31% 41% 11% 50% 18% PROFILE ASSETS & OPPORTUNITY PROFILE: SAN FRANCISCO KEY HIGHLIGHTS ABOUT THE PROFILE ASSETS & OPPORTUNITY

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1 ASSETS & OPPORTUNITY PROFILE: SAN FRANCISCO ASSETS & OPPORTUNITY PROFILE KEY HIGHLIGHTS 31% of San Francisco residents live in asset poverty Cities have long been thought of as places of opportunity for low-income workers to forge pathways to the middle class. But far too many urban households struggle to gain a foothold in the mainstream economy. In major U.S. cities, one out of every four households owe more than they own, and almost 60% of consumers have subprime credit scores. More than one-third of families do not have enough assets to live for three months at the federal poverty level should they lose their main source of income. Not only does financial insecurity destabilize families, it also jeopardizes the long-term vitality of cities and local economies. That is why a growing number of local leaders are seeking to expand the vision of what municipal government can and should do to stabilize the financial lives of their low-income residents. These Financial Empowerment programs involve a set of approaches designed to help families manage their money and avoid bad debt, create strategies for saving, and access appropriate financial products and services. Financial empowerment programs typically focus on four key areas: improving access to financial services; advancing financial education and coaching; encouraging asset building and protection; and promoting tax time services and benefits. San Francisco has joined with a group of 10 leading cities to form the Cities for Financial Empowerment (CFE) coalition, which is striking a new path towards integrating income enhancement, saving incentives and asset development. These programs, when coupled with enhanced consumer protection policy, are changing the paradigm for poor families in our urban centers. ABOUT THE PROFILE This Assets & Opportunity Profile was created to fuel a local conversation about wealth, poverty and opportunity. It contains a data snapshot of the financial security and stability of San Francisco residents, and provides an overview of the efforts that the city is supporting to help financially educate, empower and protect residents and enable them to build a more prosperous future. 41% of San Francisco residents have subprime credit scores 11% of San Francisco households are unbanked 7% of San Francisco mortgages are high-cost mortgage loans 50% of San Francisco residents have at least a bachelor s degree 18% of San Francisco residents are uninsured 1

2 FINANCIAL EmPOwERmENT IN SAN FRANCISCO Through the Bank on San Francisco initiative and the creation of an Office of Financial Empowerment, the City and County of San Francisco has emerged as a national leader in the delivery of programs to increase financial inclusion and combat predatory practices. The key focus of this work is connecting low-income San Franciscans to healthy financial products and providing culturally relevant financial education to ensure success in the mainstream. San Francisco views the role of the city government as essential to this work, and primarily serves as a convener and influencer in the furtherance of financial empowerment goals, bringing together financial institutions, regulators, philanthropic funders and community based organizations. In 2009, the City of San Francisco, under the leadership of Mayor Gavin Newsom and Treasurer José Cisneros, became one of only three cities in the country to launch a municipal Office of Financial Empowerment. The San Francisco OFE is housed within the Office of the Treasurer, which serves as the banker, tax collector and investment officer for the City and County of San Francisco and is led by the elected Treasurer, José Cisneros. Treasurer Cisneros believes that his role of safeguarding the city s money should extend to all San Franciscans and, as such, has embarked upon an ambitious financial empowerment agenda since taking office. San Francisco has proven success with three groundbreaking programs: Bank on San Francisco, the Working Families Credit and, most recently, Payday Plus SF. San Francisco also places a major emphasis on financial education, offering classes through the Bank on San Francisco program and convening a Financial Education Network dedicated to improving the quality of, and access to, a broad range of financial education services city-wide. The most known of these programs, Bank on San Francisco, is considered a model by the National League of Cities, the William J. Clinton Foundation, the FDIC, the Federal Reserve Bank and the US Department of the Treasury. The program is currently being replicated by more than 70 cities and states nationwide. By building on the foundation created by these programs, San Francisco is developing a continuum of local asset building services, led by city government and supported by our strong network of nonprofit organizations. Future efforts will focus on an employer engagement initiative to increase the take-up of direct deposit citywide, and a children s savings account project to put all public school children on the path to college savings. To further this work on a national level, San Francisco joined with New York City to create Cities for Financial Empowerment in 2007 and partnered with the National League of Cities and the William J. Clinton Foundation to launch a national Bank On resource and networking online portal, joinbankon.org in Financial empowerment work is exactly the kind of innovation that is needed right now, both and all cities across the country. San Francisco is proud to be a leader in this field to ensure everyone has the chance to be successful in the financial mainstream and build a better future for their family. José Cisneros, Treasurer City and County of San Francisco 2 municipal PROFILE: SAN FRANCISCO

3 CFED: ASSETS & OPPORTUNITY PROFILE financial empowerment opportunities in san francisco BANK ON SAN FRANCISCO Comprehensive partnership between the City, the Federal Reserve Bank of San Francisco, the nonprofit EARN and 14 financial institutions to bank the unbanked by offering accessible entry level checking account products and significantly reducing the barriers to mainstream banking. PAYDAY PLUS SF An alternative short term, small dollar loan of $50 to $500 offered through credit union partners at 18% APR or below, repayable over six to 12 months. WORKING FAMILIES CREDIT A local match to the Earned Income Tax Credit for qualified San Francisco residents, which includes incentives for direct deposit and connections to a wide range of other benefits. FINANCIAL EDUCATION NETWORK A collaborative group of San Francisco s nonprofit service providers, philanthropic funders and local public sector representatives dedicated to streamlining access to financial education services and products, increasing collaboration amongst service providers and sharing industry best practices. JOINBANKON.ORG A Web-based portal and toolkit to help Bank On programs across the country launch programs and learn, grow and share resources. FAMILY ECONOMIC SUCCESS WORKGROUP A unique collaboration of public agencies, private funders and city-wide nonprofits committed to improving the economic well-being of low-income families in San Francisco. WEALTHCARE SF A partnership with nonprofit EARN to train coaches in providing one-on-one financial coaching to low-income San Franciscans through 10 community based organizations. MORATORIUM ON CHECK CASHERS AND PAYDAY LENDERS Legislation passed in 2005 to prevent the proliferation of check cashers and payday lenders in low-income neighborhoods by using zoning regulations. RESULTS 52,000 checking accounts opened through Bank on San Francisco and more than 70 Bank On programs launched or in development across the United States 51,100 credits amounting to an estimated $7.4 million dollars in Working Families Credit funds distributed 250 small dollar loans made through Payday Plus SF 1800 San Franciscans receiving financial education through one of 49 partner organizations 600 individual case workers and nonprofit staff receiving training through the Family Economic Success Learning Circle workshops 10 community based organizations with trained financial coaches participating in Wealthcare for more information Leigh Phillips Office of Financial Empowerment City and County of San Francisco leigh.phillips@sfgov.org 3

4 about the data The data in the Profile includes a look at households in asset poverty, a demographic snapshot of San Francisco, and outcomes in five categories essential to building assets and long-term financial security in today s economy: Household Finances & Use of Services, Employment & Business Ownership, Housing & Homeownership, Educational Attainment, and Health Insurance. Taken together, these five categories provide a comprehensive look at the financial stability and economic resiliency of families. HOUSEHOLDS IN ASSET POVERTY Asset poverty is a measure that expands the notion of poverty to establish a minimum threshold of wealth needed for household security. A household is asset poor if it has in sufficient net worth to support itself at the federal poverty level for three months in the absence of income, i.e., net worth of less than $4,577 for a family of three in Asset poor households would not have enough savings or wealth to provide for basic needs during a sudden job loss or a medical emergency. Minority and single-parent households are more likely to be asset poor, as are those with lower levels of education. Even middle income families face asset poverty. In San Francisco, 38% of those earning between $37,741 and $59,604 are asset poor. PERCENT OF HOUSEHOLDS... City and County of... San Francisco,... California... United IN ASSET POVERTY All Households % % % % By Housing Tenure Homeowner % % % % Renter % % % % By Race % % % % Minority % % % % Black % % % % Latino % % % % Asian % % % % Native American % % % % By Education High School % % % % Some College % % % % Bachelor s Degree % % % % Advanced Degree % % % % By Age of Householder < % % % % % % % % % % % % % % % % By Marital Status Married % % % % Household with Children % % % % Single Parent % % % % By Poverty Status Below Income Poverty Line % % % % Above Income Poverty Line % % % % By Household Income Below $19, % % % % $19,993-$37, % % % % $37,741-$59, % % % % $59,605-$93, % % % % Above $93, % % % % 4 MUNICIPAL profile: SAN francisco

5 CFED: ASSETS & OPPORTUNITY PROFILE san francisco population demographics Total Population , ,171, ,264, % % % % % % % % %... Asian, % % %... Hispanic or Latino % % %... U.S. Citizen % % %... Speak English Less Than Very Well % % % ,757, % 12.2% 0.7% 4.4% 14.7% 92.8% 8.6% household finances & use of services Median Household Income... $65, $72, $58, Income Poverty Rate % % %... Asset Poverty Rate % % %... Extreme Asset Poverty Rate % % %... Households w/ Interest, Dividend or Net Rental Income % % %... Tax Filers Receiving EITC % % %... Average EITC Refund... $1, $1, $1, Unbanked Households... 11%... 13%... n/a... Median Credit Score... n/a Consumers with Subprime Credit Scores... n/a % %... Average Revolving Debt... n/a... $20, $17, Average Revolving Credit Utilization... n/a % %... Average Installment Debt... n/a... $24, $23, Borrowers 90+ Days Overdue... n/a % %... $50, % 25.9% 16.9% 25.1% 16.6% $1,932 8% % $11, % $23, % Household Income by Race Asian Hispanic or Latino $27,455 $39,844 $34,041 $54,758 $50,335 $77,495 Income Poverty by Race Asian Hispanic or Latino 3.9% n/a n/a 8.5% 11.6% 22.3% 0 $20k $40k $60k $80k 0 5% 10% 15% 20% 25% employment & business ownership Annual Unemployment Rate % % %... Average Annual Pay... $75, n/a... $50, Self-Employment % % %... Microenterprise Ownership Rate Vehicle Non-Availability by Working Household % % % % $44, % % 5

6 housing & homeownership Homeownership Rate % % %... Cost Burdened Renters % % %... Cost Burdened Owners % % %... Affordability of Homes Average Mortgage Debt... $511, $451, $365, High-Cost Mortgage Loans % % %... Foreclosure Rate % % % % 45.7% 36.3% 3.6 $195, % 3.0% Homeownership by Race Asian Hispanic or Latino 37.7% 27.7% 27.4% 46.4% 26.3% 31.1% 0 10% 20% 30% 40% 50% educational attainment Less than High School % % % % High School Degree % % % % Associate s Degree % % % % Bachelor s Degree % % % % Graduate or Professional Degree % % % % High School Degree by Race Asian Hispanic or Latino 79.9% 72.6% 65.0% 68.6% 92.2% 88.2% 0 20% 40% 60% 80% 100% Bachelor s Degree by Race 21.9% 31.8% Asian 36.7% 14.3% Hispanic or Latino 24.0% 61.7% 0 10% 30% 50% 70% health insurance Uninsured Rate %... n/a %... Uninsured Low-Income %... n/a %... Uninsured Low-Income Children %... n/a % % 29.4% 18.3% 6 MUNICIPAL profile: SAN francisco

7 CFED: ASSETS & OPPORTUNITY PROFILE data measures & SOURCES Population Demographics Household Finances and Use of Services Employment and Business Ownership Data Measure Measure Description Source Total Population Total population Percentage of population that is, non-hispanic Asian, Other Pacific Islander Percentage of population that is, non-hispanic Percentage of population that is or Alaska Native, non-hispanic Percentage of population that is Asian, Native Hawaiian or, non-hispanic Hispanic or Latino Percentage of population that is Hispanic or Latino U.S. Citizen Percentage of population that are U.S. citizens Speak English Less Than "Very Well" Percentage of population that speaks English less than "very well" Median Household Income Median household income in the past 12 months Income Poverty Rate Asset Poverty Rate Extreme Asset Poverty Rate Households with Interest, Dividend, or Net Rental Income Tax Filers Receiving EITC Percentage of all families with income in the past 12 months below the federal poverty threshold Percentage of households without sufficient net worth to subsist at the poverty level for three months in the absence of income Percentage of households that have zero or negative net worth Percentage of households reporting any interest, dividend, or net rental income in the past 12 months Percentage of tax filers receiving the federal Earned Income Tax Credit Estimates calculated by Beacon Economics, based on U.S. Census Bureau's 2004 Survey of Income and Program Participation, Wave 6 (2006) and American Community Survey Estimates calculated by Beacon Economics, based on U.S. Census Bureau s 2004 Survey of Income and Program Participation, Wave 6 (2006) and American Community Survey Brookings Institution (2006) Average EITC Refund Average EITC refund amount per EITC filer Brookings Institution (2006) Unbanked Households Percentage of households lacking both a checking and savings account. Median Credit Score Median TransUnion TransRisk Score TransUnion (Q1 2009) Consumers with Subprime Credit Scores Percentage of consumers with a TransRisk Score <=700 [on a scale of ] Estimates calculated by Mia Mabanta, Pew Safe Banking Opportunities Project, based on data from the Federal Reserve Board's Survey of Consumer Finances (2007); U.S. Census Bureau, American Community Survey; and data on the location of retail financial services locations TransUnion (Q1 2009) Average Revolving Debt Average amount of revolving debt per revolving borrower TransUnion (Q1 2009) Average Revolving Credit Utilization Average utilization of available revolving credit TransUnion (Q1 2009) Average Installment Debt Average amount of installment debt per installment borrower TransUnion (Q1 2009) Borrowers 90+ Days Overdue Annual Unemployment Rate Average Annual Pay Self-Employment Microenterprise Ownership Rate Vehicle Non-Availability by Working Household Percentage of borrowers who are 90 days or more past due on any debt payments Annual average unemployment rate of the civilian noninstitutional population 16 years of age and older Average annual pay for all workers covered by unemployment insurance Percentage of households reporting any self-employment income in the past 12 months Number of firms with 0-4 employees (non-employer firms plus establishments with 1-4 employees), per 100 people in the labor force Percentage of households (with at least one worker) lacking access to a vehicle TransUnion (Q1 2009) U.S. Bureau of Labor Statistics, Local Area Unemployment Statistics (2009) U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (2007) CFED calculation based on U.S. Census Bureau, Non-Employer Statistics, 2006; and 2006 County Business Patterns. Health Insurance Uninsured Rate Percentage of non-elderly population without health insurance U.S. Census Bureau, Small Area Health Insurance Estimates (2005) Uninsured Low-Income Uninsured Low-Income Children Percentage of non-elderly population at or below 200% or 250% (depending on the state) of the federal poverty line without health insurance Percentage of children under 19 years of age at or below 200% of the federal poverty line without health insurance U.S. Census Bureau, Small Area Health Insurance Estimates (2005) U.S. Census Bureau, Small Area Health Insurance Estimates (2005) 7

8 CFED: ASSETS & OPPORTUNITY PROFILE Housing & Homeownership Data Measure Measure Description Source Homeownership Rate Percentage of occupied housing units that are owner occupied Cost Burdened Renters Cost Burdened Owners Affordability of Homes Percentage of renter-occupied units spending 30% or more of household income on rent and utilities Percentage of mortgaged owners spending 30% or more of household income on selected monthly owner costs Median housing value divided by median household income Average Mortgage Debt Average mortgage debt per mortgage borrower TransUnion (Q1 2009) High-Cost Mortgage Loans Percentage of all conventional first lien home purchase loans (1-4 family, owner occupied dwelling) with interest rates three percentage points or more above the yield on a comparable term treasury security CFED calculation based on U.S. Census Bureau, American Community Survey data Calculation by Center for Responsible Lending based on Home Mortage Disclosure Act (HMDA) data (2007) Foreclosure Rate Percentage of all mortgage loans that are in pre-or postsale foreclosure NeighborWorks America (March 2009) Less than High School Percentage of population 25 and older who have not completed high school Educational Attainment High School Degree Associate's Degree Bachelor's Degree Graduate or Professional Degree Percentage of population 25 and older who have at least a high school degree Percentage of population 25 and older who have at least an associate's (2 year college) degree Percentage of population 25 and older who have at least a bachelor's (4 year college) degree Percentage of population 25 and older who have a graduate or professional degree about cities for financial empowerment CFE provides a platform for municipal governments to advance innovative financial empowerment initiatives both locally and nationally, leveraging resources in the service of at-risk communities. CFE members have a unique role in the field of Financial Empowerment by utilizing cities access to residents through multiple touch points and their unique ability to employ municipal tools like zoning, licensing, and local regulation to implement effective programs and policies. Coalition members work together to pursue promising strategies and programming in their own cities, and in collaboration with public, private, and nonprofit sectors. Member cities have made measurable commitments to increase public awareness of critical issues, create pathways for financial stability, and advocate for policy changes at the federal level. about CFED CFED (Corporation for Enterprise Development) expands economic opportunity by helping Americans start and grow businesses, go to college, own a home, and save for their children s and own economic futures. We identify promising ideas, test and refine them in communities to find out what works, craft policies and products to help good ideas reach scale, and develop partnerships to promote lasting change. We bring together community practice, public policy and private markets in new and effective ways to achieve greater economic impact. We gratefully acknowledge support for this profile from Living Cities. 8 MUNICIPAL profile: SAN FRANCISCO PUBLISHED June 2010