Community Assets Blog

Savings for Working Families Act Introduced in the House: 900,000 Accounts and $20 million for Financial Education the Same as Senate Bill

CFED reports that Savings advocates now have The Savings for Working Families Act (SWFA) in both the House of Representatives and the Senate. The original sponsors of the House bill introduced on February 14 are Representatives Joe Pitts (R-PA); Phil English (R-PA); Melissa Hart (R-PA); Stephanie Tubbs Jones (D-OH); Mike McIntyre (D-NC); and Jane Harman (D-CA).

Both bills create a tax credit to support 900,000 Individual Development Accounts. The bills provide a tax credit to financial institutions that match the savings of working families and individuals who participate in financial education classes and save for homeownership, business start-ups, education, or retirement. Both bills include $20 million for nonprofits to provide financial education to savers. Read a one-page description.

SWFA is also included in two versions in the Senate:

* S. 922 is the free-standing Savings for Working Families Act of 2005 which is the same as H.R. 4751 and follows President Bush's budget request of $1.2 billion for the IDA Tax Credit.

* S. 1780, The Care Act includes S. 922 language verbatim.

The Bottom Line

With the nation's savings rate having fallen below zero percent last year, the Savings for Working Families Act ensures that our nation's savings and ownership policies assist working-poor families by enabling them to save, build wealth, and enter the financial mainstream through the use of a financial product tailored to their needs: Individual Development Accounts (IDAs).