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 housing, poverty, financial products, and government assistance programs.
The American Civil Liberties Union published a full-length report this week on how Wall Street’s actions leading up to the housing collapse disproportionally hurt black and Latino communities. The report follows up on the ACLU’s history of action in this area, framing equal access to housing as a civil rights priority in the country. The District of Columbia Housing Authority continues its mission to provide services to another needy group, homeless veterans, by taking advantage of a federal grant to provide them with housing vouchers to find safe, affordable housing. In another piece of good news for the state of housing for low- and middle-income Americans, the Ohio Supreme Court has ruled in favor of a homeowner who fell victim to a complex securitized mortgage scheme that ensnared so many Americans when the housing bubble collapsed in the late 2000s. The court found that Freddie Mac, the mortgage backer in the case, had no standing to bring suit against the homeowners for defaulting on their mortgage because the promissory note was made to Wells Fargo, and Freddie Mac could not immediately produce the promissory note during its first action against the homeowners in local court. Essentially, the ruling requires banks and mortgage backers to “clean up the paperwork” and to take more responsibility for the loans they guarantee. As a sign of an improving housing market, NPR reports that foreclosed homeowners are returning to the housing market to favorable outcomes.
Poverty and Inequality
A new study by the Joint Center for Political and Economic Studies and Virginia Commonwealth University’s Center on Human Needs finds evidence for drastic variations in life expectancy between rich and poor neighborhoods of Baltimore. The results suggest that the variation may be as much as 30 years in different parts of the same city. The Baltimore Sun provides a local perspective on the results. The U.S. Census Bureau released its Supplemental Poverty Measure for 2011 this week. Besides calling the results “grim,” Dylan Matthews for the Washington Post points out perhaps the most interesting part of the report: its measure of how effective certain government programs are at fighting poverty. TANF makes a weak showing, while Social Security is shown to contribute the most to reductions in poverty.
In another report on poverty out this week, the Center on Budget and Policy Priorities released a state-by-state analysis of inequality across the country. Part of the accompanying commentary on the report nicely summarizes the findings: the past few years have represented “a lost decade for low- and middle-income families.” For a local perspective from one of the states with the highest rates of inequality, see the News Star in Louisiana, which laments the state’s status as “sixth among states for the size of the income gap.”
Kevin Walker of the Northwest Area Foundation reported on assets and wealth among Native America communities in the Ladder this week. He describes the efforts of his organization’s efforts to promote asset-building initiatives within Native American communities (check out part one and part two). Representatives from the National Congress of American Indiansappeared on a panel of experts this week to discuss asset building at an event hosted by the Insight Center for Community Economic Development. For our reactions to the event, see our recent summary on the Ladder.
Government Assistance Programs
A new social services mall opened this week in Cincinnati, which will offer an integrated service center for needy citizens in the community. The idea for the mall has been in the works for some time, but the plan only just recently passed significant political hurdles to be able to move forward. Also in Ohio, however, recipients of food stamps will see their benefits decrease by $50, putting additional strain on struggling families in the state. A plan is being considered in Maine that would offer tax credits to working families as part of an effort to keep families in financially precarious situations from falling deeper into poverty.
The state of Ohio is planning to offer tax payers the option to receive their tax refunds in the form of a prepaid card, saving unbanked individuals the risk of cashing their refund check at an alternative banking establishment like a check-cashing service provider. Supporters of the plan also site cost-savings as a reason for pursuing it, as the state would save money by issuing cards instead of paper checks. Prepaid cards were also highlighted this week as a possible financial product to be offered by banks outside of their regular accounts products. The reloadable cards would give unbanked consumers an alternative to cash, and would afford them some of the benefits of a bank account like their being able to pay for purchases electronically, though it is expected that the funds would not be FDIC-insured. Finally, another bank, MCB Capital, based overseas in Mauritius, is trying a different strategy to reach the unbanked in the U.S.: offering micro loans to help consumers struggling with bad credit. See, however, this article from GOOD magazine which casts doubt on the efficacy of micro lending in developing countries.
Next week is Thanksgiving! We hope readers have a healthy, happy Thanksgiving. We'll return with the Asset Building News Week on November 30th.