Banking and the poor

The Underrated Role of Financial Services in Reducing Poverty

Ethan Geiling and Genevieve Melford, Corporation for Enterprise Development - Posted July 11, 2011

Something as simple as a checking account can be the first step in saving, planning for the future, building credit, and climbing the economic ladder. Unfortunately, basic financial services like checking accounts are out of reach for many low-income American families.

If we’re going to help connect these people to genuine opportunity, now is the time to take some simple but important steps to provide better financial products for low-income Americans.

According to the Federal Deposit Insurance Corporation (FDIC), approximately 8 percent of all American households are unbanked, with neither a checking nor a savings account. Another 18 percent are underbanked, meaning they may have an account but they also rely on non-bank financial services like check cashing and high-interest payday loans.

This financially underserved population of over 30 million households is disproportionally low-income and minority. Forty-three percent of households with a yearly income below $30,000 are either unbanked or underbanked. Nationally, 54 percent of black households and 43 percent of Hispanic households are unbanked or underbanked, compared to only 18 percent of white households.

These households spend an enormous amount of money on financial services for which most Americans pay little to nothing. The average full-time worker without a bank account spends $40,000 over the course of his or her lifetime to turn income into cash.

To read this entire, very challenging report click here.

Ethan Geiling is a policy and research associate at the Corporation for Enterprise Development. Genevieve Melford is director of research at the Corporation for Enterprise Development.

Report from BECK community service with CitySquare

We received the following report from our good friends at BECK after a great group of their interns joined CitySquare's WorkPaths' participants in framing houses contracted for construction with Dallas Area Habitat for Humanity.  What a great partnership all around! 

Thank you, BECK

If you’re a fan of community service, affordable housing projects, nonprofit work or just sweating profusely while you dream of an air conditioned office, then I suggest you look into working with organizations like CitySquare and Dallas Area Habitat for Humanity.

This is exactly what BECK’s interns did the June 22, 23 and 24th as part of an intern service project which took place in at 2717 and 2711 Silkwood Drive in South Dallas. It was the result of a group from CitySquare’s WorkPaths department, who teamed up with the BECK interns to frame two houses for Dallas Area Habitat for Humanity in three days.

WorkPaths is a department at CitySquare, a local nonprofit and provides tools and resources to adults who, for various reasons, lack necessary job training and education. WorkPaths partners with Dallas Area Habitat for Humanity on projects allowing them to provide further training and implement construction skills they learned in WorkPaths’ construction training program, Build4Success. As for the interns here at BECK, it was not only a chance to get to know one another, but also an opportunity to work with an impressive organization filled with dedicated individuals who are making a positive impact.

The group included Lynsee Turner, Greg O’Bryan, Molly Lyons, Caleb Pritle, Jake Maxton, Trevor Brown, Dane Soren and Dylan Dorsey. It would not have been possible without the contribution of a few notable BECK employees - Greg Powell, Holly Crowder, Jim Gettman, Gillette Berger, Tim Kuykendall, Rachel Baumann, and Beth Butler. The willingness of the people at BECK to engage in a project such as this reflects the values of this company and is a credit to its already admirable standing within the local community.

David Claros, in reference to the workers from CitySquare, noted, “To see people like that trying to get their life back together was very humbling and made me appreciate the opportunities I have been given… It really put in perspective what I have been blessed with.”

Lynnsee Turner felt that “being a part of the summer 2011 CitySquare / Dallas Area Habitat for Humanity Intern Event was an awesome experience! Not only did we get to use the knowledge that we have learned the past few years in different classes, but we were also able to give back to a community in need, while having fun.”

Lacey Helm was fortunate to observe “the effects of hard labor on the body, but also the satisfaction from seeing with your eyes the production you have physically done.”

The opportunity to work with the people from CitySquare, although difficult, was incredibly rewarding.

Participating Interns included Lynnsee Turner, Greg O’Bryan, Molly Lyons, Caleb Pritle, Jake Maxton, Trevor Brown, Dane Soren, Dylan Dorsey, David Claros, Lacey Helm, Nick Jencopale, Javier Altamirano, Andrew Winchell, Sam Gunderson, Abigail Steck, Ricky del Monte, Billy del Monte, and Sean Luke. The majority of these interns will most likely never make their living in the labor side of construction.  However, an appreciation and respect for those who do will prove to be invaluable. Apparently, scorching heat and difficult labor are ideal conditions under which to form friendships. While the purpose of the internship is to provide a glimpse into potential careers, it is also necessary to provide a sense of social responsibility. Thankfully, this responsibility is standard procedure here at BECK.

Employment training opportunities at CitySquare

The following notice came out earlier this week from Andrea Bills, WorkPaths' Director, about CitySquare's employment readiness training programs.  I thought this information was worth sharing here.  If you live in Dallas, help us spread the word!
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Path2Success Orientations are currently being held at WorkPaths (see location below). The next orientation will be Wednesday, July 13th at 10am at the RTLC. All information regarding information is the same as below. If you have questions about Path2Success, please email Dana Morrison, Path2Success Program Manager, at dmorrison@citysquare.org and she can also get you flyers.

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WorkPaths is happy to announce an expanded FALL session of Build4Success. Applications will be accepted beginning 2pm July 12th thru 3pm August 4th, 2011. The first orientation for Build4Success will be held Tuesday, July 12th at 1:30pm at WorkPaths:

Ransom Technology Learning Center
1824 Hall Street (corner of Hall and Munger)
Dallas, Tx 75204
Call 214-823-4409 x 300 to RSVP or x 301 for directions
Center Hours for Information: Monday – Thursday 10am – 4pm

No information will be given over the phone; all interested candidates must attend an orientation. Interested parties can call x 300 to reserve a place at upcoming orientations; there will be an additional orientation on Wednesday, July 13th at 1:30pm. More orientation times and locations will be upcoming.

The application process for this program must be completed by 3:00 pm on August 4th. If you have people who are interested in the program, encourage them to get started at once. The application process takes several steps, the first being orientation. There are limited training slots and referring partners are encouraged and welcome to attend the orientation too!

Please email Tennille Robertson, Build4Success Program Manager, if you have questions: troberston@citysquare.org – or you can email me at abills@citysquare.org.

All applications must be completed and submitted by August 4, 2011 at 3:00pm! This includes testing, documentation and paperwork.

DO NOT have candidates contact individual staff members but rather please ask them to call 214-823-4409 x 300 (also listed above) to RSVP or for information regarding orientation times and locations and we will call them back.

Everything has to be done in 4 weeks!

Thank you!

Andrea Bills
WorkPaths Director
CitySquare

Creating wealth for the wealthy

This report appeared in the Philanthropy News Digest and suggest that the wealthy in the U. S. receive numerous hidden benefits, many obvious and some not so obvious to the uninformed.  Certainly, the source of the report is well-respected and the basis of the information grounded in solid research and investigation.  Not something we're likely to hear about on the Sunday morning talk shows this week.  Have you noticed, no one seems to talk about "the poor,"  those folks who live in and struggle with poverty. 

Study Finds Federal Asset-Building Programs Reward the Rich, Penalize the Poor
Posted on September 24, 2010

The federal government spent nearly $400 billion in fiscal year 2009 to help people save money and build wealth, but the vast majority of the money went to the nation's richest taxpayers, a new report from the Annie E. Casey Foundation and the Corporation for Enterprise Development finds.

According to the report, Upside Down: America's $400 Billion Federal Asset-Building Budget  (26 pages, PDF), the top 1 percent of families received an average of $95,000 in assistance last year, while families making $100,000 annually received $1,600, and the poorest received less than $5. The inequitable distribution is all but invisible, the report found, because the wealth-building strategies are tucked into the federal tax code — as deductions, credits, and preferential rates — rather than in the government's annual discretionary budget, where they would receive more scrutiny.

By embedding asset-building strategies into the tax code as deductions and exclusions, the federal government naturally favors those who bear the heaviest tax burden. Indeed, the wealthiest 1 percent of taxpayers received 45 percent of the federal asset budget while contributing just 27 percent of total tax revenue. Policies that depend on direct outlays in the annual budget, including the Assets for Independence program, which provides matched-savings accounts for low-income families, have proven successful in encouraging savings, homeownership, and business startups. Yet, because they are visible, such programs often become fodder for partisan political battles.

"If we are serious about cutting the deficit, Congress could start by trimming these upside-down subsidies and creating a more equitable approach," said CFED president Andrea Levere. "As Congress debates whether to extend the Bush-era tax cuts for the wealthy and the president's fiscal commission develops recommendations to balance the federal budget, they should remember that we could shave $1 trillion off the deficit in the next decade simply by capping some of these benefits."