The 2013 Assets & Opportunity Scorecard defines these residents as “liquid asset poor,” which means they lack adequate savings to cover basic expenses at the federal poverty level for just three months if they suffer a loss of stable income. Included in this group are a majority of Ohio residents who live below the official income poverty line of $23,050 for a family of four, as well as many who would consider themselves middle class. Fully 27% of households earning between $51,013 and $83,136 per year have less than three months of savings ($5,762 for a family of four).

Without savings, these families have limited hope of building a more prosperous future for themselves or their children, including saving for college, buying a home or setting aside money for retirement.  

“In order to cope with the recession’s continued impact, these families have had to prioritize today’s expenses over tomorrow’s goals,” said Andrea Levere, president of CFED. She called the findings “particularly disturbing given the ongoing budget talks in Congress that will likely result in further reductions in the social safety net and other programs that help low- and moderate-income people get on the their feet and start planning and saving for a better future.”

Published annually, the Assets & Opportunity Scorecard offers the most comprehensive look available at Americans’ ability to save and build wealth, fend off poverty and create a more prosperous future. The Scorecard explores how well residents are faring in the 50 states and the District of Columbia and assesses policies that are helping residents build and protect assets across five issue areas: Financial Assets & Income, Businesses & Jobs, Housing & Homeownership, Health Care and Education.

Ohio ranks 36^th in the country overall in the ability of residents to achieve financial security. The Scorecard evaluates states across 53 measures within the five different issue areas. Ohio earns a “C” in Financial Assets & Income, due in part to it’s 37^th rank in borrowers 90+ days overdue, 39^th in Bankruptcy rate and 27^th in average credit card debt. The state ranks 34^th in the number of underbanked households, with 19% of households having a checking or savings account but still continuing to rely on alternative financial services. With ranks of 41^st and 40^th in two- and four-year college degree attainment, respectively, Ohio gets a “D” in Education. Ohio also performs poorly on measures of student debt, as 68% of college students graduate with an average debt of $28,683. Though Ohio also earns a “D” in Housing & Homeownership and ranks 43^rd for its foreclosure rate, the state ranks highly on measures of affordable homeownership: it ranks 14^th in housing cost burden and 13^th in the affordability of homes.

“Although there are signs of improvement in Ohio’s economy, with unemployment edging downward in recent months, this year’s Assets & Opportunity Scorecard paints a picture of a state – and a nation – that is struggling to achieve economic opportunity for all residents,” said Jennifer Brooks, director of state and local policy for CFED. 

To address these challenges, the Scorecard includes a dozen policy solutions that can help Ohio increase opportunity and promote financial well-being for all residents. To reduce income poverty, the high percentage of borrowers who are past due on debt payments and bankruptcy rates, Ohio should maximize earnings of low-income workers by adopting a refundable state Earned Income Tax Credit and making the Dependent Care Credit refundable. Ohio should also increasingly fund free tax preparation for low- and moderate-income households and seniors. To protect unbanked households from predatory financial products, Ohio should enact stronger consumer protection laws and close loopholes regulating payday lenders. To increase homeownership and reduce the foreclosure rate, Ohio should regulate mortgage servicers and allow local land banking to ensure strong management and redevelopment of foreclosed properties. Finally, to help families save and build assets, Ohio should create college and emergency savings accounts that are accessible and safe.

“To ensure that Ohio’s economy works for everyone, we need an infrastructure and set of policies that help build assets,” said David Rothstein, Project Director for Asset Building at Policy Matters Ohio, a lead organization in the Assets & Opportunity Network. “Compared to other states, we are not doing enough to help families save for their future.”

Nationally, the Scorecard data reveal the daunting reality facing far too many low- and moderate-income families as they struggle to move up the economic ladder. CFED found that 25 states saw increases in liquid asset poverty over findings reported in the 2012 Assets & Opportunity Scorecard. The report also found continuing racial gaps, with nearly 64% of households of color considered liquid asset poor compared with 34% of white households. Among the other key findings:

• Many households don’t have the basic tools to save for a rainy day, with nearly a third (30.8%) lacking a savings account and 8.2% with no mainstream financial account at all.
• For the second year in a row, more than half (56.4%) of consumers have subprime credit rates, meaning they do not qualify for short-term credit at “prime” rates, making them more likely to turn to high-cost payday, auto-title or installment loans.
• Two out of every three college graduates is leaving school with student loan debt, the average amount of which increased by $552.98 over last year’s Scorecard findings to $26,600.
• By the second quarter of 2012, the foreclosure rate had dropped to 4.27% – a decrease from a 2010 high of 4.6% but still above the pre-housing crash rate of 0.99% in 2006. The move by financial institutions to stop offering high-cost mortgages has been a mixed blessing for asset poor families. On the up side, they are no longer prey to abusive and unscrupulous lenders. On the down side, they are largely shut out of the mortgage market.

To read an analysis of key findings from the 2013 Assets & Opportunity Scorecard, click here. To access the complete Scorecard, visit http://assetsandopportunity.org/scorecard.

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CFED empowers low- and moderate-income households to build and preserve assets by advancing policies and programs that help them achieve the American Dream, including buying a home, pursuing higher education, starting a business and saving for the future. As a leading source for data about household financial security and policy solutions, CFED understands what families need to succeed. We promote programs on the ground and invest in social enterprises that create pathways to financial security and opportunity for millions of people. Established in 1979 as the Corporation for Enterprise Development, CFED works nationally and internationally through its offices in Washington, DC; Durham, North Carolina; and San Francisco, California.

To improve policies and programs that promote financial security and opportunity, CFED has created the nationwide Assets & Opportunity Network, which is comprised of more than 850 advocates, service providers, researchers, financial institutions and others representing 38 states. To learn more about the Assets & Opportunity Network, visit http://assetsandopportunity.org/network.

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