America may be on the verge of having the resources to build better – but only if the government can get the money out the door and into the right hands. Partnership will be important.
After months of debate, President Biden signed major infrastructure legislation into law, and the U.S. House of Representatives has passed a bill that would allocate trillions of dollars to strengthen the social safety net and invest in initiatives that will raise millions of dollars. Can improve financial health outcomes for Americans. ,
These investments cannot come quickly. data from our latest Financial Health Pulse Trends Report shows that government-provided pandemic aid had a major impact on the financial well-being of Americans, reducing the poverty rate and increasing the percentage of those considered financially healthy, particularly in black and Latinx communities and among the poor.
Nevertheless, pulse data shows that significant equity gaps remain. Black and Latinx people are between 18 and 15 percentage points less likely to be financially healthy than white people. People with disabilities are almost half as likely to be considered financially sound as people with disabilities. LGBTQ+ individuals are 1.5 times more likely to be considered financially vulnerable than non-LGTBQ+ people. The gender gap in financial health expanded during the pandemic, with women now down 17 percent of men.
With the stimulus aid program ending, federal moratoriums and some state moratoriums on evictions gone, and COVID-19 keeping us from a full return to normal, the US Senate has to pass a Build Back Better bill to avoid a There is a need to move forward as soon as possible. To backslide and do well on President Biden’s call for equity and inclusion.
The administration will need to move into implementation mode immediately, as soon as possible. Vulnerable communities facing challenges in timely delivery of critical funding and programs need look no further than the pandemic.
It almost took the IRS Four months to distribute 90 percent of economic impact paymentsBoth non-tax filers and those who don’t have a bank account are facing the most delays because the IRS didn’t have accurate data to send their payments. Challenges in applying for Paycheck Protection Program funds forced many small business owners to either close their businesses or bridge the financial gap by dipping into retirement savings or other tax-deferred accounts. Landlords who are facing slow distribution of federal rental assistance are Evicting tenants at higher rates Following the rollback of the federal eviction moratorium.
While fintechs are quick to seize technology as a limiting factor, there is actually a more fundamental challenge at play: Government is not always the best front door for reaching target audiences, especially the most vulnerable. Sometimes, it’s because people aren’t in the database, such as in the case of non-tax filers being paid by the IRS. More often, this is due to outdated marketing techniques and poorly designed user experiences.
Consider the fact that, until recently, the only way for federal food aid recipients to check the balance on their payment cards was to call the 800-number. propel, a graduate of my organization’s Financial Solutions Lab Accelerator, felt there was an opportunity for him to build an app. more than today 5 million Snap recipients in the US are monthly active users of Propel’s provider app,
Unlike the federal and state governments, whose primary job is to distribute SNAP funds each month, Propel succeeds by building an ongoing relationship with SNAP recipients – providing them with budgeting tools, a payment card that lets them have all their government benefits in one place. Allows to obtain, and access to, jobs and other resources designed to meet their particular needs.
When Congress expanded the Child Tax Credit earlier this year and made it refundable and available ahead of tax season, millions of families who didn’t file taxes became eligible for up to $3,600 per child. The catch: They needed to be made aware, and they needed to sign up with the IRS.
Propel, whose customers are completely bullseye for credit, stepped in, providing users with new benefits and information on how to enroll. Given its reach and clarity of communication, Propel was one of the biggest drivers of new sign-ups.
Another successful example of getting the word out is the work of cities for the Financial Empowerment Fund to link both pandemic aid recipients and new federal tax credit recipients to a bank account they use to receive their funds electronically. can do. The organization works with banks and credit unions in all 50 states to encourage the provision of secure, low-cost accounts that meet their national standards.
Through partnerships with the IRS, the American Bankers Association, and the FDIC, the organization was able to add a Link to IRS Portal Directing people in need of a bank account to resources, including a list of certified accounts. According to the IRS, five million people have taken advantage of the banking portal, and the CFE Fund’s website has attracted more than 200,000 visitors over the past eight months.
As the Senate prepares to take down the $2 trillion security net legislation, the Biden administration must start building partnerships right now that will be key to harnessing resources.