Press Release: Tuesday September 12, 4:00 pm ET
Source: Federal Reserve Bank of Richmond

Fifth District Fed Builds Collaborative in South Carolina to Help the Working Poor Close the Asset Gap

RICHMOND, Va., Sept. 12 /PRNewswire/ — A new coalition, convened by the Federal Reserve Bank of Richmond’s Community Affairs Office, debuted today during the 2006 Housing and Community Economic Development Summit in Charleston, South Carolina. The South Carolina Asset Development Collaborative (SCADC) seeks to improve the future economic potential of working poor families in South Carolina by helping to develop and implement asset building policies and programs and raise the awareness of economic and educational opportunities already available to the working poor.

SCADC unites the South Carolina Association of Community Development Corporations, the South Carolina Commission for Minority Affairs, the South Carolina Consumer Affairs Department, Benedict College, Carolina First Bank and Bank of America. Two national organizations, the Corporation for Enterprise Development (CFED) and Center for Social Development provided the collaborative with local data.

A variety of statistics led to the Fed’s involvement and facilitation of SCADC. A study of assets and wealth-building opportunities by CFED, a nonprofit that tracks economic opportunities for low-income people nationwide, ranks South Carolina 44th in the country in households with checking accounts and 43rd in poverty by gender.

“Strong coalitions among our local and state governments and our private sector partners are key elements in helping to raise the standard of living of our lower income taxpayers,” said Joyce Robbins of the IRS. “These groups provide the knowledge, assets and, more importantly, the manpower needed to make a difference in our South Carolina communities.”

The most recent data from the Internal Revenue Service’s Earned Income Tax Credit Program (EITC) program showed that in 2002 more than $132 million available to South Carolina’s working poor families went unclaimed. EITC provides a refundable tax credit that supplements the wages of working poor families by offsetting their income tax liability. If the credit exceeds the amount of income taxes owed, the taxpayer is given a lump sum payment or tax refund for the difference. The tax credit is worth up to $4,400 for a working family with two or more children.

“Not only does the EITC lift more children out of poverty than any other program, it also accomplishes this by rewarding work over welfare,” said Dr. Lucy Gorham, who runs EITC Carolinas. “The next step is to link families to opportunities to build assets so that they and their children can build a more secure financial future.”

SCADC plans to launch an awareness campaign to inform taxpayers of their eligibility for tax credits. For more information, contact the SCADC at 843-579-9855.

The Fifth Federal Reserve District includes the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia. The Community Affairs Office’s mission is to supports the Federal Reserve System’s economic growth objectives by promoting community development and fair and impartial access to credit.