If a family had more than $3,000 in assets such as bank account savings or a car, the TANF asset test would have determined that they were ineligible to receive the $432 in monthly financial assistance, according to the Illinois Asset Building Group. By setting the bar for asset eligibility so low, the law disincentives people from saving – a key part of ending poverty, argues Lucy Mullany, a senior policy associate at Heartland Alliance, a Chicago-based advocacy organization for low-income populations.
Key policies of the last decade, such as the Bush Administration’s “Ownership Society,” sought to expand homeownership opportunities without putting in place effective safeguards against unchecked and unscrupulous lenders targeting communities of color with unsustainable mortgage products. Rather than correct this regulatory failure, many critics have chosen to question the viability of homeownership as a wealth-building vehicle and suggest that many people are better off renting their home.
A Chicago Chase customer contacted Ann Hilton Fisher of AIDS Legal Council in March of 2011 after his account was charged $12 because he didn’t have a single direct deposit of at least $500 into his checking account, even though he receives two disability payments from the Social Security Administration that total over $500 in aggregate. When this 47-year-old customer asked local bank branch staff to waive the fee, a bank employee suggested that the client “have Social Security send both checks together,” which is not feasible.
When Roxie was laid off from her job as an echocardiogram technician at a hospital, her finances came under significant strain. Although she had some money saved and found freelance technician work, her income was less than half what it used to be and she couldn’t afford health insurance. On top of that, she was the sole breadwinner helping to raise three grandchildren. The savings eventually disappeared and she fell behind on her mortgage and other debts.
A recurring theme throughout the conference was the gap in the amount of assets—such as savings for emergencies or retirement, home equity, and investments—that women own versus the amount of assets that men own. This disparity is called the “wealth gap.” Assets matter because they mark the difference between getting by and getting ahead; they are the financial building blocks that allow individuals to weather a crisis, improve their financial situation, and pass on wealth to the next generation.