Nearly One Million Working-Poor Families May Get a New Chance to Save: Savings for Working Families Act Has Bipartisan Support

The Savings for Working Families Act (H.R. 4751) provides an opportunity for 900,000 working-poor families to build wealth and enter the middle class. The bill provides incentives to the private sector through tax credits to offer Individual Development Accounts (IDAs) to help low-income families build appreciating assets, such as a first home, a postsecondary education, or a small business.

The bill provides tax credits to financial institutions that offer IDAs. Financial institutions that give a dollar-for-dollar match on an individual’s savings deposits and impart financial education for its customers receive tax credits. Once the individual accumulates enough money and receives financial education, the financial institution pays an asset provider, such as a college or mortgage lender, on behalf of the individual.

IDA programs are typically funded through small federal, state, or private efforts. Today 50,000 people have had a chance to build wealth and move into the middle class through IDA programs. The Savings for Working Families Act, which has bipartisan support, would make the opportunity available to almost a million people.

“This bill would drastically increase the number of individuals who can build savings through an IDA program,” said Dory Rand, supervising attorney of the Shriver Center’s Community Investment Unit. “It greatly increases access to mainstream financial services for low- and moderate-income people by incentivizing financial institutions to offer their products and services.”

Please urge your representatives to support the bill if they are not yet on the growing list of cosponsors. Contact your representatives by calling the capitol switchboard at 202.224.3121 or send an e-mail here.

The Shriver Center, along with community groups, banks, regulators, and researchers across the country, advocates expanding asset-building opportunities and access to mainstream financial services. For more information, contact Dory Rand or Jami Schlafer.