<p>WASHINGTON-The Senate Finance Committee last week approved legislation to expand Individual Development Accounts (IDAs) by voice vote. The next stop for the Charity, Aid, Recovery, and Empowerment (CARE) Act (S. 1924), which substituted the language in the House bill (H.R. 7) will move to the next step in the legislative process: floor time in the full Senate. The IDA provisions were not originally in the Senate bill, but were inserted by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking Member Charles Grassley (R-Iowa). The two lawmakers were ready to introduce the amendment earlier but failed to reach a quorum in the committee. Credit union trade groups praised the unanimous vote. CUNA Vice President and Senior Legislative Counsel Gary Kohn pointed out that credit unions offer about 25% of IDAs nationwide and that the National Credit Union Foundation has provided half a million dollars in grants for IDA programs. Corporation for Enterprise Development Policy Director Ray Boshara, whose group headed a coalition in support of IDAs, had nice words for CUNA's effort. "It's clear to me and I'm sure to everyone on the Hill that this success would not have been possible without CUNA," he noted. "CUNA has been supporting IDAs right from the start, beginning with the first Lieberman-Santorum bill back in 1999. CUNA has been consistent and clear with lawmakers all along that IDAs have a home-and a future-in credit unions." NAFCU had also been working the issue, most recently writing a letter to the committee chairman explaining, "Currently, IDA sponsorship is limited only to `low-income' credit unions as designated by the National Credit Union Administration (NCUA). NAFCU is committed to ensuring that all Americans have the opportunity to save and applauds the IDA provision in S. 1924 that would allow all credit unions equal footing to provide Americans a chance to save for a secure future," NAFCU's letter read. "At a time where personal savings in the United States is at an all time low, I would like to urge your, and the Finance Committee's support, for including the IDA provisions found in S. 1924 as the Committee marks up H.R. 7 on Thursday." NCUA actually spoke up in support of the legislation also. "The CARE Act would allow all credit unions the same opportunity to play a significant role in encouraging Americans to improve their savings habits. With many credit unions adopting `underserved areas,' this financial tool could be put to good use," the agency wrote recently (See Credit Union Times, June 19). Money saved by low-income persons in IDAs can only be used for the purchase of a home, post-secondary educational, or to start up a small business. Funds may be matched up to $500 by the sponsoring financial institution or, more likely, another organization like a church. At present, there are 36 low-income credit unions offering IDAs. -</p> <p>[email protected]</p>

Continue Reading for Free

Register and gain access to:

  • Breaking credit union news and analysis, on-site and via our newsletters and custom alerts.
  • Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders.
  • Educational webcasts, white papers, and ebooks from industry thought leaders.
  • Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com.
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.