset-Building Products and Programs in the Workplace helped move our agenda forward. We are excited to announce that this was our biggest summit ever! A special thanks to JPMorgan Chase, our Lead Sponsor, and BBVA/Compass, our Major Sponsor for funding our event. And, thank you to our partner of 10 years, the Federal Reserve Bank of Dallas staff for being a phenomenal host. We look forward to the next 10 years working together with all of you!

Summit Presentations Now Available on the Event Website

The PowerPoint presentations are available on the event website. Visit www.dallasfed.org/cd/events/2016/16raise.cfm to download the presentations now.

OpportunityTexas to Release Evaluation of Automatic Savings Project on Workplace Initiatives Webinar
On July 12, 2016 at 2:00pm, OpportunityTexas, a joint initiative of RAISE Texas and the Center for Public Policy Priorities, and the Federal Reserve Bank of Dallas will be hosting a webinar on Workplace Initiatives Happening in Texas. For organizations interested in providing asset-building products and programs in the workplace, this will be an excellent discussion of successful employer-based programs and pilots in Texas. During this webinar, OpportunityTexas will release the evaluation of the Employer-Based Automatic Savings Pilot that we helped to develop and evaluate for the United Way for Greater Austin. More details and registration to come soon!

Texas News

Save the Date for the Children’s Savings Account Webinar

The Texas Department of Banking is hosting a free webinar on Thursday, June 23, 2016 from 2:30pm-3:30pm CST on Expanding Children’s Savings Accounts for College in Texas. RAISE Texas’ very own, Woody Widrow, will be presenting with OpportunityTexas’ Laura Rosen on our current children’s savings accounts for college pilot programs that were recently completed in Richardson ISD and Pflugerville ISD. Also presenting will be Amanda Stephens from First Convenience and First National Bank Texas. Click here to register for the webinar. We hope you will join us for this important conversation!

Julián Castro Returning to Texas as Keynote Speaker
U.S. Secretary of Housing and Urban Development Julián Castro is the keynote speaker of “Southwest Border Colonias: Housing and Sustainable Development in the 21st Century,” a United Nations Habitat III U.S. Regional Conference. This conference will be held June 22-23 in El Paso. The Dallas Fed’s 2015 report on Texas colonias will also be highlighted at the event. Register now!

National News and Resources

Brief on the Results of the Financial Coaching Census 2015 Released

The Center for Financial Security (CFS) and Asset Funders Network (AFN) developed the first-ever Financial Coaching Census to better understand the financial coaching field, from its size to its scope, identifying both challenges and opportunities. The Financial Coaching Census explains the methodology, summarizes the key findings and baseline insights, discusses areas for reflection, and identifies actionable steps to move the field forward. The objective moving forward is to deliver the Coaching Census on a yearly basis, allowing the field to track the trends, both positive and negative, that occur as the field continues to grow. These insights will allow funders and organizations delivering coaching to better and more swiftly address the shifting needs of coaching programs, financial coaching practitioners, and financial coaching clients. If your organization provides financial coaching services in Texas, please keep your eyes out for the link to the next census survey in our future newsletters. Lots of great information and insight into the financial coaching field in Texas was presented by Hallie Leinhardt, from CFS, at our recent 2016 RAISE Texas Summit. Click here to review Hallie’s presentation on Texas, or click here to download the entire brief.

CFPB’s Rules for Small Dollar Lending Available for Public Comment

After studying the payday and auto title loan industry and conducting field hearings throughout the country, the Consumer Financial Protection Bureau (CFPB) released on June 2 its proposed rules regulating that industry. The Texas Fair Lending Alliance (TFLA), a coalition of organizations working to ensure small-dollar loans are fair financial products, is optimistic these rules will help ensure borrowers can repay their loans and avoid falling into a pernicious cycle of debt. Currently borrowers in Texas often pay high fees and struggle to pay down the loans’ principal. In Texas, payday loans average around 500 percent APR, and car title loans average over 200 percent APR.

Data from a new Texas Appleseed analysis of statewide data from 2012 to 2015 paints a stark picture of the real cost of small-dollar loans. From 2012 to 2015:

  • Payday and auto title businesses collected nearly $6 billion in fees from borrowers;
  • An average $500 loan cost more than $1,300 to repay;
  • Average fee charges were 1.6 times the original loan principal;
  • The volume of high-cost installment lending increased by 112 percent in Texas;
  • Short-term auto title lending increased by 30 percent; and
  • 1 in 7 auto title borrowers had their vehicles repossessed.

Overall, the proposed rules are a step in the right direction—there is now an emphasis on making loan payments more affordable and ensuring that loan structures do not trap borrowers in a cycle of debt. The rules apply to payday loans, vehicle title loans, deposit advance products, and certain high-cost installment loans and open-end loans. The CFPB’s proposed regulations include requirements to assess the borrower’s ability to repay the loan and protections to ensure that loan payments will not hinder the borrower’s ability to pay for basic necessities, such as rent, utilities and food. Click here to read the entire TFLA press release about the rules. RAISE Texas will be working with TFLA to offer analysis on the proposed rules and ways consumers and advocates can offer written comments.

Poll Shows Two-Thirds of Americans Can’t Cover a $1,000 Emergency

The Associated Press-NORC Center for Public Affairs Research conducted a poll that shows two-thirds of Americans would have a hard time coming up with $1,000 to cover an emergency. This statistic includes all income levels including 38 percent of the country’s wealthiest, making more than $100,000/year, would have difficulty finding $1,000. In the same poll, 16 percent of workers have seen salary cuts and 46 percent have had stagnant wages for five years. It is still a complex issue to figure out why Americans don’t save, but U.S. tax policy rewards taking out a mortgage and saving for retirement instead of saving for short-term emergencies. Click here to read more about the poll.

Impact of Financial Counseling Research Now Available

The National Foundation for Credit Counseling® (NFCC®) released the results of a new study on the impact of financial counseling on consumer behavior. The Ohio State University conducted an independent, scientifically based evaluation of the Sharpen Your Financial Focus initiative, which was launched in 2013 and has already assisted more than 60,000 Americans to move toward long-term financial stability. The comparative evaluation showed improvements in available liquidity, levels of revolving debt and overall debt balances, and available credit grew at a faster rate for the clients that received credit counseling through the Sharpen program. When surveyed, 67 percent of the clients that received the financial counseling said the program helped them better manage their money, 70 percent improved their overall financial confidence, 68 percent say it helped them set financial goals, and 73 percent reported paying their debt more consistently. Click here to read more about the results of this evaluation.

New Study Shows the Financial Impacts of Medicaid Expansion

A new poll by the National Bureau of Economic Research (NBER) shows that low-income residents in the 31 states that have expanded their Medicaid health coverage under the Affordable Care Act are in a better financial position than those living in states (like Texas) that have not expanded. In fact, their financial position includes fewer unpaid bills being sent to collection agencies and collection balances that are $600 to $1,000 less than low-income residents of non-expansion states. Click here for more on the financial impacts that the state decisions about whether or not to expand their Medicaid health coverage have on low-income residents.

Shelterforce: Conversation on the Pursuit of Financial Well-Being
An article, In Pursuit of Financial Well-Being: A Conversation on Fairness, Accessibility, and Empowerment, in Shelterforce interviews leaders in the asset-building field to talk about combating financial insecurity. The leaders that took part in the conversation were: Holly Frindell, senior program manager, National Association of Latino Community Asset Builders; Andrea Levere, president, CFED; Andrea Luquetta-Kern, director of policy and research, California Reinvestment Coalition; Ann Solomon, strategic initiatives manager, Federation of Community Development Credit Unions; and Woody Widrow, executive director, RAISE Texas and NHI board member. Click here to read the entire conversation.