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 the fiscal cliff deal, financial products, housing, credit and debt.
The Fiscal Cliff
The big news story this week for many people in Washington was the fiscal cliff deal. Aleta Sprague breaks down some of the asset building implications of the deal here on The Ladder. David Leonhardt for the New York Times and Greg Kaufmann for The Nation are both cautiously optimistic that the deal represents a success for Obama’s agenda, identifying the extension of low-income tax credits and unemployment insurance as key pieces. Imara Jones for Colorlines isn’t quite so sure: he writes that the deal props up “economic wrongs embedded in our tax code.”
I never imagined that I’d include not one, but two articles about Justin Bieber in the weekly news round up, but this week “The Beebs” made headlines by making a foray into the prepaid card market. David Migoya for the Denver Post reports that a company called BillMyParents Inc. has secured Bieber to pitch a prepaid card to teens, whose parents may want more control over their kids’ spending. Bloomberg News adds another interesting dimension to their coverage of this story, reporting on another prepaid card product story: a new card marketed to people overcoming addiction. The card charges a high monthly fee and cannot be used at liquor stores, bars, casinos and the like, nor can you take out cash from it. In less celebrity-oriented news, the city of Charleston, South Carolina is welcoming its new Bank On program to the growing network of Bank On’s across the U.S. aimed at helping low-income consumers get connected to safe and affordable products.
American Banker reports on how the U.S. mortgage settlement is being paid out and finds that California homeowners have received 41% of the national pool of funds for relief. Research Fellow David Rothstein is concerned that other states are getting shortchanged: while Ohioans make up 3.7% of the U.S. population and represent 3.2% of foreclosures, they’ve received less than 1% of the settlement dollars. The St. Louis Business Journal reports that Bank of America’s $335 million settlement to compensate black and Latino borrowers for discrimination has been slow coming: affected borrowers were notified 5 months later than planned about the settlement. Meanwhile, in New Jersey, research shows that people receiving rental assistance are often shut out of areas with high-performing schools due to zoning laws.
Health and Equity
A tenant rights group in New York (the Urban Homesteading Assistance Board) reports that people living with HIV and AIDS have been discriminated against by two large realtors who refused to accept their HASA benefits (HIV/AIDS Services Administration) for rent. UHAB writes: “The program operates under the assumption that without access to housing, folks’ immune systems will suffer and surviving with the disease will prove even more arduous. Therefore, housing is an essential tool in combating HIV/AIDS. To put it simply, housing is healthcare.” Deseret News reports that 130 million Americans have no dental coverage whatsoever and only 20% of the country’s practicing dentists accept Medicaid. The result is poor oral health outcomes which can have spillover effects on job prospects and income.
Credit and Debt
Wired looks at the increasing role of tech entrepreneurs in the financial services marketplace. Specifically, data-savvy companies are creating new products that resemble payday loans, but develop elaborate risk profiles of clients based on huge amounts of customer data. U.S. News explains the role that student loan debt and payments have on credit scores. Bryce Covert writes about what happens when you try to live debt-free: you may find yourself without a credit score at all, making it hard to be approved for loans down the road. ProPublica continues its coverage of the family burdens of student debt. Morgan State is piloting a new financial education program for its students, aimed in part to help students manage and understand their debt. Professor Marybeth Gasman explains that historically black colleges have a particularly high need to work with students to manage finances and that this program sets an important precedent.
San Antonio, Texas is piloting a new program to get every high school senior to fill out the FAFSA (the form that determines eligibility for financial aid for higher education). As Rachel Black has reported previously, getting students to sit down and fill out this form is a small intervention that goes a long way.
Marybeth Foster of the Iowa Credit Union Foundation writes for Spotlight on Poverty on the role credit unions can play in breaking down barriers to asset building through Individual Development Accounts.
The Oklahoma Policy Institute has an important piece reflecting on the relationship between a legacy of asset-stripping from black and Native Oklahomans and today’s racial wealth gap.