Practice & Policy Lecture: January 2012PRACTICE & POLICY LECTURE: JANUARY 2012	

Stephen Shepelwich: Thank you Leon for those words 
and thank you Connie and Wanda for arranging this for us. 
I'm real excited about being able to present here today 
about asset building, a topic that's close to my heart personally 
and then professionally as well. 
Just to kind of lay out the program, I'm going to talk a little bit 
about why assets are important, why they're important for poverty alleviation, 
and then also talk a little bit about some of the outcomes that Oklahoma 
has experienced in asset development work. 
David Blatt will then follow up with the discussion about some policy options 
that he sees as important for Oklahoma to consider as we continue to move forward. 
I just want to state real quickly, before we get started, 
that my presentation is my own views, 
not those of the Federal Reserve or the Board of Governors, just a quick disclaimer on that. 
So, what do we mean by assets? 
That's one of the first questions I think we ought to ask ourselves. 
What do we mean when we say this word "assets" and "asset development?" 
Well when it comes down to it, an asset that is just something that we own. 
It's something that we own and that we can control. 
A house can be our asset, cars, stocks, bonds, financial assets. 
That's what we usually think about. And then we kind of go from there. 
We can expand that and think about non-financial assets, 
intangible assets: our education, our skills and knowledge 
that we put forth in work.
Our social capital: relationships with friends, 
connections to community, to our faith community. Those also are our assets. 
So these are very important concepts to think about 
and that's something that we're going to look into, 
about how do we use those in this idea of poverty alleviation? 
So, real quickly, before we get started, I want you to think back, 
what was the very first asset that you ever purchased, 
the first asset that you owned as your own? What did it take to get that asset? 
What did you have to do to be able to purchase it? 
If we had time to go around the room we could ask that and kind of pull it out 
and I think we'd find a number of common things. 
We've heard in the past people say, "Oh, I got a bicycle" 
or "My first car."  "I was able to start a small job." 
One of the things that this is an example it comes to in my life, 
I remember in 1976 I was in Boy Scouts in Fort Worth, Texas. 
And they were going to have the National Jamboree. And, I wanted to go so bad, 
you know, I was all excited about that. 
All the boy scouts in my troop wanted to go and I went home, 
I was riding home in the car with my mom, and I told her about this, 
and she said, "Well Steve, if you can save the money to get there, 
we'll get you back home. Alright?"
(laughter) 
Stephen Shepelwich (continues): I thought that was a pretty good deal. 
So started working and used the family lawn mower, started mowing yards around the house. 
I remember my dad took me, that's when I opened up my first bank account. 
I still remember the bank even though it's changed about four different names over the years. 
And so I saved that money and I got to go to the National Jamboree that year, 
the first time I'd traveled on my own with these other boy scouts. 
It wasn't a tangible asset, but it was an educational experience, 
and it changed many of my thoughts and ideas of what the world is about. 
So what did it take to get that? 
If we kind of unpack that a little bit- I was in a community with boy scouts, 
I had some connections, I was able to set a goal, 
and it was a goal that was kind of a stretch for me. 
But I had a family that was able to say, "We can help you realize that." 
They kicked in some money. They had assets to help me. 
I started a small business doing lawns. Family and friends connections. 
I also had a lawnmower that I could use, another asset. 
I had a bank down the road and a dad that would take me down there 
to open a bank account, a place to save that money. 
Each of those are incentives, institutions, that we all need to help us build our assets, 
start to create that wealth. 
And, we can kind of think back, "Well, do the folks that we work with, 
do they have that same access? Do they have those kinds of opportunities? 
Do they have those supports that are needed for them to build their assets?" 
Just as one small thing, if we look in Oklahoma, 10% of Oklahoma families have 
no banking relationship, have no bank account at all. 
Another 20% will have a bank account but use it very rarely and rely more on other services 
like Western Union money, money orders, things outside the banking system. 
So even that issue of a bank account to save money is hard for many people to access and to start. 
So that's what we're talking about today, is how do we expand those institutions, 
those incentives, to encourage asset development among the folks that you all work with? 
Here in Oklahoma, we're lucky... we're not lucky, we're blessed in many ways by the hard work 
many organizations represented here and across the state have done around asset building. 
We have shining examples of programs that help all kinds of folks in all kinds of situations 
around our state develop their wealth. 
Over the past several years, these programs have started to come together in a new coalition -  
Oklahoma Assets -  to find new ways and programs to support those ways that families 
across the state can access these opportunities 
and can help the state develop this inclusive economy. 
I'd really encourage you to sign up for Oklahoma assets. 
There's a sign up sheet on your table, if you have not done so, 
to get some information about it, as well as visit their website at oklahomaassets.org. 
It truly is a place that every organization can find something of interest 
and of use for their constituents. 
So, three key concepts of asset building real quickly. We'll start off with the first. 
Building assets leads to wealth and economic security. Income alone is not enough. 
You need to take that income and translate it into assets. And we'll talk about that. 
"People cannot spend their way out of poverty" is a quotation by one 
of the founders of the field, Michael Sharadin, basically saying that 
we have to move beyond a focus on income maintenance programs 
that many of us in this room are involved in. 
Beyond the focus on income and translating that into assets and wealth, 
creating that stability for a family. 
Next, asset ownership brings a number of benefits and we'll go through 
what those benefits look like and why they're important for us. 
And then finally, this idea of asset development is not new. 
Well, much of our focus in the communities we work in, 
with the low and moderate income communities, the constituents you deal with, 
the focus has been very much around income maintenance. 
The change is happening, as Leon talked about the Federal support for asset development. 
But even beyond that, we talked about Federal programs over the history of the country 
that have really supported asset development and see where that's taken us. 
So quickly, just a real status of assets. 
What do assets look like in our communities and in our nation? 
Well, as you can imagine, over the last several years it's taken a hit. 
More than 3/5 of families across all the income groups in the country 
have lost assets between 2007 and 2009. 
As you would expect during the past recession and the slow recovery nearly all families 
across all income groups have lost about 1/5 of their wealth. 
So assets have taken a hit and again that's at all income levels. 
And this comes from a Federal Reserve survey, a survey of consumer finances. 
There's very few real data points around assets as there is around income, 
but what we're able to tease out is that there has been a dramatic hit 
to the wealth of the country and to the families. 
And that translates into this idea of security and stability. 
When we look at families and ask them, you know, "How financially secure do you feel?" 
we can say that nearly half of Americans consider themselves to be in a precarious situation, 
financially fragile. 
About 22% who said they would probably be unable to come up with $2,000 in 30 days. 
Nearly 30% said they would not be able to come up with $2,000 in 30 days 
to cope with financial emergency. 
Almost half of all Americans report having trouble just making ends meet, 
living kind of paycheck to paycheck. 
And we say this hits across all income ranges and it does, it affects all Americans. 
But this idea of assets has a disproportioned impact on minorities. 
As we can see, the typical net worth in 2009 is dramatically different between whites. 
It was over $113,000 for net assets. 
And if we look at African-Americans and Hispanics, about 1/3 of Black and Hispanic households 
had zero or negative net worth in 2009, compared with 15% of white households. 
So if we think about that, that is a lot of folks that have zero or negative, 
absolutely no assets to their name. So what does this do? 
It gives us a different way of looking at the situation your clients, 
your constituents, are facing. 
Income is one way, and we talked about income-poverty guidelines. 
But we can flip that around and add to that perspective by looking at asset poverty. 
And asset poverty, a fairly new definition has come up that says, 
if a person has no income - so for example if my family was to lose all their income, 
if I lost my job today, would I be able to last for three months on my assets? 
So, that means if I would stay above the poverty line for three months. 
That would mean, if I was to get... a family that would have to liquidate all of their assets. 
Basically, sell their house, sell their car, cash in, take out all their money 
in their savings accounts, to stay above poverty line for three months, would not be asset poor. 
So, we can see then, for example, a family of four would have to have greater than $5,513 
in assets to stay above asset poverty. Okay? 
So what does that look like in terms of the numbers? 
We can see in income poverty rate, the U.S. is 15%, 
Oklahoma is about 17% of income poor. 
But then when we look at the asset poverty rate for the 2010 report, 
it was 22% in the U.S. and close to 23% across the nation. 
So, saying nearly a quarter of the families across the country would be asset poor. 
And what we see is that is substantially higher than income poverty. 
When we look across all 50 states, we found that in all states 
asset poverty is higher than income poverty. So, it allows us to see a little different mix. 
And, again, this is basically saying that for nearly a quarter of the percentage of Oklahomans 
if they lost their job today, they would not be able to live on their assets and stay 
above the poverty line for three months. 
Now we all know it's hard to sell a house, at any time, particularly now, 
and you don't want to sell your car. If you sell your car, you can't get to work. 
It makes it even more difficult to get another job. 
So there is another way of refining this asset poverty rate. 
If we can look at the liquid asset poverty rate, 
that's just looking at financial assets. Okay?
You keep your house, you keep your car, but can you live on just your financial assets 
for three months and stay above the poverty line? It dramatically jumps up.
Nearly half of Oklahoma families would not be able to. 
48% of Oklahoma families are asset-poor. 
48% of families would have about less than $5,000 in liquid assets. 
So it gives us a little bit different perspective on the stability that's out there 
and really a different perspective on how fragile the families we worked with really are. 
So why do we need to focus on this asset building? 
Well, one, to build up the stability of families. 
To provide more assets so that they can weather shocks. 
Increased wealth leads to increased income in many ways. 
You can... if you have, wealth then you're able to get rents from it, 
you're able to get interest from it, investments and that comes back into increased income. 
If you have wealth you're able to take advantage of opportunities 
like education and more accessibly. 
There's been some research that has shown that assets, that the parental assets, 
is the number one indicator of the social mobility of the children. 
The children will move up if the parents have income, have assets. 
And some other research has shown that a child that just has a bank account 
in their own name, and the amount in that bank account hasn't been seen to be significant, 
but just the fact that they have their bank account in their own name 
makes them more likely to complete college. Six times more likely to complete college, okay? 
So it's that idea that if you have some assets, it helps you weather the shocks. 
But it also does more than that. 
It helps you to see that there's some possibilities out there, okay? 
So what does that mean for our families in Oklahoma? 
10% of the families don't have a banking relationship. 
What does that do for our educational attainment? 
What could it do if we were to increase that, and work on that? 
Psychological effects are many and have been well documented over the years. 
One of them is moving people from a place where they're thinking about living 
paycheck to paycheck, and we saw about 50% of the households are in that mode, 
being able to move from living every two weeks to put your planning horizon out 
a little bit farther. 
Being able to think, "Yes. You know, let's think about six months down the road. 
Let's think about four years from now when my son may graduate from high school. 
Maybe we can get into a career tech. 
You know let's start thinking about what could life be like for my grandkids." 
So assets is one of the things that will help strengthen that mindset and move people forward. 
And again those psychological effects have an impact on the community, in society. 
And I think this is extremely important: someone that is more stable financially 
is able to branch out, and have time to be engaged in the school, 
be engaged in their community, be able to take some risks 
to make the world better for themselves and their families. 
So assets has an effect on the family, on the individual, economically, 
psychologically, and then particularly socially as well. 
So as I mentioned, these pol... asset building isn't something new for the U.S. 
government polices that focused on this for years. 
There's been incentives to help us do things that are for the greater good or for government aims. 
We could look at number of these real quickly. One is Homestead Act. 
One out of six U.S. families can trace their families back to beneficiaries of the Homestead Act. 
Basically where a family when out receive land for putting 
work into it and meeting some other requirements. That was a transfer of wealth. 
That was a way of building some assets. Not everybody was able to participate in the Homestead Act. 
Not everybody was able to take advantage of that land. 
And then there were some folks that were disadvantaged by it, 
folks who were on those lands before, Native Americans. 
So we see through each of these good goals, actions for asset building. 
It affects positively some folks, and then there's some folks that are either negatively affected 
or it hasn't been within their reach to participate. 
The G.I Bill is another great one. 
The G.I. Bill, basically after World War II, service men that served in the war 
are able to come out and get education opportunities paid for and provided. 
There was a GAO study by the government that showed that the G.I. Bill 
had a tremendous positive impact on the U.S. economy as a whole. 
However, there was some groups that benefitted more than others. 
Service men in World War II were primarily white males. 
African American males, for example, served in lesser numbers and could not serve as officers. 
So their benefits were less. 
And even those that had benefits did not have the educational opportunities 
to take advantage of when they came back home. 
So the GAO study actually showed that, while it had a positive effect for the economy 
as a whole, the U.S. as a whole, African Americans themselves were put at a disadvantage by it. 
Their actual disparity was increased by this program. 
In the same way, or in a slightly different way, 
when we look at home mortgage interest deduction, and retirement plans, 401K plans, 
403 plans, 529 plans - all pretty much built into the tax code. 
Now then, these incent savings help us build our assets, 
but to participate we need to have a tax liability. 
And so, there are folks that are lower income, that don't take advantage of it. 
It doesn't benefit them per se. 
So again, how can we use these types of programs, think about them 
and increase the relevance to low moderate income communities? 
So, if we benchmark this, when we start looking at these different policies, 
the idea then is to say, okay, how do we take ideas like those policies 
and make them more inclusive so they benefit more people or the people that aren't able to benefit 
from them have other programs that would specifically target them? 
The Corporation for Enterprise Development, or CFED, organization based in Washington D.C. 
that's worked in this area for years, has come up with a framework 
for benchmarking these types of programs and their outcomes. 
It covers a number of areas, five that are listed here that are really important 
in terms of asset building work. 
And what they've done is looked at each state and say, 
"Okay, how are the states ranking in on the policies they put in place 
and what are opportunities that are there for the individual states?" 
They've done an opportunity score card that's come out 
every two years for about three or four go-arounds now. 
The next one will be coming out January 31 
and that will give us a snap shot of where we are in Oklahoma. 
I'll talk a little bit about what our results were in the previous one. 
As we can see on this map, Oklahoma was a "C", right in the middle. This was for the 2010 snapshot. 
Again on January 31st you'll be able to go to Oklahoma policies website 
and you'll see the new updated one, but the coming one, we'll still be a "C". 
We'll be able to delve into it and see, where do we rank on these different indicators. 
We won't go into those now, but just wanted let you know that that is coming 
and it's there, and it's a great tool, it's a tool that Oklahoma Assets Coalition has used, 
and I know a number of folks in this room have used, to both assess your own programs as well as 
to think about what else can be done around this. 
Now then there is one way, when we start thinking about those programs, 
what's a framework we can use to think about the policies and the programs? 
One is this Household Financial Security Framework, 
and we look at several different pillars that we can take part in. The first is learn. 
How do we develop education to use our income, put it into assets? 
And a number of other pillars is earning the money, work force development, 
building skills in that area. 
Savings, and then turning that savings into investing. 
And we see this is all a very iterative process. All of these work together. 
And finally we need the protection to help us keep our assets and keep them safe. 
For each of these pillars, there's specific policies. 
Dave is going to talk about those now. Thank you. 
(applause)
Dr. David Blatt: Well, thank you, Steve. Great job providing the overview. 
I also want to thank DHS for arranging this, and Wanda and Leon for the introduction. 
My presentation will focus on some of the ways the state policies can strengthen 
each of these five pillars of household economic security. 
There is much more detailed information about each of these policies 
on the CFED website, which is CFED.org. Look for the scorecard policy section. 
You can also go to the Oklahoma Assets website, oklahomaassets.org, 
or to the assets page of our website, okpolicy. org for a number of issue briefs, 
blog posts and other resources. 
Before I get into this, I should also say that the views are my own 
and not those of the Federal Reserve Bank. 
(laughter)
Dr. Blatt (continues): CFED is definitely not... CFED ranks states on 12 specific policy areas, 
and you have a summary two-page fact sheet that should have been in your packets, 
which goes through all the 12 areas. 
I'm going to focus on 7 of these policy areas, talk about why they matter, 
what Oklahoma is doing well already, and what we could be doing better. 
So the first area is in financial education in schools. 
Financial education helps even young children gain a deeper understanding 
of how money works and how it effects their lives. 
Teaching children the fundamentals of financial capabilities early in life 
means that they will have a better chance to build healthy financial habits 
and enjoy financial success later on in life. 
A growing body of research has demonstrated that financial education 
in schools can have a lasting impact. 
For example, college students from states that require a mandatory financial education course 
as a condition of high school graduation are more likely to create and adhere to a budget 
and less likely to engage in risky credit behaviors. 
State policy can promote financial capability among children and youth 
by requiring that financial education be taught and tested in the classroom. 
The number of states that required students to take a personal finance course 
as a high school graduation requirement almost doubled between 2007 and 2009 from 7 to 13 states. 
And as Leon mentioned, this list now includes Oklahoma. 
Oklahoma Legislature in 2007 or 2008 passed legislation that created 
the Passport of Financial Literacy. 
That involves 14 core competencies that are taught in courses between 7th and 12th grades. 
The competencies include earning an income, understanding state and federal taxes...
I sometimes think that maybe some of our legislatures need to come back and relearn some of these... 
banking and financial services, balancing a checkbook, saving and investing 
and a whole bunch others, 14 in total. 
By 2014, financial education will be a graduation requirement in Oklahoma. 
Adoption of the financial education requirements earned Oklahoma high marks on the score card. 
However, CFED suggests we can go the final step by requiring 
that students be tested in personal finance. 
A second area relates to removing asset limits from public benefits. 
Personal savings and assets are precisely the kind of resources 
that allow individuals and families to move off public-benefit programs. 
When you have asset limits in public benefit programs, 
they discourage some from accessing critical income-boosting benefits in the first place 
and others, who are already receiving benefits, from being able to save for the future. 
The existence of an asset limit, no matter how high sends a signal 
to program applicants and participants that building assets should be avoided 
and that's precisely the wrong kind of message to be sending. 
Evidence from states that have eliminated asset limits suggests 
that the administrative cost savings outweigh any real or potential increases in caseload. 
For instance, eliminating Medicaid asset limits in Oklahoma resulted in 
administrative cost savings of almost one million dollars. 
Now Oklahoma has made great strides in doing away with asset limits 
for our Medicaid program and for food stamps, or SNAP. 
And our policies in this regard have drawn national attention. 
However this situation is different for TANF, 
the Temporary Assistance for Needy Family program, commonly known as cash assistance. 
Most states deny TANF benefits to income-eligible families if they have more assets 
than allowed by state limits. 
States determine the maximum amount of asset limits, including vehicles. 
The average asset limit set by states is in the $2,000-3,000 range. 
Oklahoma actually falls slightly below this range at $1,000 of countable assets. 
In Oklahoma the vehicle exemption is set at $5,000 
based on the equity value with no special stipulations. 
Oklahoma should look closely at the asset limits in the TANF program 
and move to either raise them or do away with them entirely. 
A third area relates to job quality standards. 
Having a job, obviously, is crucial to family economic security. 
But unless the job provides decent earnings and benefits, economic security can prove elusive. 
Federal policy provides a floor for wage and benefit standards. 
However, state policy can expand on and strengthen Federal laws. 
CFED has identified a number of meaningful steps states can take 
to strengthen job quality standards for working families. 
However, none of these policies are currently in effect in Oklahoma. 
The first area is the minimum wage. 
The Federal minimum wage of $7.25 an hour, leaves too many workers falling short. 
Especially when years go by without Congress passing an increase. 
Some states have set their own minimum wage above the Federal Standard, 
and automatically adjust the rate for the cost of living increases each year. 
States can also ensure that the minimum wage laws guarantee full coverage for all workers. 
Contrary to popular conception, not all workers are guaranteed 
the Federal or state minimum wage. 
Many labor laws exempt certain groups of workers from minimum wage coverage. 
States could extend minimum wage protection to agricultural, domestic, home 
care, and tipped workers - workers that receive tips, not those who have tipped over.
(laughter)
Currently, millions of workers are faced with the wrenching choice 
between keeping their income, or taking time off work to care for themselves 
or a loved one because they lacked the basic leave benefits necessary 
to protect their earnings and jobs. 
States can adopt policies including paid medical leave, family leave and sick leave 
that enable workers to address family or health issues 
without jeopardizing their earnings or job security. 
In particular, states can expand the Federal Family Medical Leave Act 
to cover more workers and families. 
And in the interest of time I won't go through some of the details of what states 
can do because hopefully we'll have time for a little bit of questions at the end. 
Another area to help promote savings and asset development relates 
to the college savings incentives. 
To make paying for college more feasible, many families can draw on a range of resources, 
including grants, scholarships, loans and personal savings. 
Personal savings not only help to cover costs, the act of saving also increased 
the likelihood of going to and succeeding in college. 
Research has found, for example, that children in families with as little as $3,000 in savings 
are more likely to graduate from high school than children and family without savings. 
And again, it's like Steve said, even a minimal amount of savings can have a large impact. 
Children with savings dedicated for college education are four times more likely to attend college, 
and savings and other financial assets are a consistent predictor of college outcomes. 
College 529 savings plans are a popular mechanism to promote and incentivize savings. 
However, widespread data and research shows that very few low- and moderate-income households 
take advantage of the 529 college plan options. 
Here in Oklahoma, about 3/4 of all households earn less than $50,000 a year, 
yet only 10% of 529 plan participants make less than $50,000 a year. 
And we had an issue brief that we put out that we didn't make available, 
but you can find on our website, that provided that data. 
Recent research on 529 savings behaviors among low-income families has revealed 
that small changes in the program structure can greatly increase savings and participation rates. 
States should ensure that saving is as easy as possible. 
To do so, States should ensure that very small deposits into 529 plans are permitted. 
Many 529 college savings plans, including Oklahoma's, have a minimum deposit requirement. 
Here it's $25.00, which can be a barrier for very low income families 
who may only have a few dollars a month to deposit. 
The state should allow deposits of any size in 529 accounts, no matter how small. 
A more ambitious approach is one that was recommended by a legislative task force 
in Oklahoma several years ago, which is to create 529 savings accounts for children at birth, 
either universally for all children or for all children with low- and moderate-income households. 
Under this proposal, there would be a deposit made with public funds into a child's account at birth, 
with the possibility of earning additional matching funds for account holder deposits. 
This public investment would create the basis for making college costs affordable for all students 
and perhaps profoundly change expectations about higher education and savings, 
those important psychological impacts that Steve mentioned. 
Another area which Leon and Steve have talked a little bit about are IDA programs. 
A state supported Individual Development Account program is one policy 
that helps low- and moderate-income people build assets. 
IDAs, for those unfamiliar, are special savings accounts that match the deposits 
of low- and moderate-income savers, provided that they participate in financial education 
and use the savings for targeted purposes, most usually for higher education, retirement savings, 
home ownership, home purchase or investing in a small business. 
Research demonstrates that these accounts make families 
more financially secure and communities more stable. 
States should provide funds and support for local IDA programs. 
There are several features of a strong IDA program CFED identifies and encourages. 
Although in the past, the Oklahoma Department of Human Services has committed 
some of its TANF funds for IDA programs, the state currently provides 
no public resources for IDAs that we're aware of. 
This is another area where there is a great opportunity 
for more robust support for asset building in Oklahoma. 
Another area where we're looking at trying to promote asset building through investment 
is first-time home buyer assistance. 
Even in today's challenging housing market, 
a home remains the primary asset for many American households. 
It's an integral part of the American dream 
and provides both physical and financial security. 
Yet, low- and moderate-income families face a number of barriers to achieving home ownership. 
State support for first-time home buyers can help overcome those challenges. 
The CFED scorecard shows that Oklahoma is generally doing well 
in encouraging and supporting first time home buyership. 
The state offers direct lending programs to first time home buyers, 
which assist them in securing mortgage credit at fair rates. 
It has programs that offer grants and loans for down payment assistance, 
and it offers programs specifically designed to help transition renters to home ownership. 
Yet, many first-time home buyers enter the process with little information 
about what to expect or how to protect their interests. 
Educating first-time home buyers on the purchase process 
and helping them make informed decisions about their housing investment, 
is one important way to ensure a successful transaction 
and decrease the likelihood of foreclosure down the road. 
Home ownership counseling is correlated with lower mortgage payments, default rates, 
and makes a significant impact on first time and low- and moderate-income home buyers. 
States can help families make a successful transition to home ownership 
by providing funding for home ownership counseling. 
With the elimination of Federal funding in recent years for HUD-administered 
first-time home ownership counseling, many states are looking to fill the void. 
Home ownership counseling programs are low cost compared to other forms 
of home ownership assistance, making it a relatively efficient use of funding. 
There are 41 states that fund home ownership counseling. 
Oklahoma should consider doing so as well.
Finally, we're going to get to the last policy area that we can look at 
which relates to protection from predatory short-term loans. 
Predatory lending strips wealth from financially vulnerable families 
and leaves them with fewer resources to devote to building assets 
and climbing up the economic ladder. 
Among the most prevalent and wealth-stripping short-term loan products 
are payday loans, title loans, and abusive installment loans. 
Lenders of these products often charge exorbitant fees and interest rates, 
lend without regard to borrowers ability to re-pay, 
continually refinance loans for a short period of time, 
and in some cases commit outright fraud and deception. 
Oklahoma has already enacted some important protections, 
including prohibiting auto title loans and covering short-term loans 
under state consumer protection laws. 
Our payday lending law also has an important safeguard in requiring 
that all lenders must participate in an electronic database and verification system. 
However, the law has failed to protect the most vulnerable consumers 
from taking out loans at truly exorbitant interest rates 
or from getting trapped in a cycle of chronic borrowing. 
Our law allows for fees of $45.00 on a 12-day, $300.00 loan. 
And so you don't have to do the math, I'll tell you what the APR is- it's 452%. 
And the database that payday lenders participate in reveals 
that most loans are going to chronic borrowers. 
And we have a chart in the issue brief that was part of your packet. 
Three out of every five loans go to borrowers who take out an average 
of at least one loan each and every month. 
There are several things states can do to better protect consumers. 
The most straight forward solution is to prohibit payday lending altogether 
or impose an APR cap of 36% or less, 
as the Federal government has done for loans to military personnel. 
Or Oklahoma could curtail the debt treadmill by limiting borrowers 
to one outstanding loan at a time, imposing a wait period between loans, 
and limiting the number of high-cost loans borrowers can take out over a given time period. 
Our coalition, Oklahoma assets, will be hosting a summit on high-cost lending in June 
to explore the issue further and help develop the right solutions for Oklahoma. 
If you signed up for our mailing list, we'll keep you posted 
and we really hope that you'll be able to participate in that important event. 
So just to conclude quickly, there's lots a state policy can do to promote assets 
as a way to strengthen family economic security and alleviate poverty. 
We hope you'll get engaged in these efforts by participating in 
the ongoing work of Oklahoma Assets and by sharing your thoughts and suggestions 
for how to help Oklahoma families get ahead. 
And with that, thank you very much.