In Chicago 20% of families live in poverty, but far more (49%) are financially vulnerable. These “liquid asset poor”families do not have enough savings to live above the poverty level for just three months if they lose a job, face a medical crisis or suffer another income disruption. Communities of color fair even worse: 67% of African American households and 71% of Hispanic households in Chicago are liquid asset poor.

These households live in a state of persistent financial insecurity – one emergency away from falling into debt or even losing a home. The inability to bounce back from financial pitfalls not only hurts Chicago families, it stifles the city’s long-term economic growth.

The findings are part of a new data analysis from Family Assets Count, a project of CFED (the Corporation for Enterprise Development) and the Assets & Opportunity Initiative in partnership with Citi Community Development and the Illinois Asset Building Group. The analysis spotlights a range of challenges confronting Chicago’s vulnerable families:

• Although the city has a 45% homeownership rate, one in three families are “asset poor,” meaning they lack sufficient net worth (what they own minus what they owe) to subsist at the poverty level for three months in the absence of income.
• 16% of Chicago families do not have a savings or checking account – twice the national rate.
• One in four families has a bank account but still relied on alternative financial services such as check cashing or payday loans in the past year, which means they are paying far too much for accessing their hard-earned money.

Families across the state are struggling to stay above water. A total of 1.8 million Illinois households (38%) are liquid asset poor. IABG and its partners are working to promote policy solutions at the state and local level including:

• Passing land use ordinances to limit the prevalence of predatory lenders like payday, auto title and rent-to-own stores that entrap families in a cycle of debt.
• Investing in citywide initiatives that help families build and maintain good credit scores through credit builder loans and credit counseling.
• Creating an Illinois Children Savings Account Program that provides a savings account for every child.
• Expanding access to the Illinois Bright Start program, making it easier for families to save for children’s’ college education.
• Ensuring all Illinois workers have the opportunity to save for retirement through the Illinois Secure Choice Savings Program.

Through cutting edge data, tools and resources Family Assets Count leverages the power of cities to improve financial stability for families and advances programs and policies that reduce barriers and encourage families to save and build assets. For more information and data visit FamilyAssetsCount.org

Millions of individuals with disabilities rely on public benefits for health care, food, housing, and income. Currently an asset test on benefits programs, such as Social Security Income (SSI) and Social Security Disability Insurance (SSDI), prohibits recipients from building savings over $2000. Essentially, to remain eligible for much needed benefits programs, an individual must remain poor and financially insecure.

In the past year, we have been advocating at the federal and state level for the Achieving a Better Life Experience (ABLE) Act. The ABLE Act allows people with disabilities and their families to build much-needed savings, helping them become financially secure.

Last December, Congress passed the ABLE Act, but each state is responsible for creating and operating an ABLE program. This spring, the General Assembly passed SB 1383, bringing the ABLE Account Program to Illinois!

Awaiting Governor Rauner’s signature, the ABLE Program will allow people with disabilities and their families to open tax-free savings accounts in Illinois. Critically, the money in these accounts will not be counted against them when applying for federal benefits programs. For the first time, individuals with disabilities in Illinois have the opportunity to build the savings necessary for real financial security.

The ABLE Account Program will be administered by the Illinois State Treasurer, who worked with Sen. Bennett and Rep. Kelly Burke on the passage of SB 1383. In Treasurer Frerichs’ recent newsletter, he stated this about the passage of SB 1383:

“I chose a life of public service to help Illinois families. I am proud of the members of the Senate and House for passing this legislation to help ease financial strain on these families,”Treasurer Frerichs said. “With the ABLE Account program, we can help individuals with disabilities get the tools necessary to attain financial stability and independence.”

What are the Next Steps?

Passed out of the General Assembly with unanimous support, SB 1383 is awaiting Governor Rauner’s signature. After becoming law, the Illinois State Treasurer’s Office will begin setting up the program. As there is no specific timeline for the ABLE Program to be set up, IABG partners will support the Treasurer’s Office in implementing the program in an effective and timely manner.

Additionally, the Department of Treasury just released proposed regulations that will guide states’ implementation of the program.

Read about the most recent updates in the implementation of the ABLE Account Program.