Newsletter #13: September 3, 2019
After a short break, the CT Asset Building Collaborative newsletter is back with issue #13. From now on it'll have a slightly new format, with more frequent, but shorter and more focused issues. This issue will focus on debt and credit. The newsletter will still have the same news you can use, and research that matters. We’re always interested in feedback – email us anytime and let us know what you think!
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Next peer learning coming up.
Save the Date! Our next peer learning event will take place the morning of November 5th, at United Way in New Haven. We’ll be focusing on practical strategies for integrating financial health support and basic social service provision. For example, how do food pantries support their clients with the root causes of their financial problems, and how do financial counseling providers access users of food pantries? If we can make it work, it’s a win-win for everyone. Come and learn about why it’s important, and what we know can work.
Local news you can use
Integration in practice.
Talking of integrating financial health and basic services, the Hartford Foundation recently gave a grant to Foodshare, a local food pantry, to do exactly that, by giving them resources to provide services above and beyond food assistance. In the words of Hartford Foundation Community Investments Officer Dawn Grant, “research shows food pantries need to progress beyond food distribution and examine the social and health determinants of the people they serve”. Attend our peer learning in November to learn more about how we can put this into practice!
Research that matters - debt and credit
topping the problem before it starts – what’s a reasonable usury cap?
Two front-of-the-pack democratic candidate contenders, Warren and Sanders, are talking a lot about debt, mainly student loan debt, which is a huge concern – see disturbing new data from JP Morgan here. It’s great that others have begun to talk about it too. But they're also talking about other types of debt. For example, together with Senator Ocasio-Cortez, Senator Sanders has proposed a 15% usury cap on credit cards and other consumer loans. Is this unreasonable regulation that could destroy the productive lending market? Or could it improve well-being (given the well-researched connection between debt and poor health) and kick-start the economy by enabling people to spend rather than pay down debt? I tend to lean towards the latter conclusion, but also value historian Anne Fleming’s opinion that 15% is simply too low and would risk pushing poor people who need small, short-term loans into the hands of unregulated loan sharks. She argues that 36% is a more reasonable cap.
Helping those struggling with debt – what can we do?
Once people are in debt that they can’t afford, how ca we help? Medical debt is a particularly serious problem – The National Consumer Law Center has a helpful 2-page guide on what states can do to help residents with medical debt, and prevent future problems. The Aspen Institute also has a super helpful guide for what local governments can do to address the consumer debt crisis. Once someone has fallen behind on repayments, they may become acquainted with the third-party debt collection industry. The Consumer Financial Protection Bureau (CFPB) is issuing new rules to govern this industry, which consumer protection advocates argue is too lenient on the collectors. Learn more here, and send in your comments.
The consequences of falling behind - dealing with bad credit
Once someone has fallen behind on payments they may be stuck with bad credit, which affects future access to loans (they’ll end up paying much more, if they can get any loans at all), and jeopardizes access to jobs and housing and more. An excellent new book, Credit Where it’s Due, dives into this issue, as well as telling the story of the Mission Asset Fund, which offers people an innovative way to build and repair their credit. It’s a great, concise read, and/or you can watch a presentation by the authors here.
Newsletter #1: April 1, 2016 link here
Newsletter #2: June 3, 2016 link here
Newsletter #3: October 4, 2016 link here
Newsletter #4: December 2, 2016 link here
Newsletter #5: March 6, 2017 link here
Newsletter #6: June 12, 2017 link here
Newsletter #7: September 5, 2017 link here
Newsletter #8: December 14, 2017 link here
Newsletter #9: April 19, 2018 link here
Newsletter #10: July 24, 2018 link here
Newsletter #11: October 26, 2018 link here
Newsletter #12: March 6, 2019 link here