To coincide with the launch of its Adaptive Financial Education Program for individuals with diverse abilities, TD Bank has partnered with Thomas Foley, J.D., managing director of the World Institute on Disability. Foley is the author of EQUITY, the first asset building book for people with disabilities. He also serves on the Cities for Financial Empowerment Fund Board and has been recognized by numerous organizations, including the Center for Economic Development (CFED), National Disability Institute (NDI), and Center for Financial Independence and Innovation (CFII) for his financial inclusion work.
Foley has endorsed TD's adaptive education program, and shares his thoughts below about the importance of and the need for financial programs for a very underserved population.
"I am so proud to serve a company that is committed to empowering people of all abilities to overcome obstacles and achieve their goals," says John Pluhowski, SVP and Chief Communications Officer for TD Bank. "This article highlights why actively supporting the inclusion of individuals with diverse abilities in the global economy is so vital and timely. By understanding and enabling financial empowerment, we can create a brighter tomorrow for all."
Empowering People with Disabilities to Achieve their Financial Goals
By Thomas Foley, J.D.
The topic of financial empowerment has increasingly influenced economic discourse in recent years, as a growing number of Americans experience financial insecurity. One particular group of Americans, however, receives nominal attention when it comes to financial empowerment and these are individuals with disabilities.
Research shows that providing people of all abilities and backgrounds with the financial knowledge, tools, access and resources they need to make better financial decisions is not only a social good, it's also economically expedient, increasing labor participation, while reducing costly government benefits.
In their ground-breaking work, Financial Literacy and Economic Outcomes: Evidence and Policy Implication, Mitchell and Lusardi suggest that nearly one-third of wealth inequality can be explained by the financial-knowledge gap. According to the authors, this gap could increase as consumers confront ever-more sophisticated financial products and services.
Given that around 56.7 million people — 19 percent of the population – have a disability, according to the 2010 census; nearly 16 million Americans with a disability age 25 or older have at least some college education; and over two million have annual incomes over $50,000, providing financial education and access to people with disabilities is vital to facilitating a healthier, more inclusive economy.
Illuminating a history of invisibility
People with disabilities have faced economic exclusion throughout history, largely owing to discriminatory attitudes and policies. And 28 years after the passage of the Americans with Disabilities Act, individuals with disabilities continue to battle against rampant societal and institutionalized bias.
Frequently stereotyped as unproductive and/or costly to accommodate, individuals with disabilities have suffered higher rates of unemployment along with lower levels of income and savings.
A 2015 survey from the Financial Industry Regulatory Authority’s Investor Education Foundation shows that people with disabilities reported lower scores on a financial literacy test than their non-disabled counterparts (44% vs. 53% average) and had lower self-perceived levels of financial knowledge (70% vs. 81%). People with disabilities are also more than twice as likely to find it “very difficult” to cover expenses and bills (23% vs. 9%), and twice as likely to be unbanked (12% vs. 6%), according to leading research.
Exacerbating the equity gap, many government disability benefit programs cap savings at $2,000, a clear disincentive for individuals with disabilities to become financially self-sufficient.
Addressing this inequity demands a radical shift in public perception along with educational tools and opportunities that empower individuals with disabilities to lead more independent and productive lives.
The power of progress
Thanks to growing awareness around the economic advantages of financial empowerment, the Achieving a Better Life Experience (ABLE) Act is one of a handful of progressive policies that is enabling individuals with disabilities to save money for the first time in history, without jeopardizing their Federal benefits. Governmental agencies, nonprofits and purpose-driven banks (including TD Bank, Bank of America, Citi and others) have begun introducing programs and services to better serve current and future customers with disabilities.
In fact, TD Bank recently launched an Adaptive Financial Education program that offers a variety of on-site seminars along with interactive tools, tutorials and games that enable "individuals with diverse abilities" and their caregivers to navigate their financial lives more independently and successfully. This program teaches the fundamentals of banking to a segment of people that has been woefully underserved.
As a direct consequence of these new policies and programs, individuals with disabilities are able to work more and save more, eliminate overdraft fees, and improve their credit scores. They are purchasing more homes, establishing college savings plans for themselves and their children, and leading more fulfilling lives.
Given this trend, I can't wait to see the 2020 census results.
Of this I am sure: When we, as a country, financially empower people with disabilities, we create a more vibrant and inclusive economy for all.