David Newville: All Related Content

Asset Ownership plays a central role in the economic security of American families and the broader economy. Assets can be deployed productively, such as to pay for a college education, or tapped to help individuals and families weather unexpected events. Additionally, assets have behavioral effects that can change the manner in which people think about and plan for the future.

Today, the Asset Building Program released a new paper that examines the policy rationale for implementing a universal system of children’s savings accounts (CSAs) in the United States.

“A growing chorus, including President Obama, now believes that a prosperous future for our country will depend on the creation of a save-and-invest economy that will enable all Americans to accumulate savings and assets. While in the short-term, public investment should be expanded in order to stabilize the economy, any long-term plan for sustainable economic growth will have to involve increased household savings over an extended time horizon. One promising approach to that goal is children’s savings accounts (CSAs), which would be established at birth for every American.

This paper makes the case for establishing a universal system of children’s savings accounts (CSAs) in the United States. It provides a brief overview of the essential components of a CSA and how they would work, and the rationale and evidence for a CSAs plan.”

After several months of debate in Congress and the media, the proposal to create a Consumer Financial Protection Agency (CFPA) has recently taken some important steps toward becoming a reality. Earlier this week, Senate Banking Committee Chairman Chris Dodd included the CFPA in legislation to restructure the nation's financial regulatory system. This comes after the House Financial Services Committee approved a bill last month that would create the agency and which the full House is expected to vote on it in early December. The proposal has also received some support from important voices in the private sector and field of economics. Mark Zandi, chief economist at Moody's Economy.com wrote a piece this past Sunday in the Philadelphia Inquirer endorsing the creation of the agency.

President Obama originally called for the creation of a CFPA earlier this year as a major piece of a bold plan to revamp the regulation of the nation's financial system. The new agency would be charged with investigating consumer complaints, making rules, and enforcing regulations for a variety of financial products including mortgages, credit cards and bank accounts. The CFPA would also conduct research and promote financial education. New America's, Ellen Seidman, testified on the President's proposal before the House Financial Services Committee back in June. Click here to see her detailed analysis of the CFPA.

Last week, New America's children's savings account proposal, the ASPIRE Act (America Saving for Personal Investment, Retirement, and Education Act) received some major recognition from the mainstream media on the US News and World Report website. They ran an entire piece on the ASPIRE Act which focused on many of the details behind the proposal. The author of the article was also interviewed by ABC news. The reactions have been mixed, but the proposal is getting a lot of attention and hopefully some serious policy debate will result.

The ASPIRE Act would automatically provide every child in United States with a savings account when they receive their social security number. Every account would be endowed with a one-time $500 contribution and children from lower-income families would be eligible for a supplemental contribution of up to $500. Earnings in the accounts would be allowed to grow tax-free and lower-income Americans would be eligible for matching contributions. The accounts would also be used to help promote financial literacy.

After their children's college savings accounts lost 38 percent of their value last year, some Illinois parents might be seeing some justice soon. The Illinois Treasurer's office recently reached a tentative deal with Oppenheimer funds to recover $77 million of the $85 million in losses.

Last week Ford Foundation President, Luis Ubinas, spoke at the opening plenary of the Corporation for Enterprise Development's 2009 Conference on Children and Youth Savings in Brooklyn, New York. Urbinas discussed how the recent economic crisis and other events have created a unique opportunity to combat intergenerational poverty by increasing access to economic opportunity for the most disadvantaged among us. In particular, he emphasized the powerful role that children's development accounts can play in accomplishing this important goal.

Urbinas highlighted the great current disparity in asset holding between the rich and poor in America and how few assets many low- and moderate-income Americans have. He also noted that despite the fact that the federal government provides several hundred billion dollars in tax incentives each year to promote asset building very little of this goes to low- and moderate income families. Children's development accounts would be an important step towards remedying this disparity, by helping all Americans build assets starting at birth.

The Potential of 529 College Savings Plans

At a time when low-income students are underrepresented in higher education and the cost of attendance is becoming increasingly unaffordable, 529s have the potential to address issues of college readiness, access and completion.  College savings can help make higher education more affordable, and have the potential to change aspirations and behaviors of both students and their parents.  Research from the asset building field has shown that even a relatively small amount of savings can have positive impacts on behavior and

Key talking points on 529 plans, their current flaws, and how progressive features might remedy them.

Background on 529 college savings plans

In 2001, the Internal Revenue Code authorized college savings plans (529 plans) as a tax-advantaged savings tool. In a 529 plan,[1] individuals save money in an account that is dedicated for future college expenses of a beneficiary.

Early this week my New America colleague, Rourke O'Brien and I wrote an op-ed in the Washington Post on the benefits of shared equity homeownership. Shared equity is a unique approach to homeownership that helps bridge the large gap between renting and traditional homeownership for low- and moderate income families in high-cost housing areas.

The way it usually works is a local government or nonprofit provides funding to an eligible family to purchase a home. In exchange for the funding the public entity receives a portion of any price appreciation in the home when the family sells it. The public entity then uses its share of the price appreciation to help the next eligible family purchase a home.

<!--[if gte mso 9]> Normal 0 false false false MicrosoftInternetExplorer4 <![endif]-->Last week the Federal Reserve released some long awaited new credit card rules that will provide important new protections for consum