Asset Ownership in

Illinois
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Illinois Asset Building Group
A diverse coalition working to build
the strength and stability of families
and communities. IABG began in
2004 to promote asset building as an
innovative approach to eliminating
poverty and creating opportunities
for Illinois residents.
residents

IABG Goals: Build Assets, Increase Savings Opportunities,

Protect Existing Assets, and Promote Financial Literacy

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 What Are Assets?
Assets helpp individuals
and families live securely,
plan for the future, and
pass wealth on to the next
generation

Savings, Education, Homeownership, Small Business

• Assets strengthen communities by creating financial
stability
• When individuals and communities are stable, the entire
state benefits – job growth, tax revenue

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 What is Assets Poverty?
y
Households experiencing asset poverty do
not have enough cash reserves (savings
(savings,
stocks, retirement accounts, equity in a
home or business) to get by at the federal
poverty level for three months when their
primary source of income is eliminated
through job loss or other disruption.
How is
H i asset poverty different
diff from
f income
i poverty??
Measuring net worth by considering assets and liabilities, as
pp
opposed to income alone, pprovides a more long-term
g and
encompassing view of economic security and mobility. In Illinois
26.9% of households are asset poor vs. 10.9% that are defined
under income ppoverty.
y

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Illinois Asset Poverty Index
The Illinois Asset Poverty Index
(IAPI) provides data on asset
poverty for counties and county
groupings across Illinois.
Developed with help from our
partner organization in
C lif i the
California, th IAPI enables
bl
Illinois residents to ascertain
asset poverty rates for the
communities in which they live.

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IAPI County Clusters
Asset Poverty in Cook County
Category Demographics Income Poverty Asset Poverty

Total 1,160,152 9.6% 29.2%

Housing Tenure
H
Homeowners 58.0% 3.5% 3 6%
3.6%
Renters 42.0% 18.0% 64.4%
Race
White 63 6%
63.6% 5 3%
5.3% 19 4%
19.4%
Black 15.9% 20.5% 48.9%
Latino 14.8% 15.8% 49.5%
Asian 5.6% 9.3% 27.6%
Native 0.2% 15.4% 39.7%

To view IAPI data for all of Illinois go to:

http://www illinoisassetbuilding org/data/assetpoverty/
http://www.illinoisassetbuilding.org/data/assetpoverty/

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IAPI County
y Clusters
Asset Poverty in Cook County
Category Demographics Income Poverty Asset Poverty
Age
Under 35 30.0% 12.8% 44.8%
35-44 28 4%
28.4% 9 0%
9.0% 27 7%
27.7%
45-54 25.0% 7.2% 20.8%
Over 55 16.7% 8.4% 16.2%
Familyy Composition
p
Married, no children at home 15.1% 2.9% 15.7%
Married, children at home 34.6% 5.0% 18.2%
Single, no children at home 35.8% 12.0% 36.6%
Single, children at home 14.5% 21.5% 50.9%

To view IAPI data for all of Illinois go to:

http://www illinoisassetbuilding org/data/assetpoverty/
http://www.illinoisassetbuilding.org/data/assetpoverty/

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 IL Household Net Worth
15.4% of all Illinois households have zero or negative net worth,
meaning i they
h may owe more thanh theyh own.

Median Net Worth of Illinois

Households by Race in 2004
White – $128,444
$128 444 Minority – $12,100
$12 100

Illinois asset poverty has increased 6.4%

6 4%
since 2004

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 Education as an Asset
As an asset, education has a cumulative life-long impact in the
f
form off higher
hi h annuall incomes
i andd more money to put away
into savings or investments such as a home.
Illinois Educational Attainment,
Attainment 2006
Highest Educational Level Percent of Adults Illinois Median Annual
Attained age 25 and Over Earnings

Less than a high school diploma 15.0% $20,019

High school diploma 28.9% $27,048

g or associate’s degree
Some college g 27.3% $$33,383
,
Bachelor’s degree 18.1% $47,484

Graduate or professional degree 10.8% $60,695

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Ways to Help Build Assets

Earned Income Tax

Credit

Payday Loan Reform

Children’s
Child ’ SSavings
i
Accounts

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Earned Income Tax Credit
The Earned Income Tax Credit ((EITC)) is a refundable income tax
credit for low-income working individuals and families.

• Because it is refundable the EITC is given as a tax

refund payment when the credit exceeds the
amount of taxes owed
• EITC is
i available
il bl on both
b h federal
f d l andd Illinois
Illi i state
income taxes
• In 2007 the maximum federal EITC for a
individuals with two or more qualifying children
was $4,716

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EITC in Illinois

• Last year nearly 777

777,000
000 low-
low
income, working families benefited
from the Illinois EITC with an
average credit of about $100
• Most state EITCs are based on a
percentage of the federal EITC
• Set at only 5% of the federal EITC,
the Illinois EITC is among the
smallest of all state EITCs
• Legislation, SB12, has been
proposed to double the Illinois
EITC
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 Payday
y y Loan Reform
Payday loans are small loans with high interest rates that are most
often provided by companies with no ties to banks and are not
regulated by the FDIC.
• Payday lending fees costs Americans approximately $3.2 billion
annually
ll
• There are almost 3 times as many payday licenses in Illinois than
there are McDonald’s restaurants
How Payday lenders profit:
• Astronomical APR rates
• Loan
L roll
ll over
• Balloon payments
epay e t penalties
• Prepayment pe a t es
• Multiple loans to the same borrower
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 Payday
y y Loan Reform
In the past payday loans normally had terms of approximately
two weeks. After an Illinois law was initiated to regulate
payday
d loans
l most lenders
l d extendedd d terms past 120 days
d as a
loop hole to avoid this law. By doing so lenders can continue
to provide loans with no consumer protections.
How to Reform Payday Loans:
• In order to eliminate loop holes, and reform payday
lending once and for all, amendments must be made to
the Consumer Installment Loan Act
• Amendments should include limits on charges & fees,
cap interest rates
rates, restrict prepayment penalty and
amortize all loans
• Legislation is being discussed in this session and will
continue
ti until
til the
th problem
bl hash been
b solved
l d
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 What Are Children’s Savings
Accounts?
• Opened at birth for all children
• Seeded with an initial deposit
• Children & families can contribute
over the years
• Used for designated purchases –
educational
d ti l expenses,
homeownership, entrepreneurship–
when the child reaches least 18
years old

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 Why Build Assets for
Children?
Children s savings
Children’s
accounts promote life-
long financial literacy and
savings behaviors.
Holding assets raises
aspirations
i ti off children
hild andd
parents for a better future.

Saving for the future helps bring back the idea that education
(and money) create new opportunities

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 .. and When the Children
B
Become Adults
Ad lt

• Creates opportunities for career advancement,

advancement skills
development through increased education
• Provides family, individual stability through
homeownership, small business ownership
• Increases lending eligibilities, helps steer clear of
predatory lending,
lending such as payday loans
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IABG Principles for a CSA Plan:

• Inclusive so that all children can participate

• Seeded with an initial deposit so it creates a concrete asset at the
onset
• Progressive in structure, providing higher initial deposits and/or
matching funds for savings deposited by lower-income families
• Simple so that investment decisions are limited and easily
understood
• Linked to age-appropriate financial education to build savings and
investment skills
• Nondiscriminatory to families receiving public benefits
• Protected from usese until
ntil the child is at least 18
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 …But Will This Really
y Fly?
y

Assett policy
A li isi a new approachh to
t eliminating
li i ti
poverty and creating economic security for all.

Several factors make children’s savings

accounts marketable:
• Corporate,
Corporate business leaders supportive of
investment and savings
• Financial institutions see opportunities for
new customers
• Children are particularly compelling
beneficiaries for social programs

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 How will CSAs become a
reality in Illinois?

In 2007 legislation was passed that created

the Children’s Savings
g Account Task Force

• The goal of the Task Force is to form a strategic

i l
implementation
i planl to create a savings
i account at birth
bi h
for every child born in Illinois to Illinois residents.
• The Task Force
Force’ss plan will be the basis of advocacy led
by IABG & Task Force members in the future to create
an Illinois CSA program

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 What Can You Do to Help?

• Add yyour organization

g to the CSA list of supporters
pp at
www.illinoisassetbuilding.org/csa
• Talk with your community about asset building and CSAs
• Contact elected officials and let them know you support
CSAs

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 For more information:

Chris Giangreco
g
773.336.6073
pp @ g g
support@illinoisassetbuilding.org

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