Issue Summary

In 2006, the legislature passed Think New Mexico's Family Opportunity Accounts Act, providing $1.5 million to support asset-building opportunities for low-income New Mexicans.

The Act was based on Think New Mexico's 2005 policy report, which outlined a strategy to move more New Mexicans out of poverty and into the middle class by encouraging low-income families to save for education, home-ownership, and starting micro-enterprises. Think New Mexico organized a diverse coalition in support of the legislation, and it passed the House 64-2 and the Senate 34-0.

The Family Opportunity Accounts Act, drafted by Think New Mexico, provides $1.5 million to support Individual Development Accounts targeted to families with children.

IDAs are interest-bearing bank savings accounts, in which every deposit an individual or family makes is matched with state and private dollars. The funds in the account are restricted for use in placing a down payment on a home, starting or expanding a micro-business, or paying for college or vocational education. In order to receive the matching funds, IDA account holders must successfully complete financial literacy classes, where they learn how to reduce debt, budget, manage a checking account, save, invest and avoid financial pitfalls like predatory lending.

IDAs help families develop the resources they need to move out of poverty for the long-term. Today, IDAs are available to fewer than 300 New Mexicans, although nearly 185,000 New Mexicans live below the federal poverty line.