 Thank you so much for coming. Welcome to the New America Foundation. I'm Pamela Chan. I'm a senior policy analyst here with the asset building program. And what our team does is we incubate policy ideas that enable low and moderate income families to save and build economically mobilizing assets. Today, we're here to talk about savings products and how they can be made better for lower-income consumers. We're going to do this by looking at five groundbreaking pilots as case studies. The asset building program's interest in savings product development started with the auto safe pilot, which was generously supported by the Rockefeller and Mott Foundations. And Carolyn will be giving us more details on this. What we found in trying to launch the pilot back in 2008 is that the right savings product wasn't quite available and giving the limited resources, information and time that we had, it was really difficult to formulate a new one. So, fortunately, fast forward to 2012 and we've got three experts here today that are working really hard to make this process easier for others. And they're looking deeply into the needs and preferences of lower-income consumers, which is largely ignored and experimenting to see how different channels and different innovative product features can be implemented in market. First, I'll spend a few minutes introducing each of our speakers and give them a chance to tell you about their work. Then we'll have a discussion about the pilot experiences and share lessons learned. And then finally, we'll open up the floor to questions and this event is being webcasted live. So for anyone watching online, please send your questions via Twitter using hashtag SP innovation. So let's start with Sherri Rine. She is a senior economist with the Federal Deposit Insurance Corporation. To save time, I won't go through all of our speakers' accomplishments. It's available on the event handout you received. But as many of you know, the FDIC has been crucial in making financial inclusion a national priority. So Sherri, why don't you tell us about your work? The safe accounts in particular. You scared me there for a moment. I don't want to put anybody to sleep. I do want to take an opportunity to thank the New America Foundation for this opportunity to talk about the FDIC's model safe accounts pilot. I'd like to also take just a moment to introduce to you two of my colleagues who are very important to this project and others that we do in research at the FDIC. I have Susan Burhouse, who is the co-author to the final report that we have on the safe accounts. And we have Massey Tahari, who is our research intern, and we very much appreciate his efforts to keep us afloat. Alright, so let me tell you about the safe accounts pilot. It started in January of 2011 and went through the end of December 31st of that same year. We worked with nine financial institutions to determine whether we could develop these safe accounts that were low cost. Whether or not they could be feasible for the banks to use to bring unbanked and underbanked consumers into the financial mainstream. So we worked with them. The pilot banks were asked to follow our FDIC model safe accounts template. Now this template really has the goal of setting up accounts, both transaction and savings, so that they are safe and low cost. So for example, let me give you just a few of the features of the safe accounts on the template. So first and foremost, these accounts are electronic card-based accounts. So as you can imagine, the cost then is substantially lower if you think about a traditional paper check account. So we had that, we also had that these accounts do not allow for NSF or overdraft fees. That was very important. And so in terms of opening and maintaining accounts, we tried to keep the cost low. So that for transaction accounts, you could open the account between 10 and $25. And there was a up to $3 maintenance fee on these transaction accounts. Now, with close to our hearts, of course, for today is the savings accounts. There you could open the savings accounts for $5 and if you needed to maintain a $5 balance across the board. So that is very low cost. It's safe, right? We've got deposit accounts. So that's what they were working with. So just quickly, the highlights of the findings from this one-year pilot. First and foremost is that these accounts were doable. Pilot institutions told us that the performance on these accounts really was on par with, if not better, than their other deposit accounts. Similarly, these accounts were low in cost. So the bottom line, because I'm giving you my notice here, the bottom line to this is that it was really important that we offer transaction savings accounts to lower income folks so they could come into the financial mainstream. It was very successful in bringing in not only those who are unbanked who had never had an account before, but in fact those who were re-entering the financial mainstream. So we can talk more later. Wonderful. Thank you so much. Next we have Carolyn Schultz, who is a research associate with MDRC, a leading social policy research organization. And they've been the lead evaluator in two pilots, Autosave and SafeUSA. Carolyn, can you give us an overview of both? Sure. So these are two separate projects, but they both focused on unrestricted savings accounts. So encouraging people to deposit money into accounts that they can gain access to at any time as opposed to say retirement savings, which is locked up in a sense that you have penalties if you take the money out early. In addition, both of these projects, and I'll talk about them separately in a moment, both of these projects use the technology of direct deposit in order to make the deposits as opposed to relying on an individual going to a bank, for example, and putting the money into an account there. The first project I'm going to talk about is called Autosave, and as Pam mentioned, this is a pilot that we've conducted over the past few years in a small number of employers around the country. These are diverse employers, so for-profit, non-profit, and government agencies. Autosave is based in the workplace, and the way it works is that each participant in Autosave signs an agreement with their employer to deposit a small portion of each paycheck into their Autosave account using direct deposit. So once the sign-up is done, initially every deposit is automatic as long as the individual stays employed at that employer. Sign-up is also at the workplace, and as I mentioned, this is another way that people can avoid having to walk into a bank in order to begin saving. The accounts, we negotiated the terms of the accounts, so building on what Sherry's told you, we looked for accounts that had no monthly fee. The condition was that the regular automatic deposits came in with each payroll. The financial institutions that we worked with agreed to waive the fee as long as the deposits kept coming in each payday. And there was no minimum opening deposit other than the initial dollar amount that would be from the first paycheck, and typically these were around $25. We've had about 300 people come forward in seven workplaces who agreed to, who said, yes, I'd like to participate in this project, so it's a very small-scale project focused on testing the feasibility of the idea. And the good news is the idea is feasible. Let me shift gears for a moment and talk about SaveUSA. SaveUSA is a separate project, and instead of being conducted in the workplace, SaveUSA is initiated in volunteer income tax assistance sites. What these are is locations throughout communities around the country. This project is being implemented in four cities, New York, Newark, San Antonio, and Tulsa. And these are locations typically run by nonprofit organizations where people from, people typically earning below $50,000, about $50,000 a year can come and get their taxes prepared for free. SaveUSA was built upon an earlier pilot that some of you may have heard of called SaveNYC, which was implemented in New York City previously. The purpose of SaveUSA is to replicate the SaveNYC pilot and also to conduct a study of the impacts of the program. And I'll talk about that a little bit in a moment. Just as I was explaining earlier that AutoSave uses payroll deposits in order to fund the account, SaveUSA uses another source of direct deposit, and that's the tax refund that people receive after they file their taxes and they receive a tax refund either from the IRS or from their State Department of Revenue. It also is focused not on these little regular deposits, the way AutoSave is, but on kind of one big deposit. And the reason is that it's, if you think about it, tax time is one of the times of year when many people, especially lower income working people, receive a lump sum, kind of a windfall. And so the idea of the SaveUSA project is to take advantage of that lump sum payment and direct a portion of it into saving. So let's see. People can deposit a portion of their tax refund using SaveUSA into a special SaveUSA account. They have to deposit at least $200. They can deposit a maximum of $1,000. Actually they can deposit more than that, but the $1,000 cap is important because after the deposit is made by the IRS or the State, if people leave the money in the account for about a year and they don't touch that initial deposit, they'll earn a 50% match on that dollar amount between $200 and $1,000. 2011 was the first year that we operated the scaled up version of the project in these four cities. 1,500 accounts were funded. Of these, 73% of those who did receive those deposits from their tax refund, 73% earned the match payment, the 50% match payment. And among those, the average final balance was $900 in the account, including both the initial deposit and the match payment. And as I mentioned, my organization, MDRC, is conducting a randomized control trial in New York City and Tulsa to study the effects of the program. And I can elaborate a little more later on that. Thank you. And so our third speaker, Sarka Abhi from the DTD Fund, she is the Director of Ideation. And DTD is one of the most creative organizations in the field of savings and financial opportunity. And so Sarka, you have two projects that you've been working on, Save to Win and the Rainy Day Reserve pocket with a prepaid card. Can you tell us more about those? Sure. Thanks, Pamela. So Save to Win was launched in 2009, and it was based off of a few different insights that we had seen. One was consumers want to save. We want to help consumers save, but savings is mundane. It's not exciting. There's nothing gratifying or immediately gratifying about it. And so we wanted to think about how can we make saving fun for consumers to help them engage in that act. Two was private savings programs, which link the chance to win based on savings activity, have been offered internationally and shown to be successful. And three, we know that consumers like Games of Chance, and we see that in lottery play in the United States. So taking those three insights, the Save to Win program was launched in Michigan in 2009 with the Michigan Credit Union League and eight credit unions. And it was designed as a balanced building CD, wanting to give all consumers access to the product, but also be able to help them think not just about short term, but potentially long term savings too. Consumers needed just $25 to open the account, and every $25 earns a consumer a chance to win, both monthly prizes and a grand prize drawing. And the consumer has up to 10 chances to win every month, and it was designed that way so that everyone had equal chances to win, and not only individuals who could actually deposit a lot in a month. And so the program launched in Michigan 2009, switching over to the work that we've done around rainy day reserve fund on a prepaid card. So that was designed with a few different insights, one being that there's a need to help consumers save for emergencies, and a need for innovation in that space because a lot of consumers have difficulty saving for emergencies, lack emergency savings. There's an opportunity on a prepaid card where consumers are budgeting and managing their cash flow, but don't have an opportunity to save with that prepaid card. And three, we know an emergency hits that different consumers need access to those funds at different times, and having it on a card makes it accessible when that emergency hits. So we worked with Plastic, which is a prepaid card provider, and designed a rainy day reserve on their card. And the rainy day reserve, the features of it are there's no minimum to deposit, there's no minimum balance, it's really up to the consumer to put in the rainy day reserve pocket however much they want to. There's features of both automated savings, so a consumer can sign up to auto-save a certain amount at a frequency of their choice, or they can manually save knowing that there's times of the year such as tax time where large lump sums come in and they want to have that decision to manually save. And it was also designed with a withdrawal reminder, so a pop-up message that shows up when a consumer goes to withdraw to really remind them of why they're saving and try to deter them from withdrawing unless it's for an emergent need. Sir, I'm going to stay with you just for another minute. You mentioned that you did a lot of research to learn about the consumers that you were targeting. Can you tell us how you defined your targeted consumers and what was the process of learning about them? Sure. In general, the work that we do at D2D, our focus is on low to moderate income consumers, really defined as households with incomes under 60,000. And then in general, we're looking at more financially vulnerable consumers, so consumers that aren't saving regularly, consumers that are asset poor, which we define as under 5000 in assets excluding your mortgage. And a lot of different classes are financially vulnerable, but those are kind of the three main categories. What saved to win, we had done some preliminary work with a credit union in Indiana to really be able to understand if this is something that's of interest. Is this going to be demanded by consumers here? And we also did a survey of consumers through that credit union to really understand if this is a product that consumers would be interested in. And then we've also just seen a lot of international work in this space that shows that there is demand for this type of product. We don't know if that demand exists in the United States, but we knew that it was international. With the work with Plastique, we actually did a national survey of 600 consumers, low to moderate income, to really try to understand what are the gaps that exist around emergency savings. How are consumers managing emergencies when they don't have savings. And really try to get some insight on what type of product features would help consumers save for emergencies, and we applied that to the design of that product. Sherry, since you had nine different sites, what were some of the things different banks did to learn about their target? You think about this, you think about a supply-side approach, right? So we've got banks who are willing to offer these transaction and savings accounts. And I can say that in general what they were looking for was a product that they could offer unbanked consumers or consumers who might be banked, but this product would be a better fit for them because of income constraints and liquidity constraints. So even though our banks had different asset sizes and were in different parts of the country, they all approached this as a way for them to reach out to their footprint, right, to their consumers, and try to help bring them the access, the offering of these financial products. Great. And Carolyn, I know that it was different for both SaveUSA and AutoSave, how you approached learning about those target markets. If you could share about each of those, and then especially I think for AutoSave, there wasn't as much opportunity to do primary research. So what were some of the ways that you were able to learn about the consumers through secondary research? Sure. So in both of these projects, we were looking at people who had earned income, right, because one is based in the tax system and one is based in the workplace. And in both cases, we were primarily interested in low- to moderate-income people. In the case of AutoSave, because it's a workplace-based program, we and the employers who participated in the pilot wanted it to be available to all employees regardless of income. When we looked for employers to participate in the project, we didn't have hard guidelines. Generally though, we were asking for employers who had at least about a third of their workforce earning less than $15 an hour. Some had many, many more, much higher proportion. In the AutoSave pilot, in some cases, we watched account activity over time so that we could understand how people were using the accounts. We also did some focus groups and several employers to better understand why people signed up, why people who didn't sign up didn't, and how they were using banks and other savings instruments currently and generally how they were handling their money. So we learned a little bit as well about their attitudes towards banks and credit unions and what methods they were already using to save. In the case of SaveUSA, there was a hard-income guideline for the project. So people who had dependents and were filing as a tax filer with dependents had a hard cap of $50,000 in their adjusted gross income per year. People filing without dependents had a cap of $25,000. In some sites, it was a little bit different because of local volunteer income tax assistance guidelines for income. For the original SaveNYC pilot that SaveUSA was based on, the New York City Office of Financial Empowerment did local research looking at the saving and banking and other financial management usage of New York City populations. In addition, as part of the SaveUSA impact study that my organization, MDRC, is working on, we've looked at the characteristics of participants in the programs. We know quite a bit about them now and we're going to learn more over the course of the next three years. Their average age is 41, two-thirds of them were filing with dependents, so this was largely reaching people, again, typically families with incomes under $50,000. The average adjusted gross income was quite a bit lower, so across all of the people who signed up for the project, the average adjusted gross income was only $18,000. They received on average large incomes, excuse me, large refunds. The average refund was $3,800 and an average of 1,500 of that came from the earned income tax credit, which is one of the ways that lower income, low to moderate income working people can be rewarded for work by receiving this refundable tax credit that goes into making a part of their tax refund, their federal refund. Then I just wanted to mention that when we looked at how much people decided to put into these special SaveUSA accounts, most of them, about two-thirds of them, either pledged the minimum of $200 or the maximum of $1,000. We have some high hypotheses about why people did that and what motivated them to begin to participate. Then, of course, in the city of New York, we know that this was an idea that had been around for a while and it may be that some of the people who pledged the maximum had had some time initially to think about this opportunity and how to use it. I'll leave it there. I think the research findings that Carolyn have are available publicly, right? Right now, we have no NBRC research findings yet about this project, and we will be, for those of you familiar with these kind of studies, it's going to be quite a while before we issue our reports, but the Office of Financial and Empowerment has produced a report. There's a link to it in the materials for this event and people can read about how the program was implemented and some of those first-year outcomes that I mentioned. And then, in addition, we're just, actually just yesterday, we started a large-scale follow-up survey of everyone who enrolled in the project in New York City and Tulsa. And this is really where we're going to be beginning to collect our findings on the effects of participating in the program. Everyone in New York City and Tulsa who came forward and was eligible for the program was randomly assigned into one of two groups. They were either offered the SaveUSA account and offered the opportunity to deposit, or they were assigned, again, at random, to a control group. And over time, we'll be following both of those groups to see if there are changes or differences between the two groups and things like assets and debt, overall money management strategies, and related things like health and employment. Definitely. And so I think one of the takeaways is, in terms of kind of learning about lower-income consumers, there are oftentimes past research that can provide insights to this consumer group. The FDIC has an underbank survey, which there's a lot of overlap between lower-income consumers as well as underbanked consumers. And then DTD has a wide variety of reports available kind of showing some of the survey research that they've done. And if I could add to that. So the household survey that you were talking about, which would be, we hope, very informative, the last one was done in 2009. This year, the next survey, the findings will be out. So do stay tuned because they will be out pretty soon. That's great. And so I want to talk more about what was appealing about your pilots to the people that actually took up the accounts. I guess we'll start with Sherry. What were some of the consumer feedback you got or reasons why people were interested in taking savings accounts? Yeah, I think for us, since we're supply side oriented, it really comes through the bank lens. But in action, we have really very nice retention rates on both the savings accounts and the transaction accounts. I don't know if you guys know this, but industry folks tell us that within one year of opening a deposit account, they will drop from that account 30% by 30%. So our retention rates were much better than that. We had 95% retention rates for savings and 81% for the transaction accounts. Though it is just the one year pilot, it's indicative of the fact that these accounts by these consumers are valued to them because they're holding them, they're keeping them. Did you get any feedback as to why their retention was so high? My, from our conversations with the bankers, is that this is a good match. This is the kind of products that they need to get started and they recognize that it's really important to them. For those who were individuals who were second chance individuals, those who were for whatever reason pulled outside of the financial mainstream, this was their opportunity to get back in. One example that the banks told us was, you know, these folks realize that it's not just a second chance, it's last chance. Great. So Carolyn, why don't you tell us about what some of the attractive features were. Let's start with auto-save and then talk about save USA. Okay. So this is based on limited focus group data and other feedback we've gotten from employees and employers. And we think that the relaxed requirements, kind of lowering the bar to actually open the account and begin to save, made a big difference. So, for example, people who had had banking history problems in the past typically were still allowed to open these accounts. And I should say that was true for the Save USA project as well. These accounts, as I mentioned earlier, had very low or no minimum opening balance requirements and no monthly fees. And they were basically very simple straightforward savings accounts. And then in addition, having the financial institution come to the workplace to introduce the account and process all of the paperwork, we think, made a difference. And then in terms of why did people want to use the account, it's the kind, you know, the range of responses we've received are all of the things you might imagine. Some people just wanted to be able to set aside a portion of each paycheck to use for whatever they wanted. Some people wanted to use it as their vacation fund. Some people wanted to save it for their kids, their grandkids to do special activities or the beginning of an education fund. Some people left the money in the account for a long time. Some people emptied it almost as often as the deposits went in and then an additional good group of them would make large withdrawals from time to time. And people responded positively to the way that the program was marketed, the way the account was marketed. So it tended to emphasize, you know, the lack of restrictions on the account, use it for whatever you want. And it also tended to emphasize this idea that, you know, that everyone sort of would like to begin saving, but oftentimes people just don't start because of inertia. And so, you know, just based on that kind of informal feedback, we think those were some of the most persuasive. Great. And were there any additional features out of the Save USA pilot that were attractive for those? Well, so I would say in the case of Save USA, you know, many of the same things, you know, low barrier to entry and the convenience of having and being able to open it at the tax site, but the chief attractor was this large match payment incentive that was offered. Again, that was a 50% match. This is Erica from your two projects. What were some of the attractive features? So it's safe to win. You know, we did consumer surveying to really just get a sense of what's attracting consumers to the product. And we know one of the strongest aspects is very similar to what Carolyn is saying is people like that there was a low entry and they only needed $25 to open that CD. We also know that consumers really liked the chance to win. And so those monthly prizes and the grand prize drawing was very attractive to consumers. And then the last point on Save to win was, you know, from the surveys we really learned that many of these consumers had never had a certificate of deposit. So even if they've had checking, they've had savings, they've never had this more long-term vehicle to save and being able to do that, but in a way that worked for them was really attractive. With the work with Plastic and the rainy day reserve, we're still collecting surveys. But what we're seeing is what's attractive to consumers is specifically the fact that many of them don't have access to traditional savings and many of them have not really been able to what they feel they haven't been able to save effectively in traditional savings. We're also learning that for many of them it was so easy to try that just being able to have it on their prepaid card, transfer that money and just try it out was something that was very attractive to them. And then the last point is that many of them have said they've never had a CD, never had a checking account, never had a savings account. And so this is really the first time being able to kind of access that in a more non-traditional way. Great. And so in just a second I want to start talking about the provider experience, but just to throw out one more question. Did you guys experience any aspects of your pilots that might have caused a level of rejection of the program? For the Safe Accounts pilot, I mentioned to you the parameters of it that had to be a card-based account. The other was that there could not be NSF or overdraft fees. That was a line in the sand for us. That was very important. It remains important to us. And there were some institutions who were interested in joining in the pilot, but once they heard about that particular feature or a set of features, they were unwilling to take it to the next level. That was a deal-breaker for some of the financial institutions. So currently I guess I'm thinking about auto-save and how sometimes there are some things related to the auto-save program specifically that cause some of the people at the workplace to say this is not a program that we want to be part of. Can you elaborate more on that? So again, we have limited feedback on that, but some of the things that people mentioned is just not feeling comfortable in general with banks and even credit unions sometimes. Because we were approaching people in the workplace, many of them already had existing arrangements for how they were managing their money and they didn't want to further complicate it by starting a new relationship with a designated financial institution for this particular project. I would say that in SaveUSA, the chief barrier that people named is that they already had plans for their tax refund, so people had anticipated that they would receive a refund again this year like they have in past years, and they'd already earmarked it. We do think that over time that may change as I suggested earlier as people become more familiar with the program. We just finished our second year of implementing SaveUSA. We're going to do it a third year, and so we're closely watching. You know, do people participate over and over again? Do the amounts that they deposit increase over time? And so on. Thank you, and I think that some of that feedback really helps to kind of build a case for building a more robust savings product market, both in terms of choosing different outlets, such as offering savings options on prepaid cards as well as in providing many different opportunities and ways to engage with consumers at different touchpoints. Sara, could you have anything else to add to that? No. And so, Chair, you already started talking about this, about the financial institutions that you partnered with. What were some of the motivations for joining the pilot? It was really exciting actually to talk to the financial institutions about the pilot. They recognized right away that this was an opportunity for them to better understand this market, that they could take these products to, you know, the advertising and the marketing to do the outreach and to see how they could actually attract these consumers. And so they were very excited and remained that way, knock on wood. They recognized that there was value to them in doing this. Great. Carolyn, what were some of the motivators for your financial institutions partners? So the chance to acquire new customers, including maybe some customers who already had some existing banking relationships. In both of these projects, these are very reliable sources of deposits. So if it's coming from a paycheck or if it's coming from a tax refund, we believe it reduced the perceived risk of financial institution. In some cases, I think this might be said of SaveUSA. They also saw it as a way to engage with the community and, you know, sort of a service and community development kind of focus. And I guess I would say I might add the one thing that they were reluctant about in the SaveUSA project because account activity data is used to calculate whether and how much a person will receive in the match payment incentive. There was a fairly, I would say, in some cases what a bank would have thought of as an onerous data sharing or reporting requirement in order to closely track those accounts over time. And, Sarika, what about in your experience? Yeah, what's safe to win? You know, I think for the credit unions, it was one, you know, it was very much mission fit. They have this interest in serving more financially vulnerable consumers and so they were excited about the potential of this product to do that. And two, I think it was an opportunity to just be very innovative. They saw this as something interesting, something new, something exciting to try and get to be a part of that process to help define it, help make it successful, help sell it to their members, potentially attract new members too. With the work that we've done with Plastique, you know, he similarly is really interested in serving more financially vulnerable unbanked, underbanked consumers and really interested in designing a card that allows someone to use it as kind of a one-stop shop for a lot of their financial transactions and financial needs. And he was very interested in potentially exploring a savings feature at the same time that we really wanted to pilot it and so the timing just worked out really well there. Great. So it sounds like, you know, the ability to attract new customers was a big selling feature in terms of getting financial institutions to offer these new accounts and then in terms of concerns that they might have had, the reporting requirements that, barriers that might have made it more difficult to service these accounts were problematic. I was just thinking about one other thing that came up with the financial institutions at the onset of participation. There was some concern on their part about risks related to mismanagement of accounts or potential fraud activity. And one of the real highlights, I think, of this particular pilot was that those concerns were really unfounded as it turned out and that was very helpful for the financial institutions to have gone through that process and to see that in fact that these folks are not fraud risk. They can manage their funds, especially if the turnoff is occurring. And so that was really important, I think. That's a nice point. The fact that the lower-income consumers that were targeted may have been perceived as a business risk, but in many ways you guys are finding that that's not necessarily the case. And so let's talk about some of the special features in these savings products. Each of you had aspects of the accounts where you really tried to build in features that would help build savings. So, Sarka, let's start with you what you've been talking about, especially some of the incentives that you built into Save to Win. Sure. So, again, Save to Win was designed as a balanced building CD. And so it was just as important to be able to get someone to take up the product as it was to ensure that consumers are engaged in continuing to save in the product. So, you know, it was designed with monthly drawings, both at credit union level but also at the league level to really engage people in that opportunity to win every month. So they're not just putting it in waiting for the grand prize, but every month they have 10 chances to win if they put in the 250 to deposit. So that was really the motivator. And what we saw is that as consumers were winning, they were becoming more engaged. And winners were saving more regularly than non-winners. So knowing that just having that chance to win is important, but then actually being able to win irrespective of the size. I mean, in year one, it was anything from $15 to $400 in a monthly winning. Someone who won $15 was just as likely to save regularly than someone who won $400. So having that winning was a huge motivator with Save to Win. And designing that product in that way is really key. With Plastique, we again wanted to structure it so that it was easy for people to save in a way that makes the most sense for them. So we structured it with both the ability to set up automated saving. So as money is coming in, you don't really have to think about transferring it into your savings feature. And then you don't have to really think what's sitting in that savings feature because it's automatically transferred in. So we designed it with that. And people could... It had an anchor in it which was set at $10 every month until you reached a goal of 1,000. And so people could just sign up and stick with that anchor that we put in. Or they could adjust it and change their goal and change their frequency and change their amount. And then we also set it up with manual. And the idea there was there's times of the years and we definitely saw Spike at tax time where consumers have more coming onto their card and want to capture more of that into savings. And so, Carolyn, what about some of the features in auto-save and save USA? I think I would just summarize it by saying two things. So one we've talked about is just reducing as much as possible the real and maybe some of the perceived unreal risks of opening an account. And then secondly, for save USA only, the power of that 50% match incentive I think was perhaps the most salient feature to people who signed up for the program. And I think if we were going to look at a future version of auto-save, we might look at in this kind of very accessible account what kind of incentive structure might be appropriate, what might employers feel comfortable. We know that there's a great deal of infrastructure on the retirement saving side in workplace saving. How do you think about that in a context where people can pull the money out at any time? So I think that's an open question. And so, both of you have talked a lot about features to get money into the account. But there's also the need to make sure that you're guarding from temptation to withdraw those accounts before they're actually needed. And then sometimes when people do need those accounts, they need them pretty instantaneously, as Serika mentioned earlier in their research. So how have you two kind of looked at that balance and made decisions on your products to balance those two problems? Yeah, so it's safe to win. We actually designed it with the opportunity for consumer to withdraw. And so there's one withdrawal that's allowed. There's a fee of $25 if one does withdraw. But we wanted to make sure that consumers had that option to take out the funds if they needed to within that year. If they... And they would still qualify for the drawings. If they needed to take out a second withdrawal, that's when they no longer qualified for the drawings. Because we didn't need to make sure that this was something consumers were going to hold on to. And that we wanted to make sure that it was fair. If you're holding onto your savings, you should have more of a chance to win than if you're taking it out. And we had some credit unions who, even if someone no longer qualified for the drawings, because they had to take out that second withdrawal, they could still keep that CD open. And consumers did still continue to use that CD. Because that was important, just having that balance-building CD is something that's not accessible to a lot of consumers. With the work with Plastique, we designed it with a pop-up message. And so, we... Again, we want consumers to be able to withdraw when they need to withdraw. Having it on a prepaid card makes it accessible in that way. But we wanted to just use it as a way to remind consumers as to why they're holding on to their savings and why they're saving. And so, when they go to withdraw, a pop-up message comes up and asks them, again, are you sure you want to withdraw? These funds are for an emergency and to help you build financial security. They can click yes or no. If they click yes, they withdraw. And if they click no, then they don't. And then the other thing is the way that it works with the prepaid card is that they can't actually access the funds when they go to use the prepaid card. It's sitting in a different pocket. And so, there's an extra step that's required to access it. You have to go online and transfer those funds online. Or there's a mobile app, and you have to go into the mobile app, go into your savings pocket and withdraw the funds. So, there's an additional step that's required, which I think also helps consumers hold on to it. Great. So, in the case of SaveUSA, obviously the greatest incentive is that people need, if they want to earn their match payment, they have to leave the funds, and they'll pause it untouched for about a year. But in addition, all of the accounts were built so that they had limited access. So, kind of trying to strike the right balance between people being able to go and withdraw their money if they really need it. There's no penalty if people took the money out early. But limiting the ways that they can do that. So, no ATM access, no online access, not linking it to other kinds of accounts for example, overdraft protection. In the case of Autosave, it was a little bit more open. People could set up whatever kind of access arrangements they wanted. But it was, you know, it was only subject to the standard, you know, six withdrawals per month for a defined savings account. I mentioned earlier that sometimes people were reluctant to establish a brand new banking relationship with an institution that had nothing to do with maybe their existing money management banks. We tried to sort of turn that into a selling point. We said, look, if your goal is really to leave this money untouched or to save it for a particular purpose, having it in a separate financial institution, a bank or a credit union might actually help you to meet that goal. But beyond that, we tried again to strike the right balance of saying, look, this is your money. This is coming out of your paycheck. You can use it however you want. Neither the bank nor the employer have anything to say about that. Sherry, do you have something to add? Yeah, as you know, the SAFE accounts savings account is really pretty standard, right? Very simple. Where we saw differences in how the banks actually implemented their programs. There were very different business models used among the different pilot institutions. So we had, for example, one institution who actually worked in partnership with a nonprofit, a microfinance organization, Grameen, I'm sure you know, in New York City. And it was very interesting that they were working with the small business owners. The idea was, of course, the lending. But to be a part of this program, they added the savings component. So it was higher volume of accounts, lower dollar amounts. But again, reiterating and echoing what we all know is that people can save. And so that was one of them. And another was a different platform. We had an internet bank who was offering savings accounts. And then you had those accounts where then it becomes a marketing issue. Are you trying to get the accounts open to the individual? Or are you reminding them as grandparents that they have grandchildren? Are there different marketing and advertising methods that were being used? I think that could help us, actually, as we go forward with trying to promote saving. So what do you think, if you were to give advice to someone on building a new savings product, what are some key features they should include? Jerry, sorry. Definitely automatic saving. What you guys are talking about, that's absolutely a good thing to do. It's just done. I think primarily making it easy for people to begin and lowering or minimizing the risk that small dollar savers will sort of watch their money get chipped away by fees associated with making withdrawals or saving too little or maintaining too low a balance. I'd say in addition to the features that we've talked about, I think one thing that's important is in a case where automated is not possible or there's opportunities to potentially capture more funds such as tax time, I think it's important to think about features such as reminders. So for a lot of consumers, having that reminder come up at that timely time when funds are coming in could be really crucial to helping them capture. But I also think that there's ways of thinking about really interesting features. We know the gifting message really resonates with consumers when it comes to savings and if there's a way to incorporate gifting into savings. So for instance, we know with prepaid cards, often families are sharing multiple cards and there's ways to think about how you can gift savings to someone else who's also a consumer of that prepaid card company. And then I also think that different ways of making it fun, surprising savings is one example of that, but really applying more rewards, more kind of gamification and making it more of an experience for consumers could be really interesting too. And in terms of beyond the organizations that we have on panel today, two other organizations that are good resources in terms of getting assistance and designing programs are CFSI, which is based in Chicago and CFED, which is based here in D.C. So I want to talk about the implications of the pilots. Pilots are very insightful as we've already learned today, but they're not always scalable or transferable to other situations. So can you talk about something about the implications of the scalability of your models? I can say if you... No, go ahead. So I think both auto-save and USA have the potential to be implemented on a very wide scale. Essentially, in save USA, anyone who has earned income and files their taxes could be involved in a larger scale version of this program. Likewise, in auto-save, anyone who is employed could take advantage of such a program. I think, you know, some of the areas that one would have to work on would be making it as fluid as possible to initiate that remote process. So whether it's opening a bank account in a workplace or designating a portion of a tax refund to be held as savings, making those things as streamlined as possible. I think we shouldn't discount the power and value and need for effective marketing and word of mouth. In a sense, it might be a circular answer. The more widespread these practices become, the more people would know about it, plan for it, and decide to take advantage of it. I would say in the auto-save pilot, we were struck by how much repeated marketing was really necessary to convince a critical number of people to sign up for it. So, you know, that work of really telling people about the product and explaining how it works and then just following through to get them to complete the sign-up with something that you wouldn't necessarily imagine an employer wanting to take on their own and maybe something that a financial institution would want to come and, as they have, come and do in a workplace. But I think there's a scalability question there as well. And then in terms of SaveUSA ramp up, I think, you know, some of the proposals for the Savers bonus that have been introduced in the past really focus on, okay, how could such a tax time-matched savings-type program be implemented on a wide scale, either through the tax code or other opportunities to designate, you know, savings every year, particularly for this population that, you know, doesn't have a lot of access to a lot of other kind of tax-based incentives and credits. Sarka, let's talk about... Sure. So, with the work with Plastique, you know, it's a savings feature on a prepaid card. You know, so many consumers, about a third of consumers have access to prepaid cards. More than 4 million unbanked underbanked consumers are using general reloadable prepaid cards. So there's a real opportunity to scale up that feature, not just with our partner, but across the prepaid card industry. But I also think there's a design insight there that is potentially pilotable and scalable in a different form. And it's really thinking about how card platforms could be used to provide access to savings for consumers. And so, you know, just one idea there that we're actually in the process of piloting is using gift cards as a mode through which you could save for emergencies and really piloting that idea. And so I think it's both looking at the product itself but also design insights that come out of it. For the work that we're doing, what's safe to win is that after 2009, which was the pilot year, the pilot year was so successful we had over 11,000 consumers save more than 8.5 million in these accounts. It was easy to continue to scale that model within Michigan itself. Over three years we've had more than 25,000 unique account holders save over 40 million. And then outside of Michigan, the success of what's happened in Michigan has really helped drive legislative change in other states. We've had six states pass Prisling Savings legislation. We had one state, Nebraska, launch this year their own Safe to Win program. We have a couple more states that are interested and hopefully will launch next year. But again, there's a design insight there. These Prisling Savings products are attractive and do engage consumers in the act of saving. And so we're looking at and exploring different distribution channels for it as well as different models of it. So one model is that doesn't require legislative changes, looking at sweepstakes and offering sweepstakes in a more national large-scale program. But the other is looking at different distribution channels. So the lottery is one of them. And knowing that consumers like the lottery, a lot of consumers are actually engaged in lottery, that could be a really interesting channel through which we can offer savings. And we're actually in some conversations with a few states and state lotteries that are interested in this. We've done some national research around it also that shows that consumers are interested in this and not just lottery players, but non-lottery players too and see that as a potentially good model through which savings could be offered. Cher, are you going to see safe accounts at all, FDIC and Shared Bates? You betcha. I think we all agree that the financial services industry is really going through dramatic changes. We have different technologies taking place, new kinds of products coming to the forefront. We haven't talked about mobile, we're definitely in the forefront of delivery or platform. And I do caution us a little about the point of safety because non-banks as well as banks are in this business. And so we need to ensure that those who are really trying to help, right, the unbanked, the underserved, we want to ensure that they are able to get access to products that are on par with what anyone else can have. So we stood real with the technology to keep that eye to the consumer's best interest. Great. And kind of one last question that's related to that point is what are some of the policy challenges that you faced or implications that Jerry will pass on this one? But what are some of the policy implications coming of your pilots that you'd like to highlight? Yeah. You know, it would save to win. We were lucky in that Michigan law allowed us to test a savings promotion raffle. And so in piloting it, we didn't really have any legal hurdles. But there's definitely the challenge of scaling it, right? And so in order to scale that model, we do need to go state by state. But the nice thing is, is that we were actually able to pilot it first. And so, you know, I think that's one of the issues being able to have enough of flexibility and policy that allows you to pilot some of these innovations. Again, safe to win, we had it. But in other products, that's not necessarily the case. You know, I think another thing is, you know, when you do see something that is successful, you know, what are the potential opportunities to scale that policy or think about federal change that allows that policy to trump what's happening statewide so you don't have to go state by state to implement such a change. And Caroline, what about... I think I would just add that in this area of sort of unrestricted or emergency savings, there's very little guidance to employers about how they can help employees to do this. So there's a great deal of guidance about how to help employees save for retirement. And I think, you know, one policy type of... I don't know if I'd call it policy change, but something that could be addressed, perhaps at the federal level, would be to sort of lay out some basic rules so that employers can feel more comfortable helping employees establish these kinds of savings accounts. And then I guess I would also say just, you know, and again, not sure this is an area for policy change, but as I described in their current forms, both the SaveUSA and Odyssey product involved opening a traditional bank account in a remote location. And that, you know, sometimes is a great deal of work either for the financial institution or the... or, you know, it's partner organizations, employers or community-based organizations who are helping with the project. And so just trying to think about ways to be more innovative about how can we make that initial setup even more smooth, I think. So it sounds like in terms of thinking of new policy ideas, Reid, I'm looking at you. We have our work cut out. We've got to think of ways to make products more safe and more uniformed across the board. We've got to make sure that the avenues are open for some of these good and innovative features to really take hold. We need more guidance for our suppliers as well as distributors and find ways to make it easier for private sector entities to serve this consumer group. So now I'm going to go ahead and open it up to audience question and answers. Bill is going to be walking around the room with a mic, and please wait for him to come before you give your question because our web audience will not be able to hear you otherwise. Any questions? Bill, while you walk down there, we're going to take... Hannah, are there any questions from Twitter? Okay, great. Let's... Oh, wait. I forgot it. Never mind. We'll take this one first. A question maybe to Sherry in particular. Was there any evidence in the pilot that the financial institutions made money on these accounts? Made money. So this is the one-year pilot, and our institutions, you know, fair enough, really there were some challenges in trying to come up with what the revenue versus the cost is. But what they did was we asked them about cost recovery. We know that for lower income folks, it's never going to be the humongous profit maker. Right? We can recognize that. But the banks, what they did do was they looked at the cost recovery. And that's where we can say that on the cost recovery side that these transaction and savings accounts fared as well if not better for some of the pilot banks. This question... This question may be from someone in the room who's tweeting, but... The question is, have persistent banking scandals caused people to avoid opening and maintaining accounts? That might be a question for Sherry, but I think anyone could maybe speak to the challenges that have... I mean, I can only mention that this is something that came up in our autosave focus groups from time to time. People worried about the stability of banks. And people... I think people being worried about, as one person said, being treated well by the financial institution. It is true, though, Hannah, from the surveys that we do of households that consistently the number one reason for not having an account is that they don't believe that they have enough money to support that account. And I think... I don't know if this is not directly related to the question, but there is some evidence from focus groups that savings accounts are maybe a good way to rebuild trust within the financial services sector. So, oftentimes, focus groups will say savings accounts are more attractive to me if I were to engage with a bank, and the same often comes from consumers and saying they would like to see a savings product from prepaid providers. So... Sorry, let's go to her first. Hi, my name is Monica, and I'm a graduate student now, and I previously worked at the Financial Empowerment in Brooklyn. And so I know from previous experience a lot of times, prerequisite to savings is the money management and budgeting piece. I think you all touched on that, especially specific to tax refunds. And I know as a direct service provider we oftentimes come up with these clunky ad hoc ways of opening up a third account separate from checkings and savings and budgeting out through automating that account. And I'm wondering if there's any dialogue about kind of implementing budgeting and money management as a kind of a broader tool in kind of institutionalizing product design so that savings piece can kind of come from that. I'll just say quickly that although it wasn't considered a core feature the community-based partners who implement the USA project oftentimes did have related service components and the people who actually marketed the accounts by the tax prep sites were usually called asset specialists. And so I would say within the context of SaveUSA a fairly light touch oftentimes they were speaking to people for the first time when walking the door of the tax prep site. But at least there was an effort to be able to talk with people about a variety of asset-building questions or opportunities. And many of the organizations also offered, for example the opportunity to open a savings fund, a US savings fund. I would just say I guess I would say that building the infrastructure for some of these models it's probably useful to think about what's the core that it needs to function properly and how can it be done in a cost-effective way and sort of separate that from the kind of good stewardship of providing people with more wraparound advice and assistance. So that you don't make the core dependent upon having to build a large infrastructure of financial advising. So a lot of this comes into the question of how are we going to deliver education to those who need it. And it was something that came up at the pile that was really kind of interesting and that was that the front-line tellers and customer service representatives were actually a valued asset for that purpose by many of our banks. And for me personally I was surprised at that. But they spend the time the tellers were trained actually to spend the time with the individual who came up there that they were a safe account holder possibility. And they talked to them about how to manage and just went through that discussion with them and to build that relationship. So I personally was surprised that we perhaps we get so excited about the online stuff and all that. But there's still a lot of good face-to-face that's going on out there in the marketplace. No, I mean nothing to add to that but just to echo that and continue to be key and are safe to one work. You know, it's really that front-line staff that is engaging consumers, is making them aware that this product exists. And they're excited about the product and because they're excited about it they can communicate that excitement to consumers. And that's important, that's how consumers learn about it and understand it because it does function differently than typical savings accounts. And I think if you're not going to provide advising on the use of a product then I think making the product as safe and user-friendly as possible is that core that I was describing. And then there's a question up here. Hannah, do we have any more? Hi, I'm Can you hear me? Hi, I'm Woody. I'm a recent graduate from Jumps Hopkins who'd be interested in working in an organization trying to promote savings. I was wondering if you've seen any proposals to make a program like this somewhat of an automatic stabilizer during booms and recessions. Essentially you make it procedurally much easier to save during boom times and make it procedurally much less easy to save during a recession when we need consumer spending to be up. I was wondering if you think that could be a more politically palatable form of stabilization rather than the government running large deficits which look very politically unpopular. Well I think that's a very interesting question. I think you're right in the sense that what we're trying to do right now is to lay the infrastructure so that when this down economic cycle is passed that people are then able to save because that's something that we saw not happen in this previous cycle and so I think that just kind of goes to the importance of paying attention right now at this moment to savings products and the development of the right kind of savings products so that you know in the future we don't have to see the same repetitive cycle that we've seen today. And final question or I guess we'll take two more and then that's it. I'm curious about tying this into places where poverty is more concentrated like housing developments and how some of these tools could be rolled out for residents people who are in Section 8 and things like that or also a program like TANF maybe $5 from a TANF account could go into the savings market. What do you think about those ideas? For the pilot, it's actually you brought that up I'm glad you did because there are a couple of pilot institutions who actually approach the housing authorities, the local housing authorities and others about this because that seems like a really good match right? And it's a good match but it takes time. That was kind of the lesson for us is that some of these approaches do take time in developing these relationships so our institutions are on their way toward this process of using the safe accounts for these kinds of constituencies but it was taking more than just the year. Definitely Sherry is mentioning being able to develop partnerships with different agencies or different community-based organizations is a great way to make sure the products are being utilized and available to those who may need it most. One of the programs that we look at in the asset building program is the Family Self-Sufficiency program within Health and Human Services where a savings account is provided to public housing residents and rent increases rather than going to the housing authority can be put into the savings account. Across different public benefits programs there is an interest in developing more of an asset building and savings component into those programs and that's going on throughout the administration for children and families. Very good points. Let's address this question and then I have two quick questions. One is just about interest rates connected with all these things because I don't think anyone mentioned it but I assume there may be market rates. The other one is for Sirika, I'm very interested in gamifying savings and I was recently at a talk on health behaviors how introducing gaming models and that is how a lot of impact particularly creating competition. So I was just wondering if there are other things that you're aware of when you scan the environment they're doing similar things to extend your programs idea. So the first question I'll let everyone answer that but the first question on interest rates with safe to win each of the credit unions set their own interest rate on the product and so we've seen it range from market rate to below because there's prizes that are associated with the account with plastic we actually have no interest rate on the savings feature. So in both the autosave and save USA projects these were primarily market rate interest bearing accounts which during the period of implementation has been below 1%. In autosave we also had two sites where we negotiated with the bank in one case the only way we could get all the other features we wanted was to have it not be an interest bearing account so we went ahead and did that particularly because we weren't losing a great deal in these rates and then in our Ohio site in autosave we benefited from an additional statewide program that supplemented the savings I mean the interest rate on savings accounts for certain consumers and so it went up to I believe it was 3.25% for a limited time. I think something that's really interesting about interest rates is that you know that's something that higher income savers tend to focus on a lot there is some evidence that for lower income savers particularly the consumers that we look at the savings amounts are relatively low and people need to withdraw them every now and then so the payout for interest may not be that high and the motivation at looking at interest rates might not be the top priority of course in ideal world having high interest rates is always better but you know there is I guess the point is that we have the consumers that we're looking at and so I'll let Sariqa talk about the games. Sure so I'll do my best to answer this I'm probably not the best person on our team to do so but I would definitely put you in touch with them but you know we have done a lot of work in thinking about how to help consumers build financial capability and knowing that sometimes traditional financial education doesn't work well for that to engage consumers in that so we've actually designed financial education games called financial entertainment and they each really focus on something different but it's all around how do we help consumers make better financial decisions for themselves and what we've done is once we've designed the games we then try to link them to an action so we help consumers understand and then we want to see if they if it helps them actually change behavior and so we've done a lot of work around that and really trying to link these games to actions to help consumers improve their decisions and increase savings but also just furthering our understanding of the space of gamification and really trying to think more broadly on how gamification can be used within designs of products and I can say that we'll have a paper out shortly really just around that but our exploration into that has really been around our financial entertainment games but also some of the work that we've done around price link savings and really being able to bring in excitement into the act of saving. Thank you. Thank you Sarka, Carolyn and Sherry for being here today I certainly hope this is the start of a productive conversation on what it will take to build a more robust savings market in the U.S. We've all got reports on our research which is available on the event page and of course please don't hesitate to reach out to me if you have any questions or if you want to share some of the product innovations you're working on for lower income consumers. My contact information as well as a bunch of resources on savings and asset building is available on assets.newamerica.net Thank you.