Press Releases and Media Advisories

Statewide Program Receives Federal Grant to Bring Economic Prosperity to More Utahns

Salt Lake City, Utah – July 10, 2008– Facing ballooning health care costs, rising education costs and climbing gas prices, more and more individuals and families are vulnerable to facing serious financial hardship. On top of rising costs and diminished savings, a job loss or health emergency can spell financial ruin for a family already scrambling to keep up. Financial fragility is becoming commonplace: one-third of families in this country have a zero net worth, or are in debt. Twenty five percent are asset poor, meaning they lack the resources to live at the federal poverty level for more than three months after losing their income. These are unnerving statistics.

Seeing the important link between assets and financial well-being, the federal government in 1996 started to encourage Individual Development Accounts (IDAs). IDAs are special savings accounts. Deposits made by the account holder are matched – usually at a rate of two to one or higher–by public and private funds. Currently, more than 400 IDA projects are operating nationwide.

Locally, AAA Fair Credit Foundation manages and coordinates the Utah Individual Development Account Network (UIDAN) and was recently awarded $350,000 from the Office of Community Services - Assets for Independence Program to support their efforts statewide.

Capitalizing on a three-to-one savings match, UIDAN savers have accumulated nearly $182,000 since the program's inception in 2004. Funds must be spent on first-time home-ownership, post-secondary education or start up or growth of a small business. Interest in the program is skyrocketing. Since the program started over 2,000 people have completed the required 8 hours of personal financial management training. Over the next year, UIDAN expects to add at least 200 or more new IDA participants.

It's important to note that matched funds are not giveaways. Participants must first meet certain income restrictions and then earn matched funds by attending financial management training courses, receiving asset-specific training related to the asset they plan to purchase, working one-on-one with an asset-building coach, and consistently meet their monthly personal savings commitment. Matched funds are distributed directly to the vendor only when a participant has reached the end of their savings term and has met all the requirements for purchasing one of the three qualifying assets.

IDAs make it possible for low and moderate income families to learn and develop solid money management skills and build the financial assets they need to achieve long-term financial stability. Families that acquire productive assets are more economically secure, have more options in life, and can pass on status and opportunities to future generations. "We're not just handing out money, we're asking for a commitment and creating educated consumers. These assets have positive social, psychological, and civic effects that are independent of the effects of income," said Preston Cochrane, President of AAA Fair Credit Foundation.

According to the Center for Enterprise Development (CFED), every public dollar invested in IDAs generates $5 for the community. This is measured in new businesses and jobs, increased earning and educational achievements, new and improved homes, higher tax receipts and reduced welfare expenditures.

Assets provide benefits that income alone cannot offer. People with assets have more options in life and can pass on status and opportunities for future generations. Broadening the ownership of assets through IDAs is one way to help the nation's low-income working families move out of poverty, giving them a "leg-up" to enter the financial mainstream.

For more information please visit www.uidan.org or call 800-351-4195.

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Press Contact:
Jennifer Rohn
Public Relations Manager
800-351-4195 ext. 301
jenniferr@faircredit.org