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 family balance sheets, public assistance, and housing.
Family Balance Sheets
A new brief on the effects of the Great Recession was released this week as part of the Recession Trends initiative of the Russell Sage Foundation and the Stanford Center on Poverty and Inequality. The short study, titled “Wealth Levels, Wealth Inequality, and the Great Recession,” showed that despite the gains in the recovery after the recession, median family wealth has not returned to 2003 levels. The authors suggest that a big reason for this is that, while stock prices have increased, housing prices have not fully recovered, meaning that lower-income households, whose greatest source of wealth is more likely to lie in home equity, have not seen their wealth recover as quickly. Sam Frizell for Time and Anna Bernasek for the New York Times covered the report.
On the other side of the balance sheet, a new report from the Urban Institute examined the geographical distribution of delinquent debt across the U.S. The authors take “delinquent debt,” a term meaning debt that is past due or in collections, to be a measure of financial distress, which can then be examined for spatial patterns across the country. Among the main findings are that “35 percent of adults with a credit file have a report of debt in collections” and that “debt in collections and debt past due are concentrated in the South.” Jonnelle Marte covered the report for the Washington Post’s WonkBlog.
Finally, another report was released this week about the status of a foundational element of American families’ lifelong balance sheets. The Social Security and Medicare Boards of Trustees completed their annual financial review of the two programs and released a report on their findings. As has been reported for years, the financial status of Social Security is bleak in the long-term without significant policy attention paid to fixing the issue. Treasury Secretary Jack Lew issued a statement on the release of the reports. For those who would like to skip the combined 500-page reports, AARP published a short summary in the form of “8 Facts You Need to Know About the 2014 Social Security Trustees’ Report.”
There has been a significant amount of political discussion about the “heat and eat” provision in the laws governing the SNAP program. While the political rhetoric has branded it a “loophole,” Josh Voorhees for Slate explained why this is not the right framing. The point he makes is that the provision was designed to acknowledge that low-income families often have to choose between heating their home and putting food on the table, so when a state determines that a family is in need of heating assistance, no matter how small the actual dollar amount of that assistance may be, it gives them more money for food so that they don’t have to choose between feeding their family and heating their home.
Meanwhile, low-income residents of Norwalk, Connecticut are concerned about completely losing access to services after the shuttering of the city's anti-poverty agency, NEON (Norwalk Economic Opportunity Now). The agency administered many of the essential safety-net programs that served the community like Head Start and energy assistance in addition to coordinating access to other services. The local NPR station, WSHU, covered the story. In a neighboring state, an organization called Significance Labs is working on designing a smartphone app to help low-income New Yorkers apply for Food Stamps. But in many other states, even after a family is deemed eligible to receive SNAP, problems involving benefits transactions abound. In Iowa, a local news station reported that new rules requiring merchants to pay EBT transaction fees may cause some stores to refuse to accept public benefits. In Tennessee, a local news team investigated the high cost to taxpayers of financial institutions charging public benefits recipients high ATM fees to redeem TANF benefits. Our Aleta Sprague contributed to the investigative report.
On our blog, Julianna Lord explained the policy rationale for “Fast Track,” which accelerates eligibility for Medicaid based on SNAP eligibility. She examined California as an example of how this could be implemented in other states.
The National Fair Housing Alliance (NFHA) is filing a complaint against foreclosed-home contractor Cyprexx alleging disparities in the treatment of houses between predominately white and predominately black neighborhoods. Fern Shen for the local blog Baltimore Brew reported on how this disparate treatment is playing out in Baltimore neighborhoods.
Laura Shin described the controversy surrounding a so-called “poor door” that provides a separate entrance for residents of the affordable housing wing of a high-end New York condo building.
The CFPB released a report on overdraft fees. In his remarks on the report, CFPB director Richard Cordray noted that the report doesn’t imply that “banks and credit unions should be precluded from offering overdraft coverage,” but rather that it merely sets the stage for the Bureau to investigate whether overdraft fees constitute “the kind of consumer harm that the federal consumer protection laws are designed to prevent.” Carter Dougherty discussed the report in his article for Bloomberg and described the banks’ reactions to the CFPB’s unflattering characterization of overdraft fees.
Kirsten West Savali revisited the Debra Harrell story for the online magazine DAME and asked, “Why Do We Vilify Low-Income Black Women Simply for Being Mothers?”