Individual Development Account Initiative (IDA)
IDA Programs require the participation of a variety of groups and individuals as partners to ensure success. In Connecticut this
partnership consists of the Office of the State Treasurer, the Department of Labor,
local Community-Based Organizations, financial institutions, and the IDA Account Holders.
This "partnership" is beneficial to all partners.
Role of the Office of the State Treasurer
The Office of the State Treasurer helped to create the Connecticut IDA Initiative.
The Office of the State Treasurer provided consultation to the Department of Labor on
IDA regulations and program certification. The Office of the State Treasurer advocates
for IDA programs in Connecticut.
Role of the Connecticut Department of Labor
The Connecticut Department of Labor (DOL) was designated by Public Act 00-192 as the
administrator of the Connecticut Individual Development Account Initiative.
As part of its administrative duties, DOL performs the following functions:
Establish an Individual Development Account Reserve Fund to hold appropriations and private sector contributions for the administration of the Connecticut IDA Initiative, and for certified State IDA programs.
Certify IDA programs in Connecticut regardless of the funding source provided that such programs meet certain criteria based on the State law and recognized best practices. The State "certification" is like a seal of approval that indicates the Program Operator is in keeping with State and Federal law, and follows recognized best practices. It is intended to facilitate program success and to encourage private sector contributions and other involvement in Certified State IDA Programs.
Fund Certified State IDA Programs, through competitive Request for Proposals processes.
Evaluate the Connecticut IDA Initiative and provide annual reports.
Establish an IDA Clearinghouse to provide information about funding opportunities, best practices, and technical assistance to Community-Based Organizations that operate or seek to establish Certified State IDA Programs.
Role of Community-Based Organizations (CBOs)
Community-Based Organizations are crucial to
effective IDA Program operation. Community-Based Organizations have
experience working with potential IDA Program
participants and account holders and, in most cases, have
existing relationships of trust. CBO roles include the following:
Provide the resources to help Participants build their personal and financial assets.
Operate the program components that ensure and support Participant savings, using best practices, including:
- Eligibility Determination
- Acceptance into the Program
- Financial Education
- Case Management
- Asset-Specific Training
- Asset Purchase
- Post-purchase follow-up and support
- Bring together community partners to bring added value to the IDA program.
Role of Partnering Financial Institutions
Financial Institutions and Community-Based Organizations are vital partners in
providing IDAs to low-income families. Financial Institutions hold the accounts
and bring their experience in the financial world to the partnership. A community-focused
attitude on the part of the Financial Institution benefits all parties. Specifically,
partnering Financial Institutions should provide the following:
- No minimum balance or monthly fees on IDAs.
- At least a market rate of interest; preferably higher.
- Locations that are accessible to the target population.
- Mail in, ATM and direct deposit capability.
- A contact person for the IDA program and a willingness to train staff about IDAs.
- Assistance with Financial Education and Asset-Specific Training.
- Assurance that Program procedures are followed.
- If possible, duplicate monthly statements mailed both to the Participant and IDA Project Director; ideally the capacity to report electronically.
Financial Institutions may offer auxiliary or complementary services to IDA
Participants, but may not require Participants to make use of these services.
There is the opportunity for Financial Institutions to provide financial
support to the Community-Based Organization operating the IDA Program by
providing matching funds or operating funds, which are eligible for Federal
Community Reinvestment Act credits and State Human Capital Investment Credits.
Role of Participants
The Participant's role is most critical to success. Participation in an IDA Program
requires trust and a long-term commitment on the part of the Participant.
Participants must adhere to the rules of the Program. They must develop a Family
Self-Sufficiency Plan and Family Mission Statement and participate in financial
education and asset-specific training. They must be willing to work with a case
manager and support each other through ongoing peer support meetings.
Participants must commit to saving regularly and to developing lifetime savings habits.
They must be willing to acquire or polish the personal and financial skills that are
essential for success (long-range planning, household budgeting, credit repair,
and savvy consumer habits).
Financial Institutions Supporting IDAs in Connecticut
The following financial institutions are currently funding or
holding IDA accounts in Connecticut.
Peoples United Bank