The Ladder

The Asset Building News Week is a weekly Friday feature on The Ladder, the Asset Building Program blog, designed to help readers keep up with news and developments in the asset building field. This week's topics include racial inequality, retirement, food security, and financial services.

If saving is the first step to economic success, current tax policy is the gate at the bottom of the stairs. As a recent Congressional Budget Office report shows, most of the tax incentives associated with retirement savings under our current system are out of reach for lower income families, while the households with the highest incomes receive huge financial benefits that fortify their existing financial security. Tax policy has the potential to open the path to economic mobility by encouraging saving and ownership among those who have the farthest to climb. Instead, our system largely rewards those who would save anyway, without advancing the socially beneficial behaviors professed to be the purpose of our enormously costly tax expenditures.

The National Council of La Raza (NCLR) hosted an event today to release “Latino Financial Access and Inclusion," a new report that examines the relationship between comprehensive immigration reform and household financial stability for U.S. Latinos. At the event, experts from NCLR, Citi, the American Bankers Association, and a Chicago-based organization, The Resurrection Project, explored the report's findings on financial inclusion within the Latino immigrant community. The report analyzes data from a survey of roughly 1,000 low-income Latino-identified individuals across California during 2012.

Janet Murguía, President of NCLR, began the event by discussing the historical exclusion Latino immigrants have faced in the mainstream financial services marketplace. Despite myriad barriers to accessing financial services and some significant economic challenges, this report found that Latino consumers were actively prioritizing saving, utilizing a range of financial products to meet their needs, and displaying savvy engagement with financial service providers.

The report also builds the case for comprehensive immigration reform and ensuring a path to citizenship by demonstrating the variance in financial stability and engagement by citizenship status. For example, among immigrants who had been in the U.S. the same amount of time, naturalized citizens were more likely to be engaged in the mainstream financial services sector than their non-citizen counterparts. As Murguía put it, U.S. citizenship opens the doors to not only better job opportunities and education, but also greater financial inclusion. When combined, these resources create a path to upward economic and social mobility. Thus, the report explicitly frames citizenship status as an asset and calls for the current immigration reform conversation to better reflect the economic needs and opportunities of the Latino immigrant community.

That's the title and subject of a new report from the Heritage Foundation, written by Stuart Butler, David John, and Sean Rust. The report takes a look at the status of savings in the US, impediments to savings, the international track record of prize-linked savings programs (where in addition to or in place of interest, savers earn the opportunity for prizes, mostly cash) and the possibilities of and obstacles to such a program in the US.