The Importance of Financial Inclusion for People with Disabilities Artist: Dadu Shin Michael Morris Executive Director National Disability Institute 1
NDI History • In 2000, no disability organization or government agency at any level wanted to talk abut or address the challenges of poverty confronting millions of Americans with disabilities everyday. • NDI was incorporated in 2005 as a 501(c)3 nonprofit. • The Board of Directors are thought leaders in disability and financial communities. • NDI has 35 staff located in 10 states and is headquartered in Washington, DC. • In 2019, NDI has over 12 public and private funders with activities touching target audiences in all 50 states. 2
NDI Mission The mission of National Disability Institute (NDI) is to drive social impact to build a better economic future for people with disabilities and their families through pioneering research, advocacy, policy development, public education, and innovative demonstration projects. 3
NDI Priorities • Improve and nurture relationships between the disability and financial communities to advance financial inclusion and economic stability for individuals across the spectrum of disabilities. • Develop and document pathways to improved economic self-sufficiency for youths and adults with disabilities. • Align public policy to promote work, saving, and asset accumulation. • Improve collaboration across federal agencies to advance financial capability and a better economic future for individuals with disabilities. 4
Financial Inclusion is: • Accessible and affordable financial services • Financial education to make informed financial decisions • Economic pathways to financial stability and security • Overcoming barriers to financial stability with reduced historical dependence on means- tested public benefits Artist: Patrick Connally, Downtown Berkeley 5
For People with Disabilities, Financial Inclusion is: • Not a fringe issue • Fundamental to the definition of community • Fundamental to solving other intractable social issues Artist: Gen Gaines, A Summer Stroll on RIA 6
What is Disability: Changing Conceptualization • Medical model o Says that a disability is a condition within a person and that the only way to address that condition is to “fix” the person. • Social Model o Says that disability is an interaction between the person and the environment—that people are limited by barriers in society, not solely by their disability. These barriers can be physical, programmatic or attitudinal. • Therefore, our job is to adjust the financial environment to meet the needs of ALL. For a good descript ion of t he S ocial model see “ The S ocial Model of Disabilit y” by Tom S hakespeare in The Disabilit y S t udies Reader, 2017. ht t ps:/ / books.google.com/ books? hl=en&lr=&id=aiQlDwAAQBAJ&oi=fnd&pg=PA195&dq=t om+shakespeare+social+model&ot s=TAzrb-LDo- &sig=A78t LWkL6FvxX2ZlxeWpkfhBgEc#v=onepage&q=t om% 20shakespeare% 20social% 20model&f=false 7
Who Are People with Disabilities? • 40-57 million people • 13-20% of total population • 26% of households have a member with a disability • Diverse in terms of type of disability, race, age, age of onset, socioeconomic situation 8 Artist: Liam Hassan Beserekumo, untitled
Intersectionality of Disability and Other Identities The American Community Survey estimates 14% of African Americans, 14% of Whites and 9% of Latinos have a disability. The prevalence of disability increases with age. Some research suggests the prevalence of disability is higher among LBQT adults compared with their heterosexual counter parts.* *Karen I. Fredriksen-Goldsen, Hyun-Jun Kim, and Susan E. Barkan (2012) Disability Among Lesbian, Gay, and Bisexual Adults: Disparities in Prevalence and Risk. American Journal of Public 9 Health. 102(1). Artist: Corbett O’Toole, Disabled Women of Color (Quilt)
The Intersection of Disability, Color and Poverty Poverty Rate Among Working-age Race and disability are not Adults with Disabilities completely separate sources of 45% disadvantage that parallel each 39% 40% other. Race and disability are 35% 32% overlapping identities that are 28% 30% both related to systemic 25% 25% 22% 22% inequality. 20% 20% NDI has documented 13% 15% 12% 10% disparities by disability and 10% color in poverty rate, 5% educational attainment, 0% employment status, use of NH White Black Latino Asian All With Disability No Disability financial services and financial stress. 10
Unbanked: Disability Gap is Growing 20.0% 18.9% 18.4% 18.1% 17.6% 15.0% 2017: 12.4 2011: 11.5 percentage percentage point point difference difference 10.0% 7.4% 7.2% 6.5% 5.7% 5.0% 2011 2013 2015 2017 Wit h Disability No Disability Source: 2011-2017 FDIC Surveys of Unbanked and Underbanked Households 11
Use of Accounts by Banked Households Even among households with bank accounts … • Households with a disability 39% 18% 4% 1% 57% 80% less likely to have both a checking and savings account. • Households with a disability are much less likely to use online banking (47% compared with 73%). • More likely to use the bank teller as the primary method to access their accounts. Source: 2017 FDIC Surveys of Unbanked and Underbanked Households 12
Difficulty Covering Expenses and Making Ends Meet With Disability 26 47 23 No Disabilit y 49 40 9 Not at all difficult S omewhat difficult Very difficult Source: FINRA Investor Education Foundation, National Financial Capability Survey, 2015 13
Financial Exclusion Leads to Potentially Expensive Use of Alternative Financial Services Use of Alternative Financial Services In Last 12 Months 33% 35% 30% 28% 23% 25% 19% 20% 15% 12% 10% 7% 5% 0% Used Any AFS in Last 12 Mont hs Transaction AFS Credit AFS With Disability No Disability Source: 2017 FDIC Surveys of Unbanked and Underbanked Households 14
People with Disabilities Have a Higher Unmet Need for Credit Unmet Need for Credit by Disability S tatus, 2017 19 13 12 9 7 6 2 2 Denied bank credit Discouraged about Used nonbank credit Unmet need for applying for bank credit (any of credit previous t hree indicat ors) With Disabilty No Disability Source: 2017 FDIC Surveys of Unbanked and Underbanked Households 15
The Gap in the Percentage of Households With No Mainstream Credit Products has Increased Over Time Percentage of Households with No Mainstream Credit Products 50 47% 40% 40 23 percentage point disability gap in 2015 35 percentage point 30 disability gap in 2017 24% 20 15% 10 0 2015 2017 Wit h Disabilt y No Disability Source: 2017 FDIC Surveys of Unbanked and Underbanked Households 16
Impact of Financial Stress • Almost ½ skip medical treatments because of cost ⅓ are late on • mortgage payments ⅓ overdraw • checking accounts Artist: Sherwin Long, Peace of Mind 17
Recommendations • Expand Access to ABLE Accounts o Provide education about the benefits of ABLE accounts. o Create automatic transfer of funds into ABLE accounts. o Develop product that allows Credit Unions to open ABLE accounts for their customers • Enhance Trust and Confidence o Conduct anti-bias training for credit union staff o Increase hiring of people with disabilities as credit union staff members o Establish branches with convenient locations and expanded hours 18
Recommendations (continued) • Ensure Accessibility 1. Accept calls from video phones and video relay services 2. Locate ATMs inside rather than outside credit union location 3. Exceed minimal access requirements 4. Ensure that online sites and mobile apps meet accessibility guidelines and are easily usable by all customers • Develop Responsive Products and Services o Reduce length of delays to access cash from check deposits o Allow low minimum savings account requirements and free checking for low-income consumers o Initiate small dollar low-interest loans o Improve access to financial education and counseling. 19
Recommendations (cont.) • Advance Innovative Solutions o Consider enhancements to mobile banking and fintech apps based on input from the disability community o Use responsive technology to help customers make decisions such as automated alerts and nudges to encourage positive financial choices. 20
NDI Resources Available at: https://www.nationaldisabilityinstitute.org/reports/ 21
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