Financial Inclusion: Assuring People With Disabilities Access to Mainstream Financial Services Michael Morris, Executive Director, National Disability Institute Cincinnati, Ohio July 18, 2017

Agenda National Disability Institute: Catalyst for Collective Impact What We Know About Disability in America Financial Behavior and Banking Status State ABLE Programs and ABLE Accounts Access to Mainstream Financial Services

I. NDI Catalyst for Collective Impact History In 2000, no disability organization or government agency at any level wanted to talk about or address the challenges of poverty confronting millions of Americans with disabilities everyday. NDI was incorporated in 2005 as a 501(c)3 nonprofit. The Board of Directors are thought leaders in disability and financial communities. NDI has 35 staff located in 10 states and is headquartered in Washington, DC.

NDI Mission The mission of National Disability Institute (NDI) is to drive social impact to build a better economic future for people with disabilities and their families through pioneering research, advocacy, policy development, public education, and innovative demonstration projects.

NDI Vision We envision an environment where people with disabilities have the same opportunities to achieve financial stability and independence as people without disabilities. NDI is designing a new roadmap for economic opportunity, financial capability, and participation in the financial mainstream that will raise people up across the spectrum of disabilities to a new level of financial stability.

Strengths of NDI Team of subject matter experts with a majority of staff with direct personal experience with disabilities and deep knowledge of disability service delivery systems. Portfolio of over 20 projects in all 50 states that leverages a Real Economic Impact Network of over 4,400 community partners. Laser focus on poverty reduction, financial capability, and financial inclusion. Able to unravel the complexities of public benefits and human service systems to advance financial capability and independence.

Testing the Power of Collaboration and Innovative Interventions

II. What We Know About Disability in America Varies based on type of disability, severity, age of onset, socioeconomic and demographic characteristics. More likely to be older, out of the labor force, and have lower levels of education and incomes. Common element: All are at risk of being excluded from the financial mainstream.

Identifying Disability 6 Categories Hearing: Deaf or serious difficulty hearing Seeing: Blind or serious difficulty seeing Cognitive: Difficulty remembering, concentrating or making decisions because of a physical or mental or emotional issue Ambulatory: Difficulty walking or climbing stairs Self Care: Difficulty bathing or dressing Independent Living: Difficulty doing errands alone

Disability in America Americans with disabilities are the largest minority group in the nation, comprising 19 percent of the U.S. population or about 53 million people. One in five families have a family member with a disability. Twenty-two million working age adults have disabilities and more than six million children across the spectrum of disabilities receive special education. According to the Department of Veteran Affairs, one million wounded warriors have service connected disabilities.

Poverty and Disability Working-age adults with disabilities are twice as likely to live in poverty than those without disabilities. The poverty rate among people with disabilities (ages 18-56) is 28% compared to 13% among people without disabilities. Poverty rates are compounded when taking into consideration additional characteristics such as gender, communities of color, and level of education.

III. Financial Behavior and Banking Status

Groundbreaking NDI 2017 Report finds majority of adults with disabilities live outside economic mainstream Banking Status and Financial Behaviors of Adults with Disabilities

Report Highlights: Fewer than half of households with a disability are fully banked, compared to two-thirds of those without disability. Among those who are banked, more than 40 percent have a checking account, but do not have a savings account. Only 40 percent of households with a disability save for unexpected expenses, compared with 61 percent of other households.

Report Highlights: (cont.) Almost half of households with disabilities have no credit and are twice as likely to lack credit as households with no disability. Households with disabilities face a digital divide; only half of households with a disability have internet access at home or a smart phone, compared with three-quarters of households without disability. Forty percent of households with a disability use alternative financial services (AFS), compared with 25 percent of those without a disability.

Banking Status More likely to be unbanked or underbanked (46 percent versus 28 percent) This disparity has persisted over time. Household characteristics such as race, age, income and home ownership account for some of the differences. Type of disability has little impact on banking status.

IV. State ABLE Programs and ABLE Accounts The Achieving a Better Life Experience Act (ABLE) was signed into law by President Obama on December 19, 2014. Since June 2016, 23 states have established ABLE programs that follow federal guidelines.

ABLE Accounts Tax-advantaged savings and investment accounts No adverse impact on resource-tested federal benefits Distributions are for “qualified disability expenses” Pathway to financial inclusion

Typical ABLE Account Owners Parents with children with disabilities Working-age adults with disabilities

Short and/or long term financial goal examples: Assistive technology products and services Transportation Housing Education Employment supports and services Benefits and/or financial planning Uncovered healthcare costs

State ABLE Programs ABLE programs established in 23 states. Since June 2016 when Ohio STABLE program began, over 10,000 accounts have been opened nationwide. NDI researchers estimate that over 7 million individuals with disabilities are eligible to open accounts.

Ohio and Kentucky STABLE Programs BankSafe Option: conservative investment strategy and is designed to protect the principle investment. Invests 100% of its funds into an FDIC-insured account. The BankSafe Option offers the lowest expected return and the lowest expected risk with Fifth Third Bank, and insured, up to $250,000. OHIO – www.stableaccount.com KENTUCKY – www.stablekentucky.com

III. ABLE National Resource Center www.ablenrc.org 25 of most prominent national disability-related organizations Interactive website for one-stop objective independent information on ABLE accounts. On pace for one million visitors in 2017. Bimonthly webinars with leading subject matter experts Collaboration with federal and state agencies to provide comprehensive education and outreach activities Social Security Administration IRS Treasury FDIC Administration on Community Living US Department of Labor US Department of Education State ABLE Programs

V. Access to Mainstream Financial Services Small dollar, unsecured consumer loans Assistive technology loans Home and vehicle modification loans Residential mortgages Small business and microenterprise loans Financial education and credit counseling Individual Development Accounts (IDAs)

Access Challenges Physical and communications barriers Mobile banking and financial apps accessibility Financial literacy skill levels Sensitive customer service Trust and confidence.

Michael Morris, NDI Executive Director mmorris@ndi-inc.org Thank You! Michael Morris, NDI Executive Director mmorris@ndi-inc.org