NCUF Rolls Out National Savings Program

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The National Credit Union Foundation has joined with the Consumer Federation of America (CFA) to launch of a new campaign called "America Saves Through Credit Unions." CUNA is also involved.

The program being rolled out in conjunction with the release of new research by the CFA that shows the wealth gap between the poor and other Americans has been growing over the past decade.

CUNA said it had entered into the new savings program, along with the Consumer Federation of America and the National Credit Union Foundation, to help lower-income individuals and families save and build wealth.

"The National Credit Union Foundation is committed to a mission of improving the financial well-being of America's consumers," said Gary Officer, NCUF Executive Director.

The groups said that the America Saves through Credit Unions effort builds on the success of America Saves, a broader effort now in its third year that encourages and assists lower-income Americans to save and build wealth. Funded by the Ford Foundation and many others including the NCUF, it combines a unique brand, powerful saving messages, opportunities for free enrollment as an American Saver, and supporting services.

Sixteen broad-based local Saves campaigns have been launched, and another more than 30 are being planned. Nationally, Black America Saves, Hispanic America Saves, Faith Saves, and American Saves Through Homeownership have been initiated, and initiatives involving the Department of Defense and workplace saving are being planned. More than 500 organizations are participating in these programs, including about 100 financial institutions that have lowered or eliminated minimum balance requirements on saving accounts.

According to CUNA, more than 16,000 Americans have enrolled as Savers, which requires them to develop a wealth-building goal and specific plan including monthly dollar deposits. The typical Saver is a moderate-income young adult who is saving $40 a month to create an emergency saving fund.

Among the findings of the new research conducted by Professor Catherine Montalto of The Ohio State University using 2001 Federal Reserve Board Survey of Consumer Finances data and looking at the poorest one-fifth of Americans by income vs. the rest of Americans.

* The median income of the poor is $9,868 compared to $40,088 for all Americans.

Lower-income households are much more likely to be old, and somewhat more likely to be young, than the rest of America. Thirty-six percent of the poor, but only 21% of all Americans, are at least 65 years of age. Also, 27% of the poor, yet only 23% of other Americans, are under the age of 35.

* Lower-income households are about twice as likely as all American households to be unmarried, African-American or Hispanic, and not well-educated (i.e., not have finished high school).

* There is a significant, and growing, wealth gap between lower-income households and the rest of America. In 2001, the net wealth of the typical poor household was only $6,720 compared to $86,100 for the typical American household. That is a wealth gap of thirteen to one, compared to an income gap that year of only four to one.

* Between 1992 and 2001, in constant dollars (2001), the net wealth of low-income households increased by only 7%- from $6,261 to $6,720. By comparison the net wealth of all American households increased by 42 percent - from $60,695 to $86,100. That increased the wealth gap between the two groups from under ten to one to thirteen to one.

* There was, however, one low-income group that held some wealth. The typical household headed by an older American (65 years or older) held net wealth of $46,700 in 2001. That is principally because the typical older American who was income-poor owned a home. To a lesser extent, that is also because they were more likely to have retirement assets. As a result, it is not surprising that, from 1992 to 2001, the net wealth of the older poor increased by 24 percent - from $37,654 to $46,700.

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