Hurricane Katrina pushed Jackson, 37, and her young children out of their Westwego home and initially onto Interstate 10, where they were stranded with hundreds of others. She eventually made her way to Baton Rouge and, a few months later, moved into a nice family home in the suburbs off Siegen Lane thanks to a federal housing program.
It was only a temporary fix. As 2006 came to a close, federal officials arrived to reclaim their property but offered Jackson the opportunity to make the first bid. "We didn't have the money," she recalls. "I mean, we didn't have anything. I was terrified about my kids ending up on the street. We didn't have anywhere to go and housing has become so difficult to find around here."
The situation looked dire when her federal loan application was denied. The Road Home program could have helped, but it was moving at a snail's pace. That's when Jackson reached back deep for a Hail Mary ' a conventional loan from her bank. She didn't get it but discovered an innovative wealth-building program sponsored by the state that helped her close on her house in December.
Through the Department of Social Services and Southern University in Baton Rouge, the initiative matches participants with a bank to explore options for a savings account and to attend financial literacy courses. The program centers on the creation of an Individual Development Account, commonly referred to as an IDA.
IDA programs were originally developed in 1991 by Professor Michael Sherraden through his work at Washington University in St. Louis. Sherraden wanted to create a program that served low-income families on two levels: accumulating wealth and making strategic life choices. With the program's lofty ambitions, growth has been slow. Today, only 30 states sponsor IDAs and, over the past decade, federal and state governments have dedicated a meager $183 million to related initiatives.
The core element of Louisiana's IDA program is a special savings account that helps low-income families save money for a new home. Any money that participants place in their accounts is matched 4-to-1. Louisiana is above the national average in this regard and, due to savings constraints, a participant can walk away with as much as $5,000 in cash by completing the program. Jackson came up with her $1,000 in savings through a job at the local YWCA. Matching dollars are provided by the federal Temporary Assistance for Needy Families program.
Of course, $5,000 isn't enough to buy a house or even secure a home loan in most instances. That's why partnering banks offer financial literacy courses on building wealth, financing homes and living on a budget. Alexis Anderson, who over sees the program for LA DOTD Federal Credit Union, which serves Acadiana, says when Jackson coupled the training with her savings, it became worthwhile for the bank to take a leap. "It's not just about getting them married up to an asset," Anderson says. "It's about equity, and this is where the education can make a difference. We're not only opening a door for them, but helping them make valuable decisions."
The banking industry could become the face of IDAs in the future. According to a recent study by the Federal Treasury, banks are attracted to the program because it offers them opportunities to cross-sell a variety of other products. After all, successful IDA participants will eventually need additional savings and other credit products to secure their short-term and long-term financial goals. IDAs also bring new customers into banks, but, more important, they keep financial institutions in touch with nonprofit organizations and the community at-large.
It's an uphill battle. Last year, savings rate percentages dropped below zero as disposable income disappeared. To put it into perspective, saving percentages haven't been this low since the Great Depression. One in four Americans is asset poor; one in five has no assets; and upwards to 30 percent have never used a bank. It's no wonder financial institutions and state governments want to help people like Jackson.
The program is designed for working families with at least one dependent child and an annual income that is less than 200 percent of the national poverty level. In all, there's $2 million assigned to the program. About 200 people are enrolled and another 150 can come onboard, says Drew Murray, director of asset building programs at DSS. While anyone from Louisiana can enroll, a large number of participants are from areas devastated by Hurricane Rita in the Lake Charles region.
The fact that the storms have perpetuated the cycle of poverty for some Louisiana residents is among the many reasons IDA money has been confined to home ownership this year. If the state rallies for stronger levees and better flood protection but doesn't address the underlying causes of poverty, nothing will ever be accomplished. "It's such a crucial element in our recovery," Murray says, "but home ownership is also seen as a productive step toward helping working-poor families escape poverty."
Jackson says the IDA program was the only help she could find in Katrina's aftermath. She saved money and made an effort to build her assets, and now she's reaping the rewards. "I just wish there were more programs like this, something that thinks outside the box," Jackson says. "People are working hard to get back on their feet, but it doesn't always work. It takes years to get everything you have, but it's harder to get it back when you lose it. I was tired of pretending everything was OK for my kids ' but now it is."
Louisiana Gov. Bobby Jindal is joining South Carolina Gov. Nikki Haley on her campaign bus tour.
A New Iberia man has been sentenced to life in prison for killing a 4-year-old girl and scalding her 3-year-old brother.
A district judge decided Wednesday against sanctioning attorney/school board candidate Dawn Morris for her behind-the-scenes role in a lawsuit against Mark Cockerham.
Secretary of State Tom Schedler says Gov. Bobby Jindal's administration may have improperly destroyed records in the state employee health insurance program, in the middle of a heavily-criticized rewrite of benefit plans.
San Fran wins the World Series; Sistine Chapel improvements; Kurds moving toward Syria and more national and international news for Thursday, October 30, 2014.
Thursday's Blogs from the Bog!
Paper cites the former ADA's "experience as a prosecutor, his demonstrated integrity, and his ideas for reshaping the [DA's] office" in urging voters to support Keith Stutes Nov. 4.
Louisiana officials have sent a letter to the American Society of Tropical Medicine and Hygiene un-inviting members of the group who have recently been to ebola-affected West African countries from attending the group’s annual conference in New Orleans next week.
Drew Brees and the New Orleans Saints have to find a way to win on the road if they plan to take over first place in the NFC South.
"It is obvious that Louisiana economic performance has not outperformed the South or the United States as a whole and, in fact, has substantially underperformed..."
A state district judge said he will rule Friday on a preliminary injunction to keep some charter schools from receiving $60 million through Louisiana's public school financing formula.
Saints fans were to gather, make merry, eat/drink compliments of a new Downtown group and watch the Saints beat Carolina and claim 1st place in the NFC South. But...
New Orleans Saints running back Mark Ingram doesn't see his dramatic spike in production as any sort of validation.
U.S. Sen. Mary Landrieu is facing off one last time with her two main Republican challengers before next week's election.
He’s pulling for Knezek and Hidalgo on his end of the parish but issued endorsements in three other districts as well.
Off a narrow gravel road running between a handful of mostly abandoned lots near a Mississippi River levee, down past sprawling oak trees and thick weeds, a lectern framed by banana trees has been set up in front of three short rows of folding chairs.
Hillary Rodham Clinton is heading to New Orleans this weekend to stir up voter support for Democratic U.S. Sen. Mary Landrieu.
Saints coach Sean Payton has spent much of his team's erratic season trying to build his players up.
The Daily Advertiser has weighed in on this year's LPSB elections with nine endorsements.
The Daily Advertiser uncovers at least two disciplinary actions against veteran sheriff’s deputy Kip Judice for driving a department vehicle after drinking alcohol.
The LPSB has named Melinda Mangham as the interim replacement for the District 7 seat recently vacated by Mark Cockerham.
Gifford Briggs, vice president of the Louisiana Oil and Gas Association, insisted that a settlement is not on the table and a consent decree in exchange for a new processing fee is highly unlikely.
Secretary of State Tom Schedler says he expects about half of Louisiana's 2.9 million registered voters to cast ballots for the Nov. 4 election.
While the Division of Administration, Treasurer John Kennedy and the legislative auditor spar over the validity of a $178.5 million surplus, and how it was calculated, some officials expect it to be up for grabs sooner or later.