It is an exciting time for those of us who care about building financial security for low-income communities and narrowing the racial wealth divide. The election in November that handed the presidency to Joseph Biden, Jr., and maintained Democratic control in the House, along with the Democratic Senate wins in the Georgia run-off, created a unique window of opportunity to advance policies that could increase financial security for those with the least and reduce the widening wealth gap. See Prosperity Now’s statement here. 

During the first 100 days of President Biden’s term, Prosperity Now is calling on decision-makers to champion the following six policies to create new pathways to financial opportunities for underserved households, especially households of color: 

Create ‘Baby Bonds’ through the American Opportunity Accounts Act. To mitigate the racial wealth divide and ensure that every child can build wealth, Prosperity Now recommends national implementation of what many have called ‘baby bonds,’ or long-term public trust accounts that help ensure children have a nest egg for their futures. The concept of baby bonds was developed by economists Darrick Hamilton and William “Sandy” Darity, Jr., and the American Opportunity Accounts Act is being championed on Capitol Hill by Sen. Cory Booker (D-NJ) and Rep. Ayanna Pressley (D-MA-Seventh District). 

Expand the eligibility and refundability of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC). Unlike many other poorly designed tax exemptions and deductions that deliver the bulk of their benefits to the highest-income filers, the EITC and CTC target low- and moderate-income working families. To ensure that these credits can achieve their full potential towards helping low- and moderate-income working families, policymakers should ensure that childless adults, including non-custodial parents, as well as workers and qualified foster youth under 25 and workers over 65, can meaningfully benefit from the EITC. Policymakers should also expand the CTC by making it fully refundable to further help low- and moderate-income families and increase the support the credit provides to families raising children. Lastly, but importantly, policymakers should expand the reach of these credits to support immigrant and mixed-status families. 

Increase access to public assistance programs. Even though savings is critical, families who have saved beyond a certain threshold are often rendered ineligible for public assistance programs, such as the Temporary Assistance for Needy Families Program (TANF), Supplemental Nutrition Assistance Program (SNAP), and Low Income Home Energy Assistance Program (LIHEAP). The ASSET Act would eliminate these asset limits, or savings penalties, for TANF, SNAP and LIHEAP, allowing households to build savings without losing access to these programs.   

Make housing more affordable for cost-burdened families. Prosperity Now’s four-part proposal to address housing unaffordability would increase financial security and put what is often a family’s most valuable asset, a house that they own, within reach for more burdened households. This proposal is designed to help households alleviate financial burdens caused by housing costs at different stages, from renting to saving up for homeownership, to reducing the financial strains experienced soon after purchase, to lowering the ongoing costs associated with ownership. Adopted separately, each piece would move us in the right direction, but taken together, there is an opportunity for transformative change. Housing unaffordability was a major issue prior to COVID-19, but the added strains resulting from the pandemic make the need for swift action on this front all the more important.   

Strengthen the Consumer Financial Protection Bureau (CFPB). Congress should confirm Biden’s nominee for Director of the CFPB, Rohit Chopra. Once confirmed, Chopra should immediately ramp up efforts to root out unfair, deceptive, and abusive financial practices that slowed during the past four years. The Bureau should be particularly on the watch for COVID-19 related scams. Over time, we would also like to see the Bureau implement Section 1071 of the Dodd Frank Act to help collect data on small businesses, reinstate the 2017 rule that regulated the payday lending industry and restore the supervisory and enforcement powers of the Office of Fair Lending and Equal Opportunity (OFLEO) that was abandoned during former Director Kathy Kraninger’s time in office.  

Invest in mission-driven lending to support underserved entrepreneurs. Between 2007 and 2017, minority-owned small businesses grew 10 times faster than the overall small business growth rate during this period, yet before and during the COVID-19 pandemic, these businesses faced greater barriers to accessing the financial mainstream and were at the back of the line when it came to stimulus dollars. If this administration is serious about addressing racial inequities in this country, including significant financial disparities, we must invest in Community Development Financial Institutions (CDFIs) and Minority Depository Institutions (MDIs) that play a critical role in serving minority-owned businesses. 

The administration should leverage this moment by quickly pursuing policies that will move us closer to racial equality and greater financial security for households who need it the most. We have experienced significant divisions over the past several years, and now we need to move toward healing and growth.  

There is no time to waste. To keep on top of the latest developments for these and other relevant priorities, and to access tools to make it easy for you to advocate for meaningful change, please click HERE to join Prosperity Now’s campaigns today! Also, register here for our upcoming virtual series where we’ll dive deeper into these policy priorities and what they would mean for your community.