“I just wanted a job that paid more,” Powell explained. First Premier offered him $16 an hour in base pay, which could rise with incentive pay to $18 to $20 an hour depending on Powell’s success in collecting debts.

In a country where middle-class wages are hard to come by without a college degree, the comparatively good pay of debt collection can be a big draw. According to data from the Bureau of Labor Statistics, the median hourly pay in 2018 for debt collectors was $17.32, a big step-up in pay from other lines of work such as retail sales ($12.75) or fast food ($10.89).

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71 million U.S. adults have fallen behind on a bill and now have debt in collections. According to data from the Federal Reserve Bank of New York, U.S. household debt is at an all-time high — and behind our system of easy credit are roughly 300,000 debt collectors, working for both lenders and 3rd-party collection agencies, whose job it is to recover money from American families.

These debt collectors may not match your expectations of slick-talking hucksters willing to do whatever it takes to get paid. Like many of the debtors they collect from, the collectors are often low-income themselves. While most have a high-school diploma or equivalent, some, like Powell, are teenagers. 69 percent of debt collectors are female.

At relatively low wages, debt collectors are expected to engage in what University of Brighton psychologist Carl Walker has called “mental warfare” in order to collect; the industry can leave behind scars for both the borrowers and the collectors. It’s a grueling job. In a 2016 Consumer Financial Protection Bureau survey, debt collection agencies with more than 250 employees reported an average turnover rate of 75 percent to 100 percent.

If you were born into the middle class, you’ve probably never heard of Powell’s former employer, First Premier, but it’s a major player in America’s system of subprime credit. At one point, it accounted for as much as 47 percent of all subprime credit card solicitations sent out in the United States, and now it’s the nation’s 12th biggest issuer of Mastercard credit cards.

First Premier credit cards often come with eye-popping fees. One, for example, has a $300 credit limit, a $95 one-time “program fee,” $75 in total monthly and annual fees in the first year, $120 in monthly and annual fees in all subsequent years, and a 36 percent APR. Those exorbitant prices draw in only those consumers with few other options for credit.

As Powell explained, if the borrower couldn’t pay on the spot, the collections agents at First Premier would ask for a “promise to pay.” There was folk wisdom about what different promises to pay meant: a $20 money order on the 3rd of the month meant the customer was on disability, and if it was coming on the first of the month, it meant the customer was a senior collecting Social Security. Getting a customer’s checking account credentials was ideal — it let First Premier automatically debit the customer’s bank account on the specified date — but debit and credit card payments, payments by Western Union, or money orders were all fair game as well. A lot of customers were surprised or angry about how much they owed.

The job “definitely broke you down,” said Powell. “At a certain point, you felt like you weren’t doing the right thing.” Powell “no-called, no-showed” — e.g. got fired after failing to show up to work — a little more than a year after he started. “The lion’s share [of customers] probably would have been better off if they had never opened the card,” he said.

When Chaz Fertal went in for his job interview at Checkmate in Phoenix, Arizona, in 2010, he was originally afraid he was getting duped in a Craigslist scam. Fertal showed up to an office that appeared deserted, with blacked-out windows, only to find out the building had been intentionally obscured; Checkmate was concerned that angry customers would try to track the debt collectors down. Fertal’s base pay at Checkmate was around $2,000 per month, but offered the possibility of big commission checks. Fertal says his biggest was around $4,400, meaning your pay could more than double if you were good at getting borrowers to make payments.

A current Checkmate employee confirmed over the phone that the company’s current interest rates in Arizona were as high as 180 percent per year. As Fertal explained, a customer wouldn’t actually have to make progress on paying down their debt for the Checkmate collector to earn his commission. If customers fell behind and went into collections, Fertal said he would earn commission whether he convinced them to pay the full balance or if he convinced the borrower to pay off outstanding interest while taking out a new loan. For the purposes of commission, taking on a new loan counted as “paying off” the old one.

Fertal said the incentive scheme encouraged agents to push borrowers into these loan “rollovers.” “You’d talk to a customer on the phone who after four or five months would still owe the whole amount” and they’d be outraged, Fertal said, when they realized the payments they’d made had done nothing to pay down their debt.

For Fertal, there was a clear day, he said, when he realized he didn’t want to work at Checkmate anymore. When Checkmate customers applied for loans, they typically gave Checkmate a bank account routing and account number, giving Checkmate the right to withdraw payments; if a customer went past due, the loan entered default, and, Fertal says, Checkmate would attempt to withdraw the whole outstanding loan balance from the customer’s checking account. If Checkmate wasn’t successful at withdrawing the full amount, they’d break the balance into smaller amounts and try again — Fertal said the company’s practice was to make three attempts per day, starting at 4:30 in the morning, just after any direct deposits would have landed in the borrower’s account overnight. The only way, Fertal says, a borrower could stop the process, was by making a promise to pay and providing a credit card number or debit card number to do so.

Fertal remembers one borrower well. Overnight, Fertal says, Checkmate had taken the woman’s “entire paycheck, I think it was a thousand dollars,” he says. “She had two or three kids. She told me, ‘I have nothing to feed my kids, our refrigerator is empty, they took everything.’ I went to the ACH department and they couldn’t reverse it. She told me, ‘I don’t know what I’m going to do, the only thing I can think of is killing myself’ — and I knew it wasn’t a lie, you could hear the loss in her voice. I remember telling her, ‘your kids need you more than anything right now, and that that’s not the answer.’ I was trying to see if there was anything we could do, even taking out a new loan, but she still had a balance on her existing loan.”

Fertal quit shortly after that phone call in 2011, and he said he still thinks about that woman and her family.

Fertal and Powell’s experiences show the toll subprime credit and debt collection industries take not only on their customers, but on the front-line agents as well. These debt collection jobs offer Americans a step up in financial security, in exchange for taking on the difficult role as intermediary between high-priced lenders and consumers in dire straits.

“The environment would just be toxic. You’d get a worse and worse impression of people,” said Fertal. “The reality is that you’re not talking with people who are in a great place in their life.”

Editor’s note: Trevor Powell asked that his name be changed for privacy.

This post has been edited to clarify Fertal’s commission earnings.

For low-income people, that experience isn’t just annoying. It can also be a real financial hardship. Mismatches between available funds and expenses can create a spiral of bank overdraft fees and denied transactions, and the deeper in someone gets, the more insurmountable it can feel.

“It’s very embarrassing,” a commenter told TalkPoverty, describing a day of being hit with three separate overdraft fees while waiting on  processing for a paycheck.

That’s something that could change as early as 2024 with a proposed real-time payments system recently announced by the Federal Reserve, America’s central bank. With FedNow, as it’s being called, funds could be moved any day, any time, nearly instantly.

The move is long overdue and has big implications for people who cannot afford to wait for a transaction to clear, such as the 1.8 million people earning minimum wage or less. A waiter making a tipped minimum wage, for example, can ill afford to deposit a paycheck and wait for it to clear with their rent deadline looming, and the technology already exists to fix the problem.

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Real-time payments are used all over the world to move funds rapidly; they are a type of “faster payments,” which speed the payment process relative to the current standard, but they aren’t just faster. They are, as the name implies, virtually instant.

The United States, though, has remained stuck in the past with an outdated payments system created decades ago that doesn’t operate every day or at all times throughout the day.

In places such as Mexico, the U.K., Japan, Australia, and Turkey, both private firms and central banks own and operate faster payment systems — and in the U.S., a consortium of banks known as the Clearing House operates its own, called, creatively, RTP (for Real-Time Payments). RTP has been rolling out since 2017, and is open to all federally-insured financial institutions. The Clearing House claims RTP is active on 50 percent of direct deposit accounts in America, but the service’s initial customers were the same larger banks that make up the Clearing House.

These account for a large volume of American bank accounts, but a smaller segment of American banks; good for Chase, but perhaps not good for clients, especially since RTP controls pricing and access, potentially to the detriment of some users.

The Fed, building on the work of a task force formed to explore faster payments, wants to leverage its already extensive network of connections with banks, credit unions, and other financial institutions large and small. The goal is not to replace RTP, but to offer another option, and specifically a public one, which offers a net good and adheres to the government’s critical role in promoting fair access, pricing, and opportunity for all.

This is important because while the Clearing House has promised to hold rates steady, there’s no guarantee it will. Smaller banks are concerned about being cut out by what former Independent Community Bankers of America president and CEO Cam Fine described as a “monopoly.” Clearing House’s target date of 2020 for covering all direct deposit accounts in the U.S. is also likely unrealistic, while the Fed’s existing network and reach could make near-universal access much more logistically possible.

Fine notes that the Federal Reserve has been involved in payment processing for over 100 years; this is just another iteration of the central bank’s duties, a sentiment echoed by Chairman Jerome Powell.

Real-time settlement has big implications for businesses, especially small ones. But for low-income people, it could be transformative. Americans spend $24 billion in overdraft fees annually, some of which are driven by issues resolvable via faster payments; if there’s no lag between deposit and funds availability, there’s less likelihood of engaging in a transaction that will overdraw an account. If someone expects to get paid on Friday, the funds are instantly available, and they can pay their rent without worrying about a financial penalty.

People also spend about $7 billion on payday loans, which one in ten Americans have used. Real-time payments can’t wipe out the payday loan industry, but they can take a chunk out of it, since some of those loans are taken out in desperation by people who need money immediately, not after the time it takes for a bank to settle. Similarly, Americans spend approximately $2 billion cashing checks every year. That’s not just people who don’t have bank accounts; it includes people who can’t afford to wait for their accounts to clear.

That’s billions of dollars low-income people can ill-afford going into the pockets of companies with entire families of products built upon exploiting financial vulnerabilities.

Thomas Hoenig, former president of the Federal Reserve in Kansas City, former vice-Chair of the Federal Deposit Insurance Corporation, and currently a senior fellow at the Mercatus Center, notes that FedNow has another potential benefit as the system is built out: It could extend to other financial institutions such as remittance services. Immigrants sending money home through Western Union could therefore benefit from modernization to U.S. payments system, as a faster payments service in the United States can communicate with similar systems overseas, instantly transferring funds from senders to recipients.

Real-time payments will not fix issues like a federal minimum wage that hasn’t increased since 2009, repeated attacks on nutrition programs, and attempts at undermining unions. But they will help low-income people get, and move, their money faster, reducing the strain that comes from living paycheck to paycheck but not actually knowing when the funds in your paycheck will be accessible.

The hacker, Paige Thompson, gained access to personal information such as income, address, and credit scores for seemingly all recent applicants to Capital One credit cards. For secured card applicants, who tend to be low-income, bank account information was compromised as well.

A secured card normally resembles other subprime credit cards — they still report to the credit bureaus, they still charge interest and late fees, and you can still default on the card if you don’t make your payments. But borrowers need to put down a security deposit in order to obtain one, which requires access to the borrower’s bank account information.

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The fact that bank account credentials were compromised raises the stakes for those consumers: even compared to credit card fraud, resolving checking account fraud is no walk in the park, and the costs here will be borne by people who can’t afford to take a hit.

For consumers who don’t think they can get approved for a normal credit card, secured cards can be appealing. And who are those consumers? They don’t have a lot of money: Federal Reserve Bank of Philadelphia researcher Larry Santucci has found that the median income of secured card customers is $35,000, compared to $50,000 for Americans with unsecured credit cards.

Of course, given that these incomes are self-reported, and that credit card companies aren’t required to validate the income of all credit card applicants, this income data is almost certainly overstated: Plenty of people know they can get declined for a credit card for being too poor.

I worked at Capital One for five years, from 2013 to 2018. For a short stint during that time, I was in charge of the secured card product. I know most secured card customers are in no position to absorb a financial shock — and, unfortunately, having your checking account data leaked puts you in a much more dangerous position than a simple breach of your credit card number, or even your Social Security number.

If you apply for a Capital One secured card and get approved, you’ll initially be assigned a $200 credit limit, contingent on you sending in a security deposit of either $49, $99, or $200. The minimum security deposit you have to make depends on your risk as an applicant.

Think about that for a second: People are putting down a $200 deposit, to get a $200 credit limit, and the product makes money because people then borrow against their own deposit at a 26.99 percent interest rate — one of the highest in the industry — and get hit with late fees up to $39 when they fail to make payments on time. Santucci has found that only one in four secured card customers pays their credit card bill in full every month.

Some secured card customers are “new-to-credit,” but major banks such as Bank of America, Wells Fargo, and Discover have all been known to give out credit cards, at least with small credit limits, to people without credit history. If you’re new-to-credit but you have a checking account, and you also realize that your odds of being approved for an unsecured credit card are pretty high if you walk into a branch of your bank (of course, not everyone realizes this), you’re not likely to find a secured card attractive.

More commonly, secured card customers have low credit scores – the typical customer’s FICO is in the 500s — an obvious indication that they’ve struggled in the past to pay bills and to make ends meet. This condition can be temporary —your credit score might still be low even though your finances have recovered, since missed payments lower your credit score for seven years — but many Americans who struggle financially never achieve the stability they’d need to keep a high credit score. In a country where plenty of people live paycheck-to-paycheck, but only a third have subprime credit scores, secured card holders and applicants tend to be under real financial distress.

Because secured card applicants have to put down a security deposit, they’re not approved until they give Capital One checking or savings account information and their deposit is sent, unlike users of unsecured cards. This is what puts Capital One’s secured card holders at greatest risk after the breach.

To see why, it’s helpful to take a second to think about the exact ways in which a data breach comes back to bite consumers — especially given that you’re usually not on the hook for purchases fraudulently made in your name, whether someone has stolen your credit or debit card, or opened up an account using your identity.

Lose your credit card number, as in the Target or Home Depot breach, and you can usually resolve things with quick phone call to your bank if a fraudster makes purchases on your card. Lose your Social Security number and address, like in the Equifax breach, and someone can open up new accounts in your name, or take over your existing accounts by calling the bank, pretending to be you, and changing the contact information. Proving someone else did this can be anywhere from moderately to extremely time-consuming depending on your circumstances: it took reporter Phil McKenna a few days to clear things up, a typical amount of time for garden-variety identity theft, where you’re usually out time but not money.

But let’s consider what it will look like if someone uses the checking account information from a Capital One secured card customer to commit ACH (Automated Clearing House) fraud – using the customer’s checking account routing numbers and account numbers to set up unauthorized withdrawals, write counterfeit checks, or even pay off the fraudster’s own credit card.

If you’re a Capital One secured card customer, your checking account could be emptied. If you don’t notice what happened, you might try to make purchases and get hit with overdraft fees expecting money to be available that’s gone. Odds are very high you’re living paycheck to paycheck. Your Capital One secured card may have a limit as low as $200, and, across the industry, the typical secured card customer has only one credit card. If that happens, how are you supposed to buy groceries, bus fare, or diapers?

What’s known as Regulation E requires the bank credit your account within 10 days of when you notify them about fraud, unless further investigation is needed: a Capital One spokesperson told me they try to resolve most cases well under that limit, and said they refund any overdraft fees they determined occurred because of the fraud, whether it was the fraudulent transaction or a subsequent legitimate transaction took the account to a below $0 balance.

Everything depends on how quickly the customer notices something was wrong, how comfortable she is advocating for herself, and how equipped she is to go up to 10 days with nothing in the bank. Nearly 40 percent of Americans couldn’t cover a $400 emergency expense without borrowing money, even without having their checking account drained unexpectedly by fraud, and the typical secured card customer has no other credit cards.

Now, it’s completely possible that no actual fraud will occur as a result of the Capital One breach: in a statement, Capital One said that, based on the analysis they’ve done so far, they consider it “unlikely that the information was used for fraud or disseminated by this individual.” If they’re wrong, the consequences for secured card customers will be severe.

In this moment of crisis, it’s worth taking a step back to ask a broader question: are secured cards more helpful or more harmful to the low-credit score consumers they’re designed to serve? These products are often touted as a way to help people improve their credit scores, but there is weak evidence that they work for the typical customer. Santucci’s research shows that the median customer with a secured card sees only a 11-point increase in their FICO after two years, a number that’s dragged down by the 20 percent of customers who close or default on their cards within 24 months. 11 points is not a particularly impressive increase, especially given that if you wait and do nothing other than paying any existing bills on time, your low credit score typically goes up on its own as negative information on your credit report ages off.

Banks can tout that secured cards are free for customers who pay their bills in full every month, but the three-quarters of customers who carry a revolving balance are paying a high price for the privilege of borrowing against their own money, and would arguably be better off using their security deposit as an emergency fund. I’m sympathetic to what can feel like a double-bind to the banks: given that you need to charge higher prices to low-income customers to break even, is it better to be accused of ignoring them, or is better to be accused of exploiting them? If companies like Capital One can’t find better ways of serving low-income Americans, it won’t just be a breach of data: it will a breach of trust.

But when my manager was giving me paperwork and collecting my forms of identification, I realized this job would be yet another situation where not having a bank account would be a problem.

Tedeschi Food Shops didn’t offer paper checks as a form of my payment, like my other jobs tutoring and grooming dogs had. There were two options: Sign up for direct deposit with a bank account, or have your paycheck put on a payroll debit card, which would charge me a fee of around $5 for every ATM transaction. The use of payroll cards is on the rise, particularly among freelancers and independent contractors. In 2016, 8.7 million people received payroll cards, compared to just 5.5 million employees receiving paper checks.

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I was part of the 8.4 million households who are unbanked in the U.S. as of 2017, according to a Federal Deposit Insurance Corporation survey. I didn’t have an account because of former credit and account issues, like 14 percent of unbanked people; when I was 17, my dad and I purposefully overdrew my bank account by about $400 to cover basic necessities when he lost his job for a few months. We both thought we’d be able to pay it back fairly quickly, but we couldn’t, and my account closed.

People who are unbanked (or underbanked, meaning they have some access to financial services, but not everything they need) spend an average of 10 percent of their annual income just to access basic services like check cashing or credit. I had so little already, with barely any cash saved and an hourly job that paid Massachusetts minimum wage ($8 per hour at the time). I couldn’t afford to lose a portion of my paychecks to ATM fees.

Instead, I built up the nerve to talk to my girlfriend of four years and ask her if she’d let me use her bank account to get paid.

Like many people who grow up poor, my relationship to money impacted all my other relationships. I didn’t want to be financially dependent on my girlfriend. I wanted us to be able to make the decision to share our finances someday when we lived together and both felt we were ready. But I also didn’t have many other options; my dad had been without a bank account for longer than I had, and he was my main support system after my mom passed away.

My girlfriend said yes, and I put her account details down on my direct deposit form. I started picturing how I would feel when I got the money out of the ATM after being paid the following week. It was more money and more hours than I’d made at my on-campus tutoring job. I just wished that finances didn’t have to complicate my relationship all the time. I wanted to save up to take my girlfriend to Provincetown for her birthday that summer, but I didn’t want to share every single detail of my financial situation with her yet.

Sharing a bank account required an immense level of trust. I was putting all the money I was making into her account and relying on her to take it out of the ATM and give it to me. She had access to find out exactly how much I was making per paycheck and if I decided to make an online purchase with her permission, she could see every detail in her account statement.

It made me feel extremely vulnerable. I scrutinized a lot of my own purchases — would buying this make me seem irresponsible? Then I scrutinized my relationship — what if she no longer wanted to be in a relationship because she realized what a burden it was to date someone who was poor? What if I never climbed out of poverty like I hoped I would after college, and I had to rely on her and her bank account for the rest of our lives?

And then, a few weeks after I started at Tedeschi, my girlfriend also got a job there. We both needed summer jobs to save between our junior and senior years of college, and it was the perfect fit for her, within walking distance of her house. The day she went in for her training, she got frustrating news: Because her bank account was already attached to my direct deposit, she couldn’t get paid the same way. She had to use a payroll debit card and lose the $5 every time she took her paycheck out of the ATM. We talked about seeing if I could switch and let her use her own account to get paid, but she said it seemed like more trouble than it was worth.

She was essentially being punished for doing me a favor.

All relationships have their challenges, but I felt the strain of our socioeconomic differences. There was a power dynamic underlying every interaction. I felt like I had to be the “perfect” poor person: I couldn’t make any reckless decisions, couldn’t spend my income on anything frivolous, had to work as hard as humanly possible to get over the poverty line. My girlfriend never made me feel lesser because my family had less money, but I felt it all the same.

When you’re poor, all your relationships are strained by your lack of money. I’d felt it in moments where my best friend had to drive me to Walmart when my dad and I didn’t have a car so I could get school supplies. Or when my friend printed my high school papers for me because we didn’t have a printer. When I had to turn down opportunities to go out with my friends because I knew I couldn’t afford dinner and a movie. When all my friends had brand new decked-out dorm rooms and mine was decorated in hand-me-downs and DIY collages I made for less than $10.

At the end of that summer, my girlfriend and I took our trip to Provincetown. We both took work off for the long weekend and headed out in my green Buick. The hotel I’d booked as a birthday gift to her was one of the cheapest I could find that was three stars or more, and it was squarely in between all the things we wanted to do on our trip.

On our way to the hotel, we stopped at a bank branch to deposit some money into my girlfriend’s account to use during our trip. A bank associate asked me if I wanted to open my own account. I told her I thought I wouldn’t be able to because of past account issues and she encouraged me to apply anyway.

After 15 minutes, I learned I was approved. It could have been because I’d been building credit with a Discover credit card for several months, because I paid my Sprint phone bill on time, or because I’d been under 18 when I overdrew my checking account. I wasn’t sure but didn’t question why the bank was allowing me to open a new account; I’d rarely had good fortune when it came to finances and I didn’t want to jinx what was a step in the right direction. After four years, I was able to open my own account again. I could buy gifts online for my girlfriend as a surprise without worrying she’d see the cost on her statement. I could make financial decisions that were visible only to me without worrying how they might impact someone else’s life.

I could have control over my own money: How I kept it, how I spent it, where it went.

But like a hydra that just keeps regenerating, payday lenders often spring back when states try to rein them in. Take Ohio, for example. After 64 percent of Ohio voters—and a majority in 87 of the Buckeye State’s 88 counties—voted to ban payday lending in 2008, lenders just rechartered themselves as mortgage lenders under state law, despite not making any home loans. And after payday loans were banned in Arizona, lenders switched over to making pricey car title loans. This struggle to regulate lenders at the state level is one of many reasons why the federal Consumer Financial Protection Bureau (CFPB) is working on a proposed rule to curb payday loan abuses.

Unfortunately, some members of Congress from Florida are defending lenders in their race to the bottom. Last year, the entire Florida Congressional delegation, with the exception of Rep. Thomas Rooney (R-FL), sent a letter to the CFPB’s Director Cordray arguing that new rules are unnecessary because Florida’s regulations are “among the most progressive and effective in the nation.” Recently, they went one step further, when twelve Floridians in Congress—seven Republicans and five Democrats—sponsored the so-called Consumer Protection and Choice Act. This bill would block CFPB’s actions for two years.  It would also exempt states from having to adhere to the new CFPB rule if they model their own laws on the Florida regulations. Ten other members co-sponsored the bill, including two Ohioans who apparently missed the results of their state’s 2008 referendum.

If Florida were indeed a model state on regulating abusive lending practices, this legislation might make sense. New York, for example, has a 25 percent interest rate cap, and state officials have also aggressively pursued lenders that try to skirt the law by making illegal loans over the Internet. Indeed, 14 states and the District of Columbia have similar rate caps that protect consumers from dangerous loans. The Pentagon is also a model: under the Military Lending Act, loans to servicemembers and their families are capped at 36 percent annually. But Florida’s annual interest rates average 360 percent, and payday lending drains an estimated $76 million a year from the state’s economy. That’s hardly “progressive and effective,” nor is it a model we should aspire to replicate nationwide.

Indeed, the Florida regulations that some in Congress want other states to follow, such as a 24-hour cooling-off period prior to taking out another loan, by and large don’t work. 85 percent of Florida borrowers take out seven or more loans a year, and almost two-thirds take out at least a dozen loans. That suggests a product that makes financial distress worse, not better. In the words of one Florida borrower from Daytona Beach, “I would take out a payday loan for emergencies and it would take me an entire year to pay it back. I would have to juggle all my other bills, causing more problems than I had in the beginning.”

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While the CFPB’s proposed rule is yet to be announced, it will undoubtedly go farther than states like Florida in stopping these kinds of debt traps. It should require lenders to determine whether the borrower is actually able to pay back the loan—a common-sense approach that can stop financial problems from cascading down the line. And it should ban a lending practice that amounts to legalized pickpocketing: repeated automatic withdrawals from a borrower’s bank account as soon as funds are available, even if the borrower has more important bills to pay. These actions would make it harder to exploit vulnerable borrowers and also complement states’ authority to cap interest rates.

Americans want something done about the payday lenders that are taking money out of the community and causing great financial distress. In fact, every time the issue has gone to the polls—in Ohio and Arizona in 2008, and Montana in 2010—responsible credit has won. It’s time for members of Congress to listen to the will of the people and make it harder for their vulnerable constituents to get ripped off.

“Every man, woman and child with a disability can now pass through once closed doors into a bright new era of equality, independence, and freedom,” said the President, giving voice to the hopes and expectations of millions of Americans with disabilities.

Twenty-five years later, as we celebrate this milestone and the significant progress we have made in creating a more accessible and inclusive nation, we must also pause to recognize the barriers that still exist and how much further we still have to go.

One of the central promises of the ADA was “to advance economic self-sufficiency” for Americans with disabilities. Yet 25 years after passage of the legislation, people with disabilities are more than twice as likely to live in poverty, and just 31 percent of working age Americans with disabilities participate in the workforce, as compared to more than 80 percent of nondisabled Americans.

Furthermore, many individuals with disabilities remain outside the economic mainstream. Two recent reports by National Disability Institute using survey data collected by the FINRA Investor Education Foundation and the FDIC National Survey of Unbanked and Underbanked Households, provide a snapshot of the unique financial obstacles and challenges confronted by individuals with disabilities:

•  Almost one in two households headed by working-age persons with disabilities are unbanked or underbanked. Just 46.5 percent of households headed by working age persons with disabilities have a savings account, compared to 72.5 percent of households headed by persons without disabilities.

•  Only 18 percent of people with disabilities have determined their retirement savings needs, as compared to nearly 50 percent of people without disabilities.

•  Among households headed by working-age persons with disabilities, nearly one-fifth are unbanked (18.4 percent) and more than one-fourth are underbanked (28.1 percent).

•  Households headed by working-age persons with disabilities are significantly more likely to report using costly alternative financial services—such as payday loans—than households headed by those without disabilities (46.7 percent vs. 35.1 percent, respectively).

These data demonstrate that disability and poverty still go hand in hand, and that people with disabilities are too frequently outside of the economic mainstream, challenged to identify a pathway to a better economic future.

The time to focus efforts toward the economic inclusion of persons with disabilities is now. Multiple new federal policies are paving the way for individuals with disabilities to enter the economic mainstream. For example, ABLE accounts—created through bipartisan legislation enacted last year—offer a new type of tax-advantaged savings account that allows certain people with disabilities to save and plan for short- and longer-term needs, such as education, employment, transportation, housing, technology, and health care. Importantly, money saved in an ABLE account is not counted as an asset for purposes of determining whether someone qualifies for federally-funded public benefits, including Supplemental Security Income (SSI), Medicaid, subsidized housing and food assistance. ABLE accounts in essence serve as a down payment on freedom—improving an individual’s ability to save, increase their independence, and forge a pathway out of poverty.

Given that nearly one in two households headed by working age persons with disabilities are unbanked or underbanked, establishing a mainstream banking relationship will make a significant difference for millions of Americans with disabilities and their families. Mainstream banking offers access to the same safe, secure, federally-insured accounts that the majority of Americans utilize for their everyday financial needs. These financial services are less costly, more secure, and create a better foundation for acquiring and maintaining assets than alternative financial service options like check cashing stores, pawn shops, and payday loans.

We look to America’s financial institutions to focus on access—helping consumers enter the banking system; sustainability—keeping consumers in the banking system; and growth—deepening banking relationships in order to improve the banking status and financial behaviors of adults with disabilities. With FDIC leadership, we are optimistic that our nation’s youth and adults with disabilities can build their trust and confidence with a mainstream bank in their community that invests in a long-term customer relationship. In partnership with both the public and private sectors, the National Disability Institute will continue to highlight the challenges and opportunities of engaging the disability community to expand the inclusiveness of the banking system.

Our current priorities for promoting economic inclusion and financial empowerment include: expanding the Earned Income Tax Credit (EITC) to lower the eligibility age and improve the credit’s value for workers without dependent children; reforming Social Security’s rules to allow a gradual reduction of benefits for working Social Security Disability Insurance (SSDI) beneficiaries; modernizing the outdated SSI asset limits, currently set at just $2,000 for an individual and $3,000 for a couple; and enhancing the ABLE Act to reach more individuals with disabilities and to increase the annual contribution limits on ABLE accounts.

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As we celebrate the 25^th Anniversary of the ADA we acknowledge the strides that our nation has made towards full inclusion. Meanwhile, we must acknowledge the millions of Americans with disabilities still left on the outside looking in. And we must continue our work until the full promise of the ADA is realized.

To quote Bob Williams, a distinguished activist, policymaker, and public servant, “The ADA stands for the proposition that the American Dream must be accessible to all and within reach of those who seek it and are willing to work violently hard to achieve their slice of it. It equips us with the opportunity, tools and obligation to make good on this principle. The rest is up to us.”

Authors’ Note: The National Disability Institute has published two groundbreaking reports, Banking Status and Financial Behaviors of Adults with Disabilities (PDF) and Financial Capability of Adults with Disabilities (PDF), using national survey data to examine the state of financial inclusion for Americans with disabilities.

 “Front-line staff won’t take on a formerly incarcerated person’s debt; that’s outside their job description.” – program manager

 “Job developers can’t be expected to have the skills to take on jobseekers’ banking relationships.” – executive director

We often hear service providers suggest that people in crisis can’t afford to focus on their personal finances—that building financial security only makes sense after a person’s basic survival needs have been met. Many community-based organizations also say that financial empowerment is beyond the scope of what they can or should do.

These assumptions are not only outdated, they’re counterproductive.

Nearly 25 years ago, Dr. Michael Sherraden proved wrong those who doubted that poor people could save. His book Assets and the Poor, in which he called for Individual Development Accounts (IDAs)—matched savings accounts that would help low-income families build assets—went on to become a seminal body of work. It gave birth to a field and a new way of thinking about how to fight poverty. It also reminded us that a strengths-based approach to human and social services—one focusing on future outcomes and an individual’s self-determination and strengths—is not only empowering, it also produces results.

The Financial Clinic’s “New Ground Initiative” builds on Dr. Sherraden’s work by taking a broader look at how we think about financial empowerment. For many people struggling on the brink, financial security is about much more than home ownership or retirement planning; it requires tackling complicated challenges not often viewed as “financial”—such as barriers to rejoining one’s community after incarceration.

The New Ground Initiative seeks to increase the capacity of re‐entry programs—which serve individuals returning to their communities after incarceration—to address barriers to financial security. Formerly incarcerated individuals face many significant obstacles to economic security—such as barriers to employment, housing, public assistance, and education and training. Many of these barriers are the result of “collateral consequences”—penalties embedded in public policy that prevent people with criminal records from accessing basics such as a job, an apartment, or vital public assistance programs such as food stamps.

The New Ground Initiative trains re-entry service providers on how to tackle these and other financial obstacles. These efforts have created powerful and inspiring achievements in the areas of employment, housing, and education.

For example, after returning home from incarceration, John (name changed) was worried about starting work and opening a bank account; he was afraid that his child support arrears would cause his new wages to be garnished. He is far from alone—unaffordable child support obligations are a major driver of post-incarceration debt. In fact, many formerly incarcerated individuals are released only to find that their child support debts have accumulated into the tens of thousands of dollars while they were behind bars. However, because of the training he did with New Ground, a job developer was able to help John modify his child support order to an affordable amount and then helped him open a bank account. The job developer also helped John set up direct deposit on his first day of work.

New Ground has also enabled re-entry programs to help their clients’ access housing opportunities. For example, Sarah was having trouble securing an apartment after returning home from incarceration. She had her credit report pulled by a re-entry service provider and they found that she was a victim of identity theft. The program referred Sarah to a financial coach, who was able to support her in getting the fraudulent debt removed, which in turn enabled her to rent an apartment.

Another re-entry program—focused on helping people achieve their educational goals after exiting jail or prison—reported that training with New Ground was fundamental to the program’s ability to help participants negotiate old student loan debt. Lowering monthly student loan payments allowed these individuals to make ends meet and return to school.

These successes confirm the Clinic’s model that strategies to build financial security in turn reduce barriers to basic needs. They also demonstrate that projects like the New Ground Initiative can help programs that serve justice-involved individuals achieve even better results.

You can stay informed about the Financial Clinic and help spread the word about its services by signing up here.