Letter to Members of the Senate regarding the Savings for Working Families Act of 2001.
July 11, 2001
On behalf of the Credit Union National Association and 80 million credit union members nationwide, I am writing to urge you to support and co-sponsor S. 1025, the Savings for Working Families Act of 2001. This bipartisan legislation would create an increased federal commitment for Individual Development Accounts (IDAs), which are one of the best ways to help the working poor enter the financial mainstream and build for the future.
IDAs, which have received strong support from President Bush, are one of the most innovative and promising tools available to help low- income families learn to save, invest and accumulate assets. As you may know, IDAs are savings accounts for low-income workers that can be used to capitalize a small business, further education and training, or purchase a first home. The accountholders' savings are matched by participating financial institutions or their affiliates. Under the legislation, the financial institutions or their affiliates would be reimbursed through a federal tax credit.
IDAs are a proven method of rewarding hard work, responsibility and thrift. Many credit unions across the country are offering these accounts; in fact, credit union members currently comprise bout one third of all IDA accounts. The full benefit of IDAs is not being realized due to the challenge of raising the matching funds. Passage of S. 1025 would provide for a federal tax credit, thereby increasing opportunities to raise the matching funds. Passage of this bill could increase credit union members' participation by four times.
An IDA provision has also been included in S. 592, the Savings Opportunity and Charitable Giving Act of 2001, and mirrors S. 1025.
It is critical that this successful empowerment tool be made available nationwide this year to the millions of working families who are trying to secure their piece of the American Dream. Therefore, I urge you to co-sponsor S. 1025 and to support the passage of IDA legislation in this Congress. Thank you for your consideration of this matter.
Daniel A. Mica
President & CEO