By GINNIE GRAHAM World Staff Writer
Published: 9/22/2009  2:22 AM
Last Modified: 9/22/2009  3:55 AM

About 23 percent of Oklahoma households would not survive three months above the poverty level if a source of income is lost, according to a national report released Monday.

A financial stability report issued by the Oklahoma Policy Institute and Washington, D.C.,-based Center for Enterprise Development gives the state a "C" grade, showing improvements needed to help residents build and protect assets.

"We are seeing during this downturn that for many families the loss of a job or income is creating a direct line to a food pantry, utility assistance or those types of social programs because there isn't savings to tap into."

The report breaks data into five areas - financial assets and income, business and jobs, housing and home ownership, health care and education - with 58 statistical measures taken within those.

Blatt said the scorecard will be used to bring attention to public policy changes.

"This has been the road to prosperity and how we make the road more accessible to folks. This is not just to provide public assistance, but about integrating people into middle-class society."

Housing is among Oklahoma's stronger areas with the second-best national ranking in home affordability. However, the state ranks 33rd in foreclosure and 48th in the issuance of high-cost mortgage loans, which means Oklahoma is the third worst in the country.

The national rankings go from best, or most desirable, to worst, or least desirable.

"The strongest indicator is on affordability of homes,'' said Blatt. "Even during the national housing price bubble, Oklahoma remained relatively unaffected. Although our home values are fairly modest and we avoided much of the real estate bust, we still have fairly high rates of foreclosure and one of the worst for high-cost, subprime loans.

"Because we have such a high rate of subprime loans, that has meant a lot of our homeowners have ended up struggling with foreclosure."

The state performed poorly in some health areas, such as 45th for uninsured, low-income parents and 44th in employees insured by employers.

Blatt pointed out some social programs, such as the Temporary Assistance for Needy Families, penalize clients for having savings.

"We've done a good job easing asset limits on some programs such as Medicaid," Blatt said. "But some other programs are sending mixed signals that tell people if you do put money aside, that will work against your eligibility for assistance."

Among the recommended policies, the only area Oklahoma has met is in early childhood education programs.

The report shows there are no state policies for predatory mortgage and payday lending protections or state Individual Development Account program support.

"It is worth looking again at the payday lending industry that really preys on some of the most vulnerable households by typically providing repeated, high-cost loans to people," Blatt said. "The average payday loan user takes out more than nine loans a year and (is) paying a $45 to $60 fee on a two-week loan."

In addition to urging the state to institute predatory lending protections, the report suggests adding incentives to the state's 529 college savings plan.

"Very few low and moderate households currently participate," Blatt said. "We may be able to lower the initial deposit or find tax preferences to help families put money away for college. It will make college not only more affordable, but it will help develop savings patterns and habits. It will show 'here is the way to have the financial habits to promote wealth.'"

Data come from various government and private sources available as of April. Most sources are public, such as the U.S. Census, U.S. Department of Commerce or U.S. Department of Health and Human Services. But some proprietary information was purchased, such as data for consumer and revolving debt.

Oklahoma Financial Stability