Safety Net – Page 4

Banking and Credit Union Development Districts

Problem

Currently, Texas has one of the largest unbanked and underbanked populations in the country. A lack of access to financial institutions hinders families from being able to build credit and savings, and local businesses aren’t able to obtain the loans they need to build their small businesses.

Solution

Representative Eric Johnson has enacted legislation in Texas creating Banking Development Districts to help increase access to financial services in the areas that need it most. The legislation allows local governments and the state to seed new bank branches in these underserved areas with deposits from the city treasury. Building on similar efforts in other states, Johnson’s bill allows credit unions in addition to banks to establish themselves in these banking development districts, increasing the projected scale of impact.

Employee Financial Wellness

Problem

Employees often do not have time or access to resources where they can learn important information related to their financial health. Better saving habits and financial literacy help citizens become more self-sufficient and has positive effects on the community through economic growth and higher educational attainment.

Solution

St. Louis Treasurer Tishaura Jones has initiated a Financial Wellness program for city employees by partnering with different financial institutions who deliver monthly financial workshops over lunch. Financial institutions are able to reach a broader audience and they can report their trainings as charitable activities. And employees get the information they need to improve their financial management and saving habits.

Prize-Linked Savings Accounts

Problem

In Texas, more than 1 in 3 households lack a savings account. Additionally, roughly half of all Texas households do not have the savings to be able to cover their basic expenses for three months in case of an emergency.

Solution

Representative Eric Johnson has sponsored legislation to allow banks and credit unions to operate prize-linked savings account programs in which the ticket to enter is a deposit into an individual’s savings account. Prize-linked savings accounts have been proven as an effective way to reduce poverty and increase financial security, which benefits the entire community.

Employment Financial Empowerment Lunch and Learn Series (EFELLS)

Problem

Employees often do not have time or access to resources where they can learn important information related to their financial health. Better saving habits and financial literacy help citizens become more self-sufficient and has positive effects on the community through economic growth and higher educational attainment.

Solution

St. Louis Treasurer Tishaura Jones has initiated a Financial Wellness program for city employees by partnering with different financial institutions who deliver monthly financial workshops over lunch. Financial institutions are able to reach a broader audience and they can report their trainings as charitable activities. And employees get the information they need to improve their financial management and saving habits.

OregonSaves 2.0

Problem

Many workers lack short-term savings. According to the Pew Charitable Trusts, 60 percent of Americans experienced an unanticipated pay cut, trip to the hospital, spousal separation, major car or home repair, or other large expense in the past 12 months; and 44 percent of Americans said they could not come up with $400 to cover an emergency expense without borrowing or selling something. This short-term financial instability is a root cause for retirement account loans or leakage, and is putting Oregonians’ long-term financial health at risk.

Solution

My earlier work to establish OregonSaves created the first state-level automatic enrollment retirement plan, which is helping workers save for the long-term. To augment this capacity and help workers fund short-term emergencies, I’m proposing adding a short-term emergency savings “sidecar” account, funded with a participating worker’s first $1,000 in contributions. Additional contributions greater than $1,000 would be automatically diverted into the target date fund default investment. Should the worker access the short-term sidecar account, new contributions would automatically replenish short-term savings before diverting to the long-term investment vehicle. This dual account method would allow workers to seamlessly meet both short- and long-term financial goals and reduce the pressure on Oregonians dealing with emergency expenses.

Establishing a Student Loan Bill of Rights

Problem

At the end of 2016, there were 44 million Americans with $1.3 trillion in student loan debt. In Massachusetts, the average amount of debt per student is $31,466, seventh highest. As government grants and scholarships have not kept pace with the ballooning costs of attending college, students struggling to pay back their loans become prime targets by student loan servicers that are virtually unregulated in Massachusetts. Abusive debt collection practices add insult to injury for students burdened debt that threatens their long-term economic security. Borrowers who are delinquent on payments or in default on a student loan are especially at risk, which was about 25% of all borrowers in 2015 according to the Consumer Financial Protection Bureau.

Solution

My legislation establishing a student loan bill of rights provides strong protections and education for our student borrowers, while holding student loan servicers accountable to higher standards of practice. While legal action against student loan servicer misconduct has been widespread on both the state and federal level, we must establish a protective state framework surrounding debt repayment by student borrowers. This Bill of Rights protects borrowers by: establishing a Student Loan Ombudsman in the Division of Banks to educate students about their rights as borrowers, field complaints about loan servicers, and analyze student loan data for potential regulatory or legislative changes while making all data available through public record; requiring that student loan servicers be licensed in Massachusetts and operate under state-mandated standards of conduct; and giving the Bank Commissioner access to all records and evidence from student loan servicers to conduct investigations and enforce any violation of standards of conduct for the purposes of initial licensing, license renewal, suspension, revocation, or termination.

Defining the “Good Faith Effort” by Insurers

Problem

Kentucky’s current Unclaimed Life Insurance Benefits Act lacks provisions defining the ‘good-faith effort’ required of insurers attempting to inform beneficiaries of amounts owed them under life insurance policies, annuity contracts and retained asset accounts. Due to the lack of specific requirements, many beneficiaries are never informed of benefits they are due, and those benefits revert to the state when they are not claimed.

Solution

Rep. Harris has championed legislation which will require the Kentucky Department of Insurance to promulgate regulations describing specific actions, steps and undertakings that will constitute a ‘good-faith effort’ by insurers as they seek to inform beneficiaries of owed benefits. Upon its passage, this legislation will help hundreds of Kentuckians claim benefits from life insurance policies purchased by their deceased family members.

Supporting Workers in the Gig Economy

Problem

New technology has yielded a modern economy that allows greater flexibility for independent contractors, but because many of their jobs do not come with health insurance, retirement plans or paid leave, these workers are more vulnerable than many of their counterparts in the traditional workforce.

Solution

This proposal focuses on addressing the changing dynamic of work with a system of portable benefits that would allow those in the independent workforce, to access basic benefits available to workers in the traditional workforce. This safety net will save taxpayers as a whole in the long run while also caring for workers in the new economy.

Worker Fund for San Francisco International Airport (SFO) Workers

Problem

Nearly half of all Americans say they couldn’t cover an unplanned $400 expense, and nearly two-thirds of American workers would struggle to cover a $1,000 crisis. This struggle is shared by half of the 40,000 private sector workers at San Francisco International Airport earn less than $50,000 annually. With the excessive cost of housing in the Bay Area, nearly one in three airport workers commute from outside of the nine Bay Area counties to work at SFO. The nature of airport work coupled with the Bay Area’s high cost of living creates additional financial challenges for these workers including long commutes, high transportation costs, irregular work schedules and work hours misaligned with dependent care schedules.

Solution

In collaboration with airport workers and their unions and SFO and their tenant employers, the San Francisco Office of Financial Empowerment (OFE) will design and pilot a Worker Fund. We will define how employees access the funds, the amount of funds accessible to each employee, and how to administer and evaluate the Fund. The Worker Fund would provide employees access to funds to manage financial hardships such as a car breakdown, a high winter heating bill, or a medical emergency. Access to this benefit in the workplace could help workers stabilize and make ends meet, maintain their jobs, and reduce reliance on predatory financial services that can be detrimental to their financial well-being and often trap borrowers in a cycle of debt.

Housing Affordability and Community Revitalization

Seven NewDEALers have risen to the office of Mayor just this year, and their impact is already being felt. This week, Mayor Leirion Gaylor Baird announced a new tax incentive to support home buyers in certain neighborhoods as part of her community revitalization strategy. In coverage of the announcement, a local realtor talks about how the initiative could help influence a younger demographic to put down roots in Lincoln. The Mayor has also taken steps to make Lincoln a more welcoming place for all, such as signing an anti-discrimination order in November.

Banking and Credit Union Development Districts

Problem

Solution

Employee Financial Wellness

Problem

Solution

Prize-Linked Savings Accounts

Problem

Solution

Employment Financial Empowerment Lunch and Learn Series (EFELLS)

Problem

Solution

OregonSaves 2.0

Problem

Solution

Establishing a Student Loan Bill of Rights

Problem

Solution

Defining the “Good Faith Effort” by Insurers

Problem

Solution

Supporting Workers in the Gig Economy

Problem

Solution

Worker Fund for San Francisco International Airport (SFO) Workers

Problem

Solution

Housing Affordability and Community Revitalization

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