Ownership & Assets

Editor's note: A version of this post originally appeared on New America's In the Tank blog.

In her new book, Pound Foolish, journalist and author Helaine Olen takes a deep dive into the world of America's personal finance industry and emerges with a wake-up call for anyone who has ever taken advice from self-described personal finance gurus like Suze Orman. According to Olen, American people have too often been given bad advice on their finances, offered by salesmen with conflicts of interest. We've been sold a series of myths that enrich the purveyors and leave the rest of us struggling to make ends meet amidst the surging costs of housing, health and education --  and income stagnation. Olen's book ends with a call for Americans to open up about their financial difficulties. She says a more honest conversation can help to pave the path for positive change in the financial service marketplace. What would a candid conversation look like – and how do we begin to change a culture that treats personal finance as a taboo topic? Following the public event we had with her earlier this week, I sat down with Olen to explore how to start that new conversation, and what it looks like today, on this In the Tank podcast. Have a listen here.

Also be sure to check out Olen's piece from earlier this week for the Guardian in which she looks at the retirement security crisis and the failings of the 401(k) in greater depth.

The Asset Building Program hosted journalist and author Helaine Olen yesterday for a conversation about her new book, Pound Foolish: Exposing the Dark Side of the Personal Finance Industry.

The Asset Building Program’s Justin King began the conversation by noting the extraordinary losses in wealth for American families during the Great Recession, which correlate with the growing public attention to the wealth gap. A common refrain is that our collectively insufficient level of savings is just part of “American culture” – but King argued this framing fails to recognize the role of policy in shaping culture. The personal finance industry communicates the message that Americans’ financial troubles are the result of personal failings, when in fact, they are working within a system of policies that often sets them up to fail.

Meet Gary Bloch, a family practice doctor living and working in Toronto, Canada. Dr. Bloch takes the time with each patient he sees to remind them to fill out their tax returns, knowing that many will see a refund and be able to claim various tax credits. As he explains in this piece for The Globe and Mail, "The link between health and income is solid and consistent – almost every major health condition, including heart disease, cancer, diabetes, and mental illness, occurs more often and has worse outcomes among people who live at lower income. As people improve their income, their health improves. It follows that improving my patients’ income should improve their health."

The connection between income and health is both clear and simple: if patients collect the refunds and tax credits they are eligible for, they will boost their income and be much better able to meet their immediate health care needs and stay healthy in the long term.

As I've written about in the past, health problems compound financial ones and vice versa. I would guess that by initiating these conversations about income and tax filing with patients, Dr. Bloch is learning a great deal about possibly the largest sources of stress in his patients' lives, is better able to understand any financial limitations patients' may have in following his medical directives, and is gaining the trust of his patients.

Editor’s note: This post was authored by Vishnu Sridharan, Director of the Make Your Path (MY Path) Program at Mission SF Community Financial Center in San Francisco, California and a former member of the Global Assets Project at New America. 

To mark the launch of Financial Literacy Month in April, the Council for Economic Education will release a new set of standards to establish what youth should know about money by the end of 4th, 8th, and 12th grade. The state of Florida is considering passing a bill that requires that “financial literacy must be included in high school graduation requirements.” An increase in attention to financial literacy is a positive development. However, growing research shows that financial literacy alone is “not sufficient,” and that what genuinely impacts the economic trajectory of youth is the ability and opportunity to act on their knowledge. As such, we might be better off focusing not on financial literacy initiatives as such, whose primary aim is to impart information, but instead on financial capability initiatives, which also include a strong behavioral component.

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, retirement, assets and debts, and asset limits in public benefit programs.

Or, so should have been labeled the justification to cut SNAP in the budget proposal from House Budget Chair Rep. Paul Ryan (R-WI) yesterday. Underlying this move was the need to increase integrity in the program. In its own words: “These programs also have little incentive to root out waste, fraud, and abuse…"

And the compelling example of why this is necessary?

“In Michigan, two lottery winners received SNAP benefits.”

Last month, we wrote about a recent push in Hawaii to eliminate the state’s TANF asset test. A new report and proposed legislation suggest that similar changes are on the horizon in Arkansas. Let’s explore why it’s so important that these reform proposals are emerging right now.

The Los Angeles Times has a piece out today about the phenomenon of "no press release" clauses that are a regular part of FDIC settlements with banks. Essentially, "the government cut[s] a deal with the bank's lawyers to keep [the settlement] quiet: a 'no press release' clause that required the FDIC never to mention the deal 'except in response to a specific inquiry.'"

The Times explains that "Since 2007, 471 U.S. banks have failed, nearly depleting the FDIC deposit-insurance fund with $92.5 billion in losses. Rather than sue, the agency has typically preferred to settle for a fraction of the losses while helping the banks avoid bad press." The settlements the Times explored cover a whole range of alleged banking violations, including "reckless loans to homeowners and builders; falsified documents; inflated appraisals; lender refusals to buy back bad loans." Furthermore, "At least 10 [of the] undisclosed settlements involved officers and directors accused of contributing to the collapse of their own banks."

These "no press release" clauses allow banks to avoid major hullabaloo following even multi-million dollar settlements with the FDIC. Theoretically, settling has benefits for both the FDIC and the banks in question: "Defendants benefit by settling because they can avoid admitting guilt and limit the damages they might face in court. The FDIC benefits by collecting money without the hassle and expense of litigation." But, as the Times points out, the phenomenon of "no press release" clauses is both an aberration from past policy and raises some serious concerns about the transparency of settlements and the effectiveness of government regulation of bank actions.

Fresh off the presses are two reports highlighting the dismal state of college affordability: the first was released Wednesday by the State Higher Education Executive Officer's Association showing that college costs rose 8.3 percent last year and the second from Sallie Mae released last Tuesday (slightly less fresh) showing that less families are savings for college and thos

Reniqua Allen and Hannah Emple explain how and why America's racial wealth gap became a gulf. Tara Maller reveals what makes sanctions a success - or failure - and what she expects from the ones targeting North Korea and Iran. Elizabeth Weingarten hosts.