AFI Credit Score Consent Justification

To: Brenda Aguilar; Office of Information and Regulatory Affairs (OIRA)

From: Office of Planning, Research and Evaluation (OPRE); Administration for Children and Families (ACF)

Date: April 16, 2013

Subject: Nonsubstantive Change Request – Assets for Independence (AFI) Program Evaluation (OMB #0970-0414)

Background

The initial request for the Assets for Independence (AFI) program evaluation involved clearance for a site-specific evaluation in two AFI grantees – Prosperity Works (New Mexico) and Community Financial Resource Center (Los Angeles, CA). Since the time of initial clearance, we have explored the feasibility of including credit scores, collected by grantees, in the study. This requires no changes to the study’s information collection, only changes to the consent form. At this time, we are requesting clearance for a revised consent form that reflects our intention to analyze participants’ credit scores.

Rationale for Change

This evaluation will assess the short-term effects on low-income individuals and their households of participation in an individual development account (IDA) program. IDAs combine a financial incentive to save for authorized asset purchases by matching the accountholder’s deposits when withdrawn for such purchases with financial education. An important hypothesized short-term effect of IDAs is an improvement in the creditworthiness of participants, as reflected in their credit scores.

Both selected sites – Albuquerque and Los Angeles – collect credit scores for all program applicants prior to program participation, and have done so as a matter of practice prior to the study. The sites share these credit scores with applicants and use them both as a means to verify program eligibility (e.g., net worth) and as a tool to support the participant’s financial education. AFI program applicants consent to having their credit score pulled as part of the application. To conduct credit pulls annually (to coincide with follow-up interviews), the study consent form must notify study participants that their credit score will be pulled at a later time (i.e., not just initially as part of their application). Credit scores will be collected on a soft-inquiry basis that will have no effect on credit scores.

Each site will obtain and retain their client credit reports and scores as internal administrative data, according to their current operating procedures. On a quarterly basis, each site will upload the credit scores obtained for their enrolled sample members to a secure server, via the study’s web-based sample enrollment software tool. This data transmission to the evaluation team will contain no personally identifiable information. To protect client privacy, each credit score will be associated only with the client’s unique study ID number. The de-identified credit score data will then be appended to the analysis file, to be used in estimating program effects.