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The Ladder

A Blog from New America's Asset Building Program

No, Seriously, Don't Buy Me Anything for Christmas

December 23, 2009

If you haven't finished your holiday shopping...don't?

Well, at least think long and hard about how much you're spending and why. Our own Dave Newville has a nice piece up on CNN.com about the importance of saving--even during the holiday season.

Dave says:


The Consumer Financial Protection Agency and the Coming Paradigm Shift in Financial Services

December 23, 2009
Cross posted at Huffington Post

Once Congress closes the door on health care reform, the next legislative fight on deck is how to reform the financial sector that led us to the precipice of economic catastrophe. I’m sorry but business as usual is not really an acceptable option. We have the right to expect a major overhaul of the regulatory regime under which banks, mortgage lenders, and financial service providers operate. Much work is already underway.

November Personal Savings--4.7% and Holding

December 23, 2009
Personal Savings Rate from Calculated Risk

The BEA is out with November's numbers on Personal Income and Outlays, including the new personal savings numbers. While the personal savings amount increased slightly--to $525.1 billion from $516.7 billion--from October to November, the rate stays essentially flat at 4.7%.

Calculated Risk has a pretty graph showing the recent trend, reprinted here, which shows the trend for the year. CR also guesses that we might see personal savings reach as high as 8%. I'm skeptical that we'll see numbers that high, and skeptical that even these numbers are here to stay without more policy interventions to promote saving in the long run. However, I'd be delighted to be wrong.

Building Assets with Online Communities

December 16, 2009


With the President having endorsed an asset building agenda and called for the nation to move from a "borrow-and-spend" economy to a "save-and-invest" economy, the opportunity exists for a fundamental expansion of asset building policy. Yet, when you talk with the person on the street, very few are aware of what asset building is or what its benefits can be.   

Payday lending arithmetic

December 15, 2009
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Once again, San Francisco is lending a helping hand to its hardworking residents. On Thursday, Mayor Gavin Newsom and City Treasurer Jose Cisneros will launch Payday Plus SF, a low cost emergency loan program as an alternative to the city’s many payday lenders.

The program is the natural result of adding a dense concentration of highly-motivated asset building advocates to a dense concentration of high-interest payday lenders. And in contrast to some payday loans, its numbers make sense.

Africa: The Last Frontier for Microfinance?

December 15, 2009
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Undoubtedly, Africa is the last frontier for microfinance. Almost all of Africa’s poor are unbanked; in Ethiopia for example, only 1% of the rural population has access to formal financial banks. Similarly, in rural Niger, there is one bank branch for every 844,000 people.

To be sure, high rates of illiteracy and HIV/AIDS coupled with dispersed rural population across a vast landscape do not always lend themselves well to the traditional Grameen- style microfinance model; the financial needs of Africa’s poor are different and delivering such services a challenge. Fortunately, CARE’s recent report on the microfinance sector in Africa reveals not only the continent’s deafening potential but that many in the microfinance field are innovating several products and programs in order to meet it.

Asset Limits Reform Moving Forward in Consumer Protection Bill

December 10, 2009

H.R. 4173, which would implement significant reforms and improve consumer protection significantly, is on the floor of the House as we speak. Others will comment on the bill as a whole, but I want to draw attention to what is now one tiny little piece of that bill.

Congresswoman Niki Tsongas and her staff introduced a series of amendments related to credit scoring practices and the impact of asset limits in federal means-tested programs on the banking behavior of consumers. All three amendments have been included in the "Manager's Amendment" and are part of the legislation that the House will vote on (and likely pass) in the coming days. The assets limit amendment is a simple one, it directs a research unit within the new consumer protection agency to:

"research, analyze and report on: experiences of traditionally underserved consumers, including un-banked and under-banked consumers, regarding consumer financial products or services, and the impact of Federal policies, including resource limits in means-tested Federal benefit programs, on such consumers in influencing banking behavior."

In Australia, Matched Savings in Times of Crisis

December 8, 2009
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It took us a little while to catch this, but Australian Prime Minister Kevin Rudd has announced a plan for low-income earners affected by the financial crisis that includes a matched savings component.
The matched savings program is an extension of SaverPlus, which was developed by ANZ Bank and the Brotherhood of St. Lawrence in order to help those on low incomes establish a long-term savings habit. The participants set a savings goal, and receive financial education and other support in reaching the goal. Once the goal has been reached, ANZ matched their savings dollar-for-dollar, up to $500.
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