Banks, willing and ABLE

In 2014, Congress passed the Achieving a Better Life Experience, or ABLE, law, which authorizes a savings program designed to help people with disabilities save money without jeopardizing disability payments subject to income caps..Supplemental Security Income and Medicaid, for example, have a $2,000 asset limit. Saving more could mean the curtailment of benefits. ABLE changed that so that participants can tuck away funds to purchase a home or other asset, or simply to pay for health and living expenses. Depending on the state, the cap on the accounts is as much as $500,000.Individual states run their own programs. Typically, a customer can choose to place their funds in a checking account, a money market fund, or an investment fund. Even though the program is in its 10th year, the National Association of State Treasurers reports there were only 186,641 ABLE accounts at the end of 2024. That is an astonishing low number given there are an estimated 8 million people who are eligible to have one. Another 6 million people will gain eligibility next year when the age ceiling on eligibility changes to 46 from the current 26.Citing an “information disconnect,” an ABLE expert quoted by the Associated Press in a recent article said participation is low because few social services professionals know about the accounts. Let me propose a way to resolve that problem: Open up the program to involve more banks.Currently, only a small number of banks offer ABLE accounts, although most banks would likely welcome the opportunity to offer one. An organization called the National ABLE Alliance manages the program for 19 states, including Minnesota, Iowa, Illinois, Indiana, Kansas and Michigan. The Alliance contracts with Ascensus to administer the program, and Ascensus has worked out an arrangement with Fifth Third Bank to offer the accounts. I encourage the banking industry to work with the Alliance, and possibly other consortiums, to win the opportunity to offer the accounts. I am quite certain that if hundreds of banks offered the accounts, they would spread the word and we would see the number of ABLE accounts substantially grow to serve many, many more people.To be sure, there is reporting and associated bureaucracy to offering the accounts, but many banks, which already are used to substantial compliance burdens, are equipped to handle the additional paperwork, especially if it means serving an important customer group and opening the door to additional liquidity.