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USFD and "Financial Inclusion"

Blog Image by Julie Siwicki of the Financial Access Initiative

“Financial Inclusion” has been a long-standing goal in development policy circles, borne at least in part out of the microfinance revolution. Belatedly, wealthier countries like the United States have caught on to the need to pay attention to whether households are included in the formal financial system. But a shared and precise definition of what it means to be included, or excluded, remains difficult to come by.

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SSIR: The Hidden Financial Lives of America's Poor and Middle Class

Blog Image by U.S. Financial Diaries

Recently, SSIRLive! featured The Hidden Financial Lives of America's Poor and Middle Class, a 2-part webinar and blog series, highlighting research based on the US Financial Diaries.  The research illustrates how current programs and policies for helping poor and middle class households achieve financial stability are based on an outdated understanding of the reality of their financial practices. 

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Video: Jonathan Morduch Highlights USFD Research at NYU Wagner

Blog Image by U.S. Financial Diaries

More than 200 alumni, students, faculty, staff, donors, and friends of NYU Wagner celebrated the school's 75th anniversary on Thursday, June 12. The celebration began with faculty presenting their research highlights, or "WAGTalks."  FAI's Jonathan Morduch kicked off the series with an overview of the US Financial Diaries (USFD) project and its relevance in today's current economic debates...

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Being Poor Above the Poverty Line

Blog Image by Julie Siwicki of the Financial Access Initiative

What does it mean to live between poverty and the middle class? In a multi-media report released last week, Al Jazeera America digs into the lives of 5 Californian families that "earn too much to receive most government benefits yet too little to reliably make ends meet."

The piece profiles families with income below the self-sufficiency standard, a measure developed by the University of Washington in the 1990s. The self-sufficiency standard . . . 

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Unhappy Tax Day for Some

Blog Image by Julie Siwicki of the Financial Access Initiative

Last week the New York Times highlighted a trend among low-income communities: people seeking tax prep at unregulated, sometimes fraudulent, pop-up shops. The article explains, "for millions of low-income Americans tax season means the biggest one-time influx of money all year." When preparers hand these customers a lump sum much larger than they're used to seeing on a daily basis, many filers don't think to check the numbers...

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Overdraft as a Product, not a Penalty?

Blog Image by Julie Siwicki of the Financial Access Initiative

The Taylors overdraft their checking account every two weeks, on purpose.

As described in a recent issue brief published by the U.S. Financial Diaries, the Taylor family’s income level varies significantly from month to month. Sometimes it’s not enough to cover all of their expenses. So, they opened an account at a bank with a simple overdraft fee structure: One $35 charge per overdraft, no daily fees, and an allowance of up to $500 at a time. Since the Taylors typically make only one large cash withdrawal per paycheck – the entire amount of pay – this bank would charge them at most one $35 overdraft fee each cycle, if they happen to need more cash than the amount of that week’s direct deposit...

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When You Need $128 to Have No Money

Blog Image by Julie Siwicki of the Financial Access Initiative

“Wow, the consumer knows about that?”

This was essentially how a banker responded when I told him the story of a woman I interviewed for the US Financial Diaries study. The participant – we’ll call her Jenna – was charged four $32 overdraft fees in the same day ($128 total, if you’re counting).  Jenna explained to me that if her bank had processed her transactions in the order she had made them, there would only have been one charge. Instead, the bank posted her largest purchase first, which was enough to take her account balance below $0...

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"Microcredit for Americans" - Is it all about the Score?

Blog Image by Jonathan Morduch of the Financial Access Initiative

Buried at the bottom of Shaila Dewan's recent New York Times article on "Microcredit for Americans" is an idea that deserves much more attention:

"Grameen helps its clients in another way that many experts say is more important than increasing income — it establishes good credit scores. Many poverty alleviation groups have shifted their focus from saving to credit building, because people with poor or no credit must leave large deposits for basic needs like utilities, have trouble renting decent housing, pay much higher interest rates and have a harder time finding jobs...
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Bad Data

Blog Image by Thea Garon of the Financial Access Initiative

At FAI, we’re big advocates for data. Why? Because you can’t make good policy without data. Data can be collected in many ways and come in many forms: transaction records, panel surveys, financial diaries, or field experiment results.  We get excited about the opportunity to collect or analyze data about the financial behavior of poor households...

 

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