By Stephen Stetson Policy Analysis, Arise Citizens’ Policy Project

The 2012 session of the Alabama Legislature produced mixed results for asset-building advocates. While the Legislature did approve creation of a housing trust fund (HTF) to help Alabamians become home owners, it failed to act on other issues that would build wealth in low-income families.

HB 110, sponsored by Rep. Patricia Todd (D-Birmingham), authorizes the state to help fund construction and renovation of low-income housing, provide emergency rental aid, and support other affordable housing services. The law creates the trust fund but does not appropriate state money for it. The HTF positions Alabama to allocate state funds if they become available in the future and to manage federal funds that Congress could appropriate through the National Housing Trust Fund. The bill passed the House 82-0 in February and received Senate approval by a count of 24-2. It was signed into law by Gov. Bentley in mid-May and is enrolled as Act 2012-384.

Another issue important to asset-building advocates over the years fared less well this session. Proposed legislation on predatory lending failed to pass. A package of bills to increase regulation of payday lending and title pawn transactions was introduced late in the session, and did not include input from consumer advocates. In the House, the bills were sponsored by Rep. Todd, and in the Senate by Sen. Bryan Taylor (R – Prattville).

The bills would have regulated pawn shops, automobile title loans and payday loans but would not have put an end to any of the high interest lending practices that prey on low-income Alabama consumers. Although they had some bipartisan support, the bills also mobilized lobbyists from the lenders. The bills never reached floor debate in either chamber, in part because of the late date of their introduction, but advocates expect that the measures will return early in the 2013 session.

Finally, building on the success of passing legislation allowing the state to be a matching funding partner for individual development accounts (IDAs), asset-building advocates had set their sights on securing state appropriations. The funds would match, dollar-for-dollar, the savings of low-income savers and would go along with matching money from the federal government. The leading strategy was an effort to get the state community college system to devote funds to the savings accounts, which the saver would then use for continuing post-secondary education. In this way, the community college system would get its money back, along with the savings of the student and the federal match money, multiplying state money and bringing committed students into the post-secondary college system.

Unfortunately, as Alabama continues to suffer through a protracted fiscal crisis, trust in new programs is as scare as state dollars. Compounding the matter, the Chancellor of the Post-Secondary System, Frida Hill, was fired in early March, casting a shadow of uncertainty over budget flexibility in the two-year college system. Advocates remain hopeful that future administrators will see the virtues of IDA contributions and will be willing to devote money to a program that is certain to act as a fiscal multiplier for the state while assisting motivated low-income Alabamians in their quest to acquire additional skills and earning capacity.