Welcome to the third CT Asset Building Collaborative newsletter! Read on to find out about local upcoming events, news from around the country, and recent findings from research on asset building and financial stability.
Opportunities to Learn
2016 Connecticut Financial Literacy Summit
Come to this exciting event on Friday, October 14 at the Sheraton Hartford South Hotel in Rocky Hill, CT, organized by the Connecticut Jump$tart Coalition. Along with keynote speaker Beth Kobliner, personal finance expert, panelists will lead discussions on how to help today's young people prepare for the complex economic and financial world that they are growing up in. Click here for more information.
Asset Building Collaborative Regional Meeting
Come along to our first regional meeting, "Building Better Financial Futures", which will be held in Farmington on the morning of October 18th, hosted by Farmington Bank. You'll get the opportunity to network and learn about resources to help low and moderate income individuals and families to increase financial stability, with a special focus on workforce development issues and how they relate to financial stability. For more detail see the agenda here, and register here.
Your Money Your Goals Training
United Way is sponsoring a one-day training in the use of the Consumer Financial Protection Bureau's Your Money Your Goals manual, designed for front-line staff to assist clients to improve their financial stability, address debt, achieve savings goals etc (see here for more information about the manual). There are two dates for the training, October 20th OR November 29th. Both trainings will take place at the United Way office on James Street, in New Haven, from 9am-3pm. Please follow this link or contact Joy Duva at 203 691 4203, [email protected] for more information.
CFED Asset Learning Conference
Some of our members attended the 2016 Asset Learning Conference in Washington DC, Sept 28-30th. The event was opened by Juliet Garcia, who told her personal story of how she benefited from her Mexican immigrant father's insistence on putting something aside from his paycheck every week, enabling her to go to college and eventually become the first female Mexican- American president of a U.S. state college or university. Over 1300 individuals from across the country participated in the subsequent 90+ plenary sessions, concurrent sessions, workshops and applied research forums providing perspectives from government, banking, labor union, non-profit, private, and university sectors on topics such as the state of the asset building field, racial wealth inequality, public policy priorities, and advocacy to advance financial and economic opportunity. Over 500 attendees weathered the rain to visit the offices of their congressional representatives to discuss local and national policy proposals such as expanding the Earned Income Tax Credit, supporting Assets for Independence, and increasing funding for the Volunteer Income Tax Assistance program. Materials from the conference are available here.
The latest research that matters
Want to prevent homelessness? Just give people money
Research has found that to help people avoid becoming homeless (and avoid all the associated financial and social costs of that) it may be more helpful to simply give them a lump sum of cash to help them avoid the shocks that are so often the cause of homelessness. See here for more. Shocks (unexpected expenses or loss of income) are directly related to income volatility... see below for more.
The slipperiness of payday lenders
As regulations make life difficult for payday lenders, they find other ways to continue lending money on terms that those borrowing really cannot afford. This article explains how in Georgia, which has strict regulation of payday lenders, there has been a steep increase in auto title and installment lending, with terms similar to payday loans. Further regulation to combat these types of loans may be helpful (and see here for the ways that Connecticut legislators are helping with that), but the slipperiness will continue as long as there is demand for such products. One answer may be to provide affordable short term loans, as the article suggests, though perhaps we should think a little deeper and examine why it is that so many people find themselves needing these loans so urgently....income volatility perhaps? (read on...)
Income volatility on the rise
Take just 3 minutes of your time to watch this simple video which explains why income volatility exists, how widespread it is, and how destructive it is.
Overdraft fees are great business!
Banks are making more money from overdrafts, which is another way of saying that more and more people are going overdrawn and incurring overdraft fees. These fees can pile up, in some cases costing customers more than if they had taken a payday loan to cover whatever expense it was that put them over their balance. Not to overdo the theme, but income volatility is a key reason why people find themselves going overdrawn, and so further and further into the red.
Can overdraft policies change?
Read here for some suggested solutions to the overdraft problem - the Center for Responsible Lending suggests that overdraft fees be reduced to a reasonable rate, and proportional to the (relatively low) cost to the institution covering the shortfall, limit fees to one per month and six per year, and allow customers to repay their overdrafts in affordable installments.
News you can Use
Shared Accounts as a way to save?
The FinTech company Simple, which currently offers an online checking account with state of the art budgeting/goal setting tools is setting up a new hybrid shared account. It will allow two people to maintain their own, personal accounts, but track each other's activity and contribute to and track shared savings goals (see more here). Designed for all different types of partnerships, it has potential not only to smooth financial relationships between couples or parents and their children, but also to offer a way for people with disabilities to be supported in managing/saving money while maintaining maximum control over their own finances. Also worth noting that the Simple checking account is a NO OVERDRAFT account!