ECONOMIC OPPORTUNITY: ASSET BUILDING


Many Texans are poor, not because they don't work, but because their work pays too little to raise a family out of poverty. To ensure economic prosperity, Texas public policy must support work, make work pay, and help families build their assets. The most important thing the state can do to enhance economic opportunity is to invest in public education—from early childhood education all the way through higher education.

Recent Asset Building Publications

Policy Alert: Take Action Against Payday Lenders (09/15/2005)
On August 17, the Center for Public Policy Priorities and the Gone To Texas Coalition (including TexPIRG, Texas Impact, and Texas ACORN) called on Texas’ Consumer Credit Commissioner Leslie Pettijohn to request Texas Attorney General Greg Abbott to take enforcement action against companies that violate the state’s usury laws. You can help by contacting Commissioner Pettijohn and General Abbott and urging them to take all necessary steps to prevent payday lenders from operating outside of the law.

Letter to the Consumer Credit Commissioner (09/15/2005)
Read the letter that the Center for Public Policy Priorities and other local organizations sent to the Consumer Credit Commissioner, requesting that the Attorney General take enforcement action against payday lenders for violation of the state's usury laws.

Payday Update: Unregistered and Unregulated, Payday Lenders Put Consumers at Risk and Flout Texas Usury Laws (08/15/2005)
Since Texas lawmakers defeated HB 846"an industry-backed bill that would have tripled the interest rates on short-term “payday” loans"the Texas payday lending industry has adopted another business model to evade state and federal regulation. In July, Texas-based payday lenders regrouped as businesses operating under Texas’ Credit Service Organization Act. As a Credit Service Organization (CSO), a payday lending company dodges both federal guidelines restricting payday loans and the interest rate limits established by the Texas Finance Commission (TFC). Meanwhile, a recent TFC study demonstrates how Texas consumers are being gouged by these high-cost, short-term loans.

Foggy Business Climate Studies (06/30/2005)
Texas ranks relatively high on several “business climate” indices that compare state policies and outcomes related to economic growth and vitality. Texas’ low business taxes are often claimed to be a magnet for relocating businesses and a catalyst for interstate competitiveness and survival of existing firms. But in a new book, Grading Places: What do the Business Climate Rankings Really Tell Us? (http://www.epi.org/content.cfm/books_grading_places), author Peter Fisher finds that these indices are neither useful for companies in selecting sites nor for state policymakers in gauging economic competitiveness.

Study: Major Business Rankings Not Accurate Measure of TX's Business Climate (06/29/2005)
Texas prides itself on being a good for business state, but what’s its business climate really like?

Houston KIDS COUNT Conference on Children Powerpoint Presentations (06/15/2005)
The following presentations were given at the Houston KIDS COUNT Conference on Children, a half-day conference on children's issues in the wake of the 79th Legislative Session.

CSSB 1538: Senate Passes Bill To Help Low-Wage Workers Save for the Future, Bill Moves to House (05/11/2005)
On April 5 the Senate voted 30-1 to pass CSSB 1538 by Senator Barrientos. The House companion to this bill is HB 2450 by Representatives Naishtat, Luna, Guillen, and Jim Keffer. CSSB 1538 would establish a $1 million grants program at the Comptroller’s office to assist local communities in setting up Individual Development Accounts (IDA) for their low-income residents. The bill will be heard on Monday, May 16 at 2:00 p.m. or upon adjournment.

Oppose CSHB 846 (Flynn): Protect the Public from Predatory Payday Lenders (05/3/2005)
Texas has a longstanding tradition of fighting usury- in fact, specific interest rate caps were written into the original Texas Constitution. CSHB 846 substantially weakens these consumer protections and authorizes interest rates on loans as high as 780 percent!

Payday Lending Bill Offers No Protection to Cash-Strapped El Pasoans (04/28/2005)
The Texas House of Representatives is on the verge of rolling back consumer protection laws designed to prevent unscrupulous lenders from preying on cash-strapped Texans. Lawmakers are getting ready to vote on legislation by Representative Dan Flynn to legalize interest rates as high as 780 percent on so-called "payday" loans. Low-income El Pasoans rely on these high-interest loans when they have trouble paying their bills between paychecks.

Payday Loans Threaten Texans’ Financial Well Being (04/22/2005)
The Center for Public Policy Priorities today urged Chairwoman Beverly Woolley to oppose House Bill 846"a bill that would open up the practice of payday lending in Texas-in the name of promoting financial well being for all Texans. HB 846, by Rep. Dan Flynn, would make such loans more available, and more expensive, for desperate, cash-strapped Texans.

Individual Development Accounts Benefit Financial Institutions (04/8/2005)
An Individual Development Account (IDA) is an interest-bearing, tax-free savings account created to help low- and moderate-income families build assets and move into the middle class. Each dollar a participant saves in an IDA is matched by public or private sources (e.g., banks, foundations, etc.). IDA deposits are exclusively limited to earned income.

HB 846 is A Wolf in Sheep’s Clothing: Legislation Claims to “Regulate” Payday Lenders, But Actually Raises Interest Rates and Fails to Close Critical Loophole (04/1/2005)
A payday loan is a short-term, high-interest loan that some low-income Texans rely on when they have trouble paying their bills between paychecks. These storefront lenders charge exorbitant interest rates"sometimes as high as 800 percent"in addition to high “rollover” fees that extend the loan when borrowers can’t repay it on time. Payday loans take advantage of low-income families desperate for fast cash and can trap borrowers in a spiral of debt.

HB 2450/SB 1538: Legislature to Consider Bills That Would Help Low-Wage Workers Save for the Future (03/30/2005)
Representative Naishtat (HB 2450) and Senator Barrientos (SB 1538) have introduced legislation that would establish a $1 million grants program at the Comptroller’s office to assist local communities in setting up Individual Development Accounts (IDA) for their low-income residents. An IDA is an interest-bearing, tax-free savings account created to help low- and moderate-income families build assets and move into the middle class.

HB 846: A Bill to Regulate Deferred Presentment Transactions (03/7/2005)
I am here today because of the devastating impact so-called “payday” loans can have on low-income Texans and their families. While we support the intent behind CSHB 846"to regulate payday lenders"we cannot support the bill as filed.

Individual Development Accounts (02/22/2005)
An Individual Development Account (IDA) is an interest-bearing, tax-free savings account created to help low- and moderate-income families build assets and move into the middle class. Each dollar a participant saves in an IDA is matched by public or private sources (e.g., banks, foundations, etc.). IDA deposits are exclusively limited to earned income.

Texas Economy Got $4 Billion Boost from the Earned Income Tax Credit (02/21/2005)
Last year, more than two million Texas workers claimed over $4 billion in federal dollars for tax year 2003 through the federal Earned Income Tax Credit (EITC). The EITC not only boosts the earnings of low-wage workers and stimulates the Texas economy; it also provides an excellent opportunity for working families to save for the future. Although outreach and free income tax assistance have improved awareness of the program, the Texas economy and working families lost out on nearly $1.2 billion in unclaimed EITC payments last year.

Testimony on Regulating Refund Anticipation Loans (02/21/2005)
In support of HB 398: Relating to the regulation of tax refund anticipation loans.

Testimony on the Earned Income Tax Credit (EITC) (02/14/2005)
The Center for Public Policy Priorities offers the following comments in support of HB 630.

Testimony on Individual Development Accounts (IDAs) (02/10/2005)
Individual Development Accounts (IDAs) enable low and moderate-income families to build assets. IDAs are interest-bearing, tax-free savings accounts that can be matched by qualifying public or private sources. All deposits into IDAs are limited to earned income. IDA matching ratios can vary"ranging from 1:1 to 7:1.

The Earned Income Tax Credit, the Child Tax Credit, and the Child and Dependent Care Credit (01/26/2005)
Earned Income Tax Credit (EITC), the Child Tax Credit (CTC), and the Child and Dependent Care Credit are federally funded anti-poverty initiatives that help low-income individuals and families meet their basic needs. Households in poverty and those surviving on meager budgets can significantly benefit from these opportunities to increase their net income.

How Resources are Treated in Federal Public Benefit Programs in Texas (01/26/2005)
Cheat sheet on how resources are treated in federal public benefit programs in Texas.

How the EITC Refund Affects Eligibility for Public Benefits (01/20/2005)
Presentation at the City of Laredo "Maximizing Federal Benefits" seminar.

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