Federal Policies and Programs

The Office of Refugee Resettlement has been the second largest funder of IDAs in the country (approximately $65 million over the past five years). However, because of program budget cuts, no new IDA Program Announcement was issued for FY 2004 and several IDA projects are ending.

The USDA also has a loan guarantee program for families with incomes of up to 115 percent of area median income. This program guarantees loans made by private lenders and protects against default risk. These guaranteed loans can be used to build, repair, or renovate a home, relocate a home, or purchase and prepare a site for a new home.

In 1999, the CRA was revised by the Gramm Leach Bliley Act (P.L. 106-102). This Act changes the frequency of examinations for smaller banks from every two years to every four to five years. In addition, it requires that all banks in a financial holding company have satisfactory CRA ratings before the financial holding company can be certified and engage in the new financial activities. Further, this new law states that community groups must disclose any agreements with banks that… more

The 1996 amendments require that consumers be notified when turned down because of their credit score. In addition, consumer disputes regarding the accuracy of their credit report must be investigated within a certain timeframe.

Under the 2003 law, consumers are now entitled to one free credit report per year. The new law also creates a variety of new financial education initiatives, to be carried out by a Financial Literacy and Education Commission. This commission is charged with improving financial literacy materials… more

Since IRAs were first created by the 1974 Employee Retirement Income Security Act (ERISA), many variations of this basic retirement savings vehicle have been developed. Employers with 100 or less employees have the option of opening Simplified Employee Pension (SEP) IRAs or Savings Incentive Match Plans for Employees (SIMPLE) IRAs for their employees. These accounts are attractive to employers because they have far fewer administrative burdens than other employer-sponsored retirement plans. The employer and their employees can contribute up to… more

During 2003, an employee cannot elect to defer more than $12,000 for all 401(k) plans in which the employee participates. This limit will increase by $1,000 annually until 2006 when the limit for total contributions will be $15,000. Employees age 50 and over can contribute an additional $2,000 in 2003 (also increasing in $1,000 increments until 2006) to help bolster their retirement savings.

Small businesses with 100 employees or less can offer other forms of 401(k)s to their employees, such as… more

This form of retirement savings is governed by the 1974 Employee Retirement Income Security Act (ERISA) and has been granted additional tax benefits since its initial implementation. Currently, businesses operating ESOPs must include all employees in the plan that are over age 21 and work more than 1,000 hours a year. Similar to 401(k)s, earnings grow on a tax-deferred basis and may not be withdrawn without penalty until age 59

To help EITC-eligible individuals get the credit without having to pay tax preparation fees to commercial tax preparers, the IRS has created an outreach initiative called SPEC (Stakeholder Partnerships, Education, and Communication), which partners with national and local organizations that serve EITC-eligible populations. Together with its community partners, the IRS helps to provide tax awareness, free tax preparation assistance, and financial literacy through initiatives such as the Volunteer Income Tax Assistance (VITA) program or the Tax Counseling for the Elderly… more

The demonstration will be implemented in seven sites across Maine, Minnesota, and Pennsylvania, serving a minimum of 2,000 people. The program will be open to all prospective and current entrepreneurs, but will specifically target immigrants, low-income populations, and existing small businesses.

Due to limitations on income eligibility, the Lifetime Learning credit mainly supports middle and upper-middle class families. Families of four who have a dependent student and whose adjusted gross income is less than $17,500 and students who are single with independent status who make less than $6,800 will not receive any benefits from the Lifetime Learning Credit because it is non-refundable.

In the 2003-2004 school year, these grants totaled an estimated $760 million. In sum, 1.23 million students received an average grant award of $615.

Due to limitations on income eligibility, the HOPE credit mainly supports middle and upper-middle class families and individuals. Families of four who have a dependent student and whose adjusted gross income is less than $17,500 and students who are single with independent status who make less than $6,800 will not receive any benefits from the HOPE credit because it is non-refundable. Low-income families who do owe small amounts of federal income tax can get the Hope credit to cancel out… more