IDA Protection Act of 2010

Floor Speech

* Ms. LINDA T. SÁNCHEZ of California. Madam Speaker, today I am introducing the ``IDA Protection Act of 2010.'' This bill will help the Individual Development Account program weather a tough economic climate, so it can continue to help lower income Americans to go to college, buy a home, or start a small business.

* IDA accounts are designed to help low income individuals pull themselves out of poverty and learn how to manage their family's finances. Through a partnership between local government, non-profits, and businesses, each dollar someone saves in an IDA account is matched at a one or even two to one ratio.

* To participate in this program, an individual must agree to take classes on financial literacy and agree to use the proceeds to buy a home, start a small business, or pay college tuition. Since the program's inception in 1999, more than 86,000 people have opened IDAs, many of them opening bank accounts for the first time. These individuals have sacrificed to save and thus, increased the standard of living for their family.

* Unfortunately, the recent recession has threatened the future of this important program. Congress annually appropriates $24 million for IDA Accounts, and local non-profits must find private sector matches in order to receive a portion of these federal funds. Since Wall Street's meltdown shook our economy, the usual corporate partners have not maintained their traditional level of IDA donations, and as a result much of this $24 million for this year remains unspent.

* This bill would create a bridge for the IDA program to better times. It more than doubles the program's funding in 2011 and 2012 and waives the private match requirement during those two years. Private participation in the IDA program is important, and this bill is meant in no way to incentivize private business to take its money elsewhere.

* The sad reality though, is that private donors just aren't coming through right now. A number of states have eliminated or cut their IDA programs in response to this financial crisis. In California, the United Way of Los Angeles was recently forced to shutter its successful IDA program, and if Congress does not act now, more closures are sure to follow.

* Giving these low-income families a chance to pull themselves out of poverty will benefit us all. Their businesses will employ our neighbors; their children will be our doctors and lawyers. I urge my colleagues to support this important legislation.

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