Texans Can Help Defeat Predatory Lenders by Voting for Proposition 7

One-third of all Texas households lack a savings account, and nearly half are liquid asset poor, meaning they are in a constant state of financial insecurity because they lack savings. These Texans are on the brink of financial hardship because they have no emergency funds in place in the event of a job loss, medical crisis, or other costly emergency. These startling statistics illustrate how prevalent the issue of financial insecurity is in Texas. The solution to this issue needs to be a comprehensive one with multiple actions taken by the Legislature to increase financial security in communities statewide. But right now Texans have the ability to sign off on one innovative solution to the problem: Proposition 7.If voters approve Proposition 7, otherwise known as the Texas Savings Promotion Act, banks and credit unions will be able to award prizes, including cash, to customers who make deposits into their own savings accounts. Those customers would face no penalties, fees or higher interest rates for participating in the program. They simply save and have the opportunity to win big.Twenty states across the U.S. currently allow financial institutions to operate prize-linked savings account programs. They have proved to be very successful in attracting financially vulnerable individuals to open savings accounts. Data collected by Commonwealth on the programs that are already in operation found that more than 80 percent of those who chose to open prize-linked savings accounts were financially vulnerable, and almost 60 percent have no emergency savings before starting the program. The average account savings after the program was fully up and running was more than $2,400.  Continue reading...