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."
Despite sweeping changes enacted by Gov. Bobby Jindal's administration, the health insurance program for state workers and public school employees will have to use $88 million from its reserve fund to cover its costs this year.
The LPSB races are sure to get heated between now and Nov. 4, and with only 9 available seats, this year's field of 20 candidates will surely be wanting to set themselves apart from the crowd early; they'll get their chance next week, starting Tuesday with the kick-off of a three-day series of candidate forums.
Lawmakers say they've received complaints that waits have spiked, with people being forced to wait in line for more than an hour — and sometimes three hours — to handle routine tasks.
The campaign announced that Rep. Stuart Bishop of District 43 and Nancy Landry, District 31, have thrown their support behind the Naval Academy graduate and entrepreneur in his bid to unseat current Hunter Beasley in District 8.
A Lafayette man with an alleged taste for child porn was busted Thursday evening during a cyber crime sting launched by the Attorney General’s Office.
U.S. Rep. Vance McAllister says his chief of staff is on temporary leave after being booked with drunken driving.
It was a rare moment in Congress this week as Republicans briefly put aside partisanship in support of President Barack Obama's request to train and arm Syrian rebels, and while a number of Democrats opposed the measure, Louisiana's Democratic Sen. Mary Landrieu found herself on the same side of the issue as her Republican challenger Rep. Bill Cassidy.
Home Depot breach bigger than Target; Alibaba IPO could be big; Rivers' last project and more national and international news for Friday, September 19, 2014.
Friday's Blogs from the Bog!
City-Parish President Joey Durel is asking the council to sign off on a resolution approving a pair of deals that would lead to razing the seedy Lesspay Motel at Four Corners to build a new police substation as well as transforming nearly a block Downtown where the old federal courthouse building now molders into a mixed-use development.
In 2013, the IRS — already the least popular governmental agency in the country — became the target of intense investigations after it was revealed that they had specifically and improperly scrutinized applications for tax-exempt status from organizations associated with the nascent Tea Party movement.
Improving the running game was "a point of emphasis" during the offseason and the results have manifested themselves in the form of substantially greater production.
Louisiana's health department said Wednesday that its evaluation of the state's Medicaid privatization was on target, despite criticism from the legislative auditor that it lacked key data and contained inconsistencies.
The feds converge on your office, seizing records on several employees as part of a pay-for-plea investigation. WWYD? If you’re Mike Harson, you give yourself a $12k raise.
It’s football season and after back-to-back winless weekends for the Saints and the Cajuns many citizens are finding it difficult to be civil much less happy. Well, chew on this.
Considering his repeated stays in the local penal system, David Narcisse Jr. should have known that having a semiautomatic shotgun, even one given to him by a friend, wasn’t the brightest of ideas.
A state district judge on Tuesday threw out a last-minute retirement hike lawmakers gave to the state police superintendent, ending a political firestorm over a pension boost passed without public scrutiny on the last day of the legislative session.
The House has passed a bill to increase oversight of veterans' hospitals under construction, following a report that some medical centers take three years longer to complete than estimated and cost an extra $366 million per project.
An obvious follow-up question for any Republican politician who accuses Democrats of being science deniers is one about science, to which Jindal bobbed and weaved like a welterweight champ.
The Lafayette City-Parish Council is expected to decide tonight (Tuesday) whether to go along with a proposal City-Parish President Joey Durel made in February’s State of the Parish Address and consolidate taxes for mosquito control and the parish health units into a broader tax program that would also cover animal control.
U.S. District Judge Richard Haik has dismissed Greg Davis’ lawsuit against the LPSB, yet in his ruling, the federal judge doesn’t bite his tongue in pointing out the "threat" being posed by certain board members.
Of all the political offices being contested throughout Lafayette Parish, the race for Broussard’s top police post has literally become one of the most heated.
A state district judge is deciding whether to issue an injunction against the enforcement of a last-minute retirement hike that lawmakers gave to the state police superintendent.
A new website is up for Louisiana's state government employees and retirees to choose their health insurance plans for next year, a choice they must make by October.
That fact that New Orleans led both games in the final 10 seconds of regulation, and lost each by a field goal or less, is of little solace.