Ownership & Assets

Seven former bank employees and contractors have come forward with allegations that “Bank of America Corp. (BAC), the second-biggest U.S. lender, rewarded staff with cash bonuses and gift cards for meeting quotas tied to sending distressed homeowners into foreclosure.” In addition, the former employees report that they were encouraged to “improperly disqualify” borrowers from loan modifications through the federal Home Affordable Modification Program (HAMP), falsify or effectively “misplace” documents, mislead borrowers on the status of their loan modification applications, and generally delay the process while raking in fees. A four-year employee explained that “loan collectors who put at least 10 customers into foreclosure, including those who were in trial modifications, were given a $500 bonus.” The employee reports paint a picture of a culture of widespread abuses across the loan modification process, and exemplify why greater federal oversight is essential to creating a financial services marketplace that is fair to consumers.

This week, the U.S. Department of Housing and Urban Development (HUD) and its research partner the Urban Institute released a new report documenting the ongoing presence of housing discrimination against people of color in the U.S. rental and home buying markets. The lengthy report and its more digestible executive summary are available here for download while a press release from HUD is available here.

In short, the report finds that violations of the U.S. fair housing laws remain all too common and contribute to broader race-based inequalities. As HUD Secretary Shaun Donovan said at the report release event, documenting the prevalence and dynamics of housing discrimination is an important part of ensuring that our country is living up to the ideals of equality of opportunity that we aspire to uphold. Donovan points out that while housing discrimination has become more “subtle,” this does not diminish its severity as a driver of inequity. The numbers in the report may seem abstract, but they represent, he said, families “denied a fair shot at the American dream.”

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 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, health and wealth, financial services, and unemployment.

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.

Americans have rebuilt only 45 percent of the wealth they lost in the Great Recession, according to the Washington Post and a new report from the Federal Reserve Bank of St. Louis.

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.

"An Assets Agenda for the States" examines current state asset building efforts with an eye toward examining those policies and priorities that are emerging as trends in this challenging economic environment. This appendix serves as a resource accompanying the paper, which can be viewed here.

Editor's note: this blog post was authored by Ambika Panday, Assistant Director of Policy & Advocacy at The Financial Clinic, and is adapted from an article that appeared originally in the Clearinghouse Review Journal of Poverty Law and Policy, March-April 2013 (pp. 492-508).

Chronic illness, poor health, and inadequate health insurance are three major obstacles keeping low and moderate-income families from building their financial security.  While it is unclear whether poor health begets financial insecurity or vice versa, the correlation between the lack of health insurance (and poor health) and poverty is unmistakable.