prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 1.



Report 2: Running away from home is not a recent phenomenon  Folkloric heroes Huckleberry Finn and Davy Crockett fled their abusive fathers to find adventure and employment  Although some youth today also leave home due to abuse and neglect, they often endure far more negative outcomes than their romanticized counterparts from an earlier era  Without adequate and safe shelter, runaway and homeless youth are vulnerable to engaging in high-risk behaviors and further victimization  Youth who live away from home for extended periods may become removed from school and systems of support  Runaway and homeless youth are vulnerable to multiple problems while they are away from a permanent home, including untreated mental health disorders, drug use, and sexual exploitation  They also report other challenges including poor health and the lack of basic provisions  Congress began to hear concerns about the vulnerabilities of the runaway population in the 1970s due to increased awareness about these youth and the establishment of runaway shelters to assist them in returning home  Congress and the President went on to enact the Runaway Youth Act of 1974 as Title III of the Juvenile Justice and Delinquency Prevention Act ( P L  93-415 ) to assist runaways through services specifically for this population  Since that time, the law has been updated to authorize services to provide support for runaway and homeless youth outside of the juvenile justice, mental health, and child welfare systems  The Runaway Youth Act—now known as the Runaway and Homeless Youth Act—authorized federal funding to be provided through annual appropriations for three programs that assist runaway and homeless youth: the Basic Center Program (BCP), Transitional Living Program (TLP), and Street Outreach Program (SOP)  Together, the programs make up the Runaway and Homeless Youth Program (RHYP), administered by the Family and Youth Services Bureau (FYSB) in the U S  Department of Health and Human Services' (HHS) Administration for Children and Families (ACF)  Basic Center Program: Provides funding to community-based organizations for crisis intervention, temporary shelter, counseling, family unification, and after care services to runaway and homeless youth under age 18 and their families  In some cases, BCP-funded programs may serve older youth  Over 31,000 youth participated in FY2016, the most recent year for which data are available  Transitional Living Program: Supports community-based organizations that provide homeless youth ages 16 through 22 with stable, safe, longer-term residential services up to 18 months (or longer under certain circumstances), including counseling in basic life skills, building interpersonal skills, educational advancement, job attainment skills, and physical and mental health care  Over 6,000 youth participated in FY2016  Street Outreach Program: Provides funding to community-based organizations for street-based outreach and education, including treatment, counseling, provision of information, and referrals for runaway, homeless, and street youth who have been subjected to, or are at risk of being subjected to, sexual abuse, sexual exploitation, prostitution, and trafficking  SOP grantees made contact with more than 36,000 youth in FY2016  This report begins with an overview of the runaway and homeless youth population  It then describes the challenges in defining and counting this population, as well as the factors that influence homelessness and leaving home  The report also provides background on federal efforts to support runaway and homeless youth, including the evolution of federal policies to respond to these youth, with a focus on the period from the Runaway Youth Act of 1974 to the present time  The report then describes the administration and funding of the Basic Center, Transitional Living, and Street Outreach programs that were created from authorizations in the act  The appendixes include funding information for the BCP program and discuss other federal programs that may be used to assist runaway and homeless youth  There is no single federal definition of the terms "homeless youth" or "runaway youth " However, HHS relies on definitions from the Runaway and Homeless Youth Act in administering the Runaway and Homeless Youth program: The act includes the following definitions: "Homeless youth," for purposes of the BCP, includes individuals under age 18 (or some older age if permitted by state or local law) for whom it is not possible to live in a safe environment with a relative and who lack safe alternative living arrangements  "Homeless youth," for purposes of the TLP, includes individuals ages 16 through 22 for whom it is not possible to live in a safe environment with a relative and who lack safe alternative living arrangements  Youth older than age 22 may participate if they entered the program before age 22 and meet other requirements  "Runaway youth" includes individuals under age 18 who absent themselves from their home or legal residence at least overnight without the permission of their parents or legal guardians  Separately, the McKinney-Vento Act authorizes several federal programs for homeless individuals that are administered by the U S  Department of Housing and Urban Development (HUD)  The definition of "homeless individual" in McKinney-Vento refers to "unaccompanied youth," which applies to selected homelessness programs  HUD's related regulation defines an "unaccompanied youth" as someone under age 25 who meets the definition of "homeless" in the Runaway and Homeless Youth Act or other specified federal laws  The regulation also provides additional criteria, including that they have lived independently without permanent housing for at least 60 days  The research literature discusses definitions of runaway and homeless youth  While studies have often categorized young people based on their status as runaways , homeless, or street youth , a 2011 report suggests that overlap exists between these categories  The authors of the study note that these "typologies," or classifications, are too narrowly defined by the youth's housing status and reasons for homelessness, among other factors  The authors explain that typologies based on mental health status or age cohort are promising, but they suggest further research in this area to ensure that the typologies are accurate  The precise number of homeless and runaway youth is unknown due to their residential mobility  These youth often eschew the shelter system for locations or areas that are not easily accessible to shelter workers and others who count the homeless and runaways  Youth who come into contact with census takers may also be reluctant to report that they have left home or are homeless  Determining the number of homeless and runaway youth is further complicated by the lack of a standardized methodology for counting the population and inconsistent definitions of what it means to be homeless or a runaway  Differences in methodology for collecting data on homeless populations may also influence how the characteristics of the runaway and homeless youth population are reported  Some studies have relied on point prevalence estimates that report whether youth have experienced homelessness at a given point in time, such as on a particular day  According to researchers that study the characteristics of runaway and homeless youth, these studies appear to be biased toward describing individuals who experience longer periods of homelessness  HUD requires communities receiving certain HUD funding to conduct annual point-in-time (PIT) counts of people experiencing homelessness, including homeless youth  The PIT counts include people living in emergency shelter, transitional housing, and on the street or other places not meant for human habitation  It does not include people who are temporarily living with family or friends  In the 2018 PIT count, communities identified 36,361 unaccompanied youth under age 25 (versus 40,799 in 2017) and another 8,724 under age 25 who were homeless parents (versus 9,434 in 2017)  While PIT counts do not provide a confident estimate of youth experiencing homelessness across the country, they provide some information to communities about the potential scope of youth homelessness  The Reconnecting Homeless Youth Act ( P L  110-378 ), which renewed authorization of appropriations for the Runaway and Homeless Youth Program through FY2013, also authorized funding for HHS to conduct periodic studies of the incidence and prevalence of youth who have run away or are homeless  Separately, the accompanying conference report to the FY2016 appropriations law ( P L  114-113 ) directed HUD to use $2 million to conduct a national incidence and prevalence study of homeless youth as authorized under the Runaway and Homeless Youth program  HUD provided these funds to Chapin Hall at the University of Chicago to carry out the study  The study, known as Voices of Youth Count , used a nationally representative phone survey to derive national estimates and conducted brief surveys of youth and in-depth interviews of youth who had experiences of homelessness  The phone survey involved interviews with adults whose households had youth and young adults ages 13 to 25 and with adults ages 18 to 25  Voices of Youth Count estimated that approximately 700,000 youth ages 13 to 17 and 3 5 million young adults ages 18 to 25 had experienced homelessness within a one-year period, meaning they were sleeping in places not meant for human habitation, staying in shelters, or temporarily staying with others while lacking a safe and stable alternative living arrangement  This differs from the PIT counts because it includes individuals who are staying with others  The study also found that youth homelessness affected youth in rural and urban areas at similar levels  A 2010 study on the lifetime prevalence of running away used longitudinal survey data of young people who were 12 to 18 years old when they were first interviewed about whether they had run away—defined as staying away at least one night without their parents' prior knowledge or permission—along with other behaviors  In subsequent years, youth who were under age 17 at their previous interview were asked if they had run away since their last interview  Youth who had ever run away were asked how many times they had done so and the age at which they first did  The study found that 19% of those who ran away did so before turning 18; females were more likely than males to run away; and among white, black, and Hispanic youth, black youth have the highest rate of ever running away  Youth who ran away reported that they did so about three times on average; however, about half of runaways had only run away once  Approximately half of the youth had run away before age 14  A subset of runaway youth is those in foster care  In FY2017, over 500 children in the United States had run away from their foster care home or other placement  While this represents less than 1% of all children in foster care, running away is more prevalent among older youth in care  A study of over 50,000 youth ages 13 through 17 in 21 states indicated that 17% ran away at least once during their first time in foster care  The study found that female, black, and Hispanic youth were more likely to run away than male and white youth in care  The study further found that youth were more likely to run away from congregate care (i e , group care) settings compared to other settings, such as living with a relative or in a foster family home  Youth were also more likely to run away from care if they lived in the most socioeconomically disadvantaged counties or lived in a state that lacked a process to screen youth on the risk of running away  States report on the characteristics and experiences of certain current and former foster youth through the National Youth in Transition Database (NYTD)  Among other information, states must report data on cohorts of foster youth beginning when they are age 17, and later at ages 19 and 21  Among youth surveyed in FY2015 at age 21, about 43% reported having experienced homelessness  Youth most often cite family conflict as the major reason for their homelessness or episodes of running away  According to the research literature, a youth's poor family dynamics, sexual activity, sexual orientation, pregnancy, school problems, and alcohol and drug use are strong predictors of family discord  One-third of callers who used the National Runaway Safeline in 2017—a crisis call center funded under the Runaway and Homeless Youth Program for youth and their relatives involved in runaway incidents—gave family dynamics (not defined) as the reason for their call  Further, a longitudinal survey of middle school and high school youth examined the effects of family instability (e g , child maltreatment, lack of parental warmth, and parent rejection) and other factors on the likelihood of running away from home approximately two to six years after youth were initially surveyed  Researchers found that youth with family instability were more likely to run away  Family instability also influenced problem behaviors, such as illicit drug use, which, in turn, were associated with running away  Researchers further determined that certain other effects (e g , school engagement, neighborhood cohesiveness, physical victimization, and friends' support) were not strong predicators of whether youth in the sample ran away  In a study of youth who ran away from foster care between 1993 and 2003, the youth cited three primary reasons why they ran from foster care: to connect with their biological families, express their autonomy and find normalcy, and maintain relationships with nonfamily members  The Voices of Youth Count study found that certain youth ages 18 to 25 were at heightened risk of experiencing homelessness  This included youth with less than a high school diploma or GED; who were Hispanic or black; who were parenting and unmarried; or identified as lesbian, gay, bisexual, transgender, or questioning (LGBTQ)  Gay and lesbian youth appear to be at greater risk for homelessness and are overrepresented in the homeless population, due often to experiencing negative reactions from their parents when they come out about their sexuality  The Voices of Youth Count study found that LGBTQ young adults ages 18 to 25 had more than twice the risk of being homeless than their heterosexual peers  LGBTQ youth made up about 20% of young adults who reported homelessness  In addition, a study involving LGBTQ young adults in seven cities found that the most common reason youth became homeless was due to being kicked out or asked to leave the home of a parent, relative, foster home, or group home  Under an HHS grant, Youth with Child Welfare Involvement at Risk of Homelessness , the 18 grantees (state, local, and tribal child welfare agencies or community-based organizations) evaluated multiple risk factors for homelessness among child welfare-involved populations: which include those who have had numerous foster care placements, run away from foster care, been placed in a group home, had a history of mental health or behavioral health diagnoses, had juvenile justice involvement, had a history of substance abuse, been emancipated from foster care, and been parenting or fathered a child  Runaway and homeless youth are vulnerable to multiple problems while they are away from a permanent home, including untreated mental health disorders, drug use, and sexual exploitation  Studies of homeless youth indicate that they are more likely to experience mental health and substance abuse disorders than their counterparts in the general population  A literature review of studies on psychiatric disorders among homeless youth found high prevalence of conduct disorders, major depression, psychosis, and other disorders  A study of participants in the Street Outreach Program found that about 6 out of 10 reported symptoms associated with depression and almost three-fourths reported that they had experienced major trauma, such as physical or sexual abuse or witnessing or being a victim of violence  Substance abuse is more prevalent among youth who live on the street, compared to homeless youth who are in shelters  Still, both groups of youth use alcohol or drugs at higher rates than their peers who live in family households, even after researchers control for demographic differences  While away from a permanent home, runaway and homeless youth are also vulnerable to sexual exploitation; sex and labor trafficking; and other victimization such as being beaten up, robbed, or otherwise assaulted  Some youth resort to illegal activity including stealing, exchanging sex for food or a place to stay, and selling drugs for survival  Runaway and homeless youth report other challenges including poor health and a lack of basic provisions  Prior to the enactment of the Runaway Youth Act of 1974 (Title III, Juvenile Justice and Delinquency Prevention Act of 1974, P L  93-415 ), federal policy provided limited services to runaway and homeless youth  If they received any services, most of these youth were served through the local child welfare agency, juvenile justice court system, or both  The 1970s marked a shift to a more rehabilitative model for assisting youth who had run afoul of the law, including those who committed status offenses such as running away  During this period, Congress focused increasing attention on runaways and other vulnerable youth due, in part, to emerging sociological models to explain why youth engaged in deviant behavior  The first runaway shelters were created in the late 1960s and 1970s to assist them in returning home  The landmark Runaway Youth Act of 1974 decriminalized runaway youth and authorized funding for programs to provide shelter, counseling, and other services  Since the law's enactment, Congress and the President have expanded the services available to both runaway youth and homeless youth under what is now referred to as the Runaway and Homeless Youth Program  In more recent years, other federal entities have been involved in responding to the challenges facing runaway and homeless youth  These efforts are coordinated through the U S  Interagency Council on Homelessness (USICH)  Figure 1 traces the evolution of federal policy in this area  The Runaway and Homeless Youth Program is a major part of recent federal efforts to end youth homelessness through the U S  Interagency Council on Homelessness  The USICH, established under the 1987 Stewart B  McKinney Homeless Assistance Act, is made up of several federal agencies, including HHS and HUD  The HEARTH Act, enacted in 2009 as part of the Helping Families Save Their Homes Act ( P L  111-22 ), charged USICH with developing a National Strategic Plan to End Homelessness  In June 2010, USICH released this plan, entitled Opening Doors   The plan set out goals for ending homelessness, including (1) ending chronic homelessness by 2015; (2) preventing and ending homelessness among veterans by 2015; (3) preventing and ending homelessness for families, youth, and children by 2020; and (4) setting a path to ending all types of homelessness  In 2012, USICH amended Opening Doors to specifically address strategies for improving the educational outcomes for children and youth and assisting unaccompanied homeless youth  USICH outlined its intention to improve outcomes for youth in four areas: stable housing, permanent connections, education or employment options, and socio-emotional well-being  In 2013, a USICH working group developed a guiding document for ending youth homelessness by 2020  Known as the Framework to End Youth Homelessness , the document outlines a data strategy to collect better data on the number and characteristics of youth experiencing homelessness  This data strategy includes coordinating the former data collection system for the Runaway and Homeless Youth program—referred to as RHYMIS—with HUD's Homeless Management Information Systems (HMIS)  RHYMIS was a data system administered by HHS for previous RHYP grantees to upload demographic and other data for the youth they served  HMIS is a locally administered data system used to record and analyze client, service, and housing data for individuals and families who are homeless or at risk of homelessness in a given community  As of FY2015, RHYP grantees stopped reporting to RHYMIS and instead report to HMIS  Grantees reported to RHYMIS on the basic demographics of the youth, the services they received, and the status of the youth upon exiting the programs  RHY grantees are now required to report this same (and new information) to HMIS  According to HHS, some grantees have had have encountered inaccurate software programming for their data standards or have had issues with successfully extracting their data to submit to HHS  The data strategy outlined in the framework also involves, if funding is available, designing and implementing a national study to estimate the number, needs, and characteristics of youth experiencing homelessness  This is consistent with the Runaway and Homeless Youth Act's directive for HHS to conduct a study of youth homelessness  As noted, this study— Voices of Youth Count —received funding from FY2016 HUD appropriations  In addition, HHS has supported other research on homeless youth, including factors associated with prolonged homelessness and risk factors for homelessness among children and youth with involvement in child welfare  In 2018, the USICH issued a brief that outlines continued gaps in data on the homeless youth population, citing the need for greater understanding about the causes of youth homelessness and how youth enter and exit homelessness  Separately, the framework also outlined a strategy to strengthen and coordinate the capacity of federal, state, and local systems to work toward ending youth homelessness  USICH has provided guidance to communities, including by establishing community-level criteria for ending homelessness and accompanying benchmarks to assess whether they have achieved an end to youth homelessness  Still, the 2018 USICH brief called for greater evidence regarding the impact of housing and service interventions in helping youth exit homelessness  As mentioned, the Runaway and Homeless Youth Program is administered by the Family and Youth Services Bureau (FYSB) within HHS's Administration for Children and Families (ACF)  The Runaway and Homeless Youth Act includes three authorizations of appropriations  The authorization of appropriations for the Basic Center Program and Transitional Living program is $127 4 million for each of FY2019 and FY2020  Under the law, 90% of the federal funds appropriated under the two programs must be used for the BCP and TLP (together, the programs and their related activities are known as the Consolidated Runaway and Homeless Youth program)  Of this amount, 45% is reserved for the BCP and no more than 55% is reserved for the TLP  The remaining share of consolidated funding is allocated for (1) a national communication system to facilitate communication between service providers, runaway youth, and their families (National Safeline); (2) training and technical support for grantees; (3) evaluations of the programs; (4) federal coordination efforts on matters relating to the health, education, employment, and housing of these youth; and (5) studies of runaway and homeless youth  The authorization of appropriations for the Street Outreach program is $25 million for each of FY2019 and FY2020  Although the SOP is a separately funded component, SOP services are coordinated with those provided under the BCP and TLP  The authorization of appropriations for the periodic estimate of incidence and prevalence of youth homelessness is such sums as may be necessary for FY2019 and FY2020  Funding has not been provided by HHS under this authority, and as noted, funds appropriated to HUD for this purpose have been used to support Voices of Youth Count  Table 1 shows funding levels for the Runaway and Homeless Youth Program from FY2006 through FY2019  Over this period, funding has increased notably for the program three times, most recently from FY2017 to FY2018  Congress has provided some guidance on how the additional funds are to be spent  In the conference report to accompany the FY2019 consolidated appropriations act, Congress stated that the increase should be provided to current TLP grantees whose awards end on March 31, 2019  The funding is to be used to continue services until new awards are made to those grantees, or for those grantees that did not receive a new grant, to provide services until the end of FY2019  Funding may then be used for additional new awards  The Basic Center Program is intended to provide short-term shelter and services for youth and their families at centers operated by BCP grantees, which are public and private community-based organizations  Youth eligible to receive BCP services include those youth who are at risk of running away or becoming homeless (and may live at home with their parents), or have already left home, either voluntarily or involuntarily  To stay at the shelter, youth must be under age 18, or an older age if the BCP center is located in a state or locality that permits this higher age  Some centers may serve homeless youth through street-based services, home-based services, and drug abuse education and prevention services  Grantees seek to connect youth with their families, whenever possible, or to locate appropriate alternative placements  They also provide individual or group and family counseling, health care, education, and employment assistance  As specified in the law, BCP grantees or centers are intended to provide services as an alternative to involving runaway and homeless youth in the law enforcement, juvenile justice, child welfare, and mental health systems  Youth may stay in a center continuously up to 21 days  In FY2017, the program served 23,288 youth, and in FY2018 it funded 280 BCP shelters (most recent figures available)  These centers, which can shelter as many as 20 youth, are generally supposed to be located in areas that are frequented or easily reached by runaway and homeless youth  BCP grantees must make efforts to contact the parents and relatives of runaway and homeless youth  Grantees are also required to establish relationships with law enforcement, health and mental health care, social service, welfare, and school district systems to coordinate services  Grantees maintain confidential statistical records of youth, including youth who are not referred to out-of-home shelter services  Further, grantees are required to submit an annual report to HHS detailing the program activities and the number of youth participating in such activities, as well as information about the operation of the centers  BCP grants are allocated directly to grantees for a three-year period  Funding is generally distributed to entities based on the proportion of the nation's youth under age 18 in the jurisdiction where the entities are located  The 50 states, the District of Columbia, and Puerto Rico each receive a minimum allotment of $200,000  Separately, the territories (currently, this includes American Samoa and Guam) each receive a minimum of $70,000  The amount of funding for each state or territory can further depend on whether grant applicants in that jurisdiction applied for funding, and if so, whether the applicant fulfilled the requirements in the authorizing law and grant application  For example, the authorizing law directs HHS to give priority to applicants who have demonstrated experience in providing services to runaway and homeless youth  HHS is to re-allot any funds designated for grantees in one state to grantees in other states that will not be obligated before the end of a fiscal year  See Table A-1 for the amount of funding allocated for each state in FY2017 and FY2018  The costs of the BCP are shared by the federal government (90%) and grantees (10%)  In FY2008, HHS began funding a three-year Rural Host Homes Demonstration Project , which was initiated to expand BCP shelter and support services to runaway and homeless youth who live in rural areas not served by shelter facilities  The project supported grantees that provided youth with shelter (via host home families who were recruited, screened, and trained) and preventive services, including transportation, counseling, educational assistance, and aftercare planning, among others  Over the course of the three years, the project served 781 youth, 411 of whom received shelter and 370 of whom received preventive services without shelter  Recognizing the difficulty that youth face in becoming self-sufficient adults, the Transitional Living Program provides longer-term shelter and assistance for youth ages 16 through 22 (or older if the youth entered the TLP prior to reaching age 22) who may leave their biological homes due to family conflict, or have left and are not expected to return home  Pregnant and/or parenting youth are eligible for TLP services  In FY2017, the TLP provided services to 3,517 youth  In FY2018, the program funded 229 organizations  Each TLP grantee may shelter up to 20 youth at various sites, such as host family homes, supervised apartments owned by a social service agency, scattered-site apartments, or single-occupancy apartments rented directly with the assistance of the grantee  Youth may remain at TLP sites for up to 540 days (18 months), or longer for youth under age 18  Youth ages 16 through 22 may remain in the program for a continuous period of 635 days (approximately 21 months) under "exceptional circumstances " This term means circumstances in which a youth would benefit to an unusual extent from additional time in the program  A youth in a TLP who has not reached age 18 on the last day of the 635-day period may, in exceptional circumstances and if otherwise qualified for the program, remain in the program until his or her 18 th birthday  Youth receive several types of services at TLP-funded programs: basic life-skills training, including consumer education and instruction in budgeting and the use of credit; parenting support and child care (as appropriate); building interpersonal skills; educational opportunities, such as GED courses and postsecondary training; assistance in job preparation and attainment; and mental and physical health care services  TLP grantees are required to develop a written plan designed to help youth transition to living independently or another appropriate living arrangement, and they are to refer youth to other systems that can help to meet their educational, health care, and social service needs  The grantees must also submit an annual report to HHS that includes information regarding the activities carried out with funds and the number and characteristics of the homeless youth  As part of the FY2002 budget request, the George W  Bush Administration proposed a $33 million initiative to fund maternity group homes—or centers that provide shelter to pregnant and parenting teens who are vulnerable to abuse and neglect—as a component of the TLP  Although the TLP authorized services for pregnant and parenting teens prior to FY2002, the Bush Administration sought funds specifically to serve this population  Increased funds were ultimately provided to enable these youth to access TLP services  The 2003 amendments to the Runaway and Homeless Youth Act ( P L  108-96 ) provided explicit authority to use TLP funds for this purpose  Since FY2004, funding for adult-supervised transitional living arrangements that serve pregnant or parenting women ages 16 to 21 and their children has been awarded to organizations that receive TLP grants  These organizations provide youth with parenting skills, including child development education, family budgeting, health and nutrition, and other skills to promote family well-being  TLP grants are distributed competitively by HHS to community-based public and private organizations throughout the country for a five-year period  Grantees must provide at least 10% of the total cost of the program  HHS is carrying out a study to learn more about the long-term outcomes of 1,250 youth who have used TLP services  The study seeks to describe the outcomes and to isolate and describe promising practices and other factors that may contribute to their successes or challenges  Of particular interest for the study is how services are delivered, the demographics of youth, and their socio-emotional wellness and life experiences  It involves both a process evaluation and impact evaluation, with youth randomly assigned to the treatment (i e , participation in the TLP) and control groups  The study seeks to address the following questions: (1) How do TLP programs operate, what types of program models are used to deliver services, and what services are delivered to homeless youth? (2) What are the long-term housing outcomes and protective factors for youth who participate in the TLP program immediately, six months, 12 months, and 18 months after exiting the program? (3) What interventions can be attributed to any positive outcomes experienced by youth who participate in the TLP? According to HHS, the pilot study revealed challenges "in collecting data from a large enough sample size of youth to detect any effects so that conclusions could be drawn about the impact of homeless youth served by TLPs " HHS is not certain how it will move forward with the study  In FY2016, HHS began the Transitional Living Program Special Population Demonstration project  The project funded nine grantees over a two-year period that tested approaches for serving populations that need additional support: LGBTQ runaway and homeless youth ages 16 to 21; and young adults who have left foster care because of emancipation  Grantees were expected to provide strategies that help youth build protective factors, such as connections with schools, employment, and appropriate family members and other caring adults  According to HHS, a process evaluation will assess how grantees are implementing the demonstration project  HHS separately funded a project from FY2012 through FY2014 to build the capacity of TLPs in serving LGBTQ youth  Known as the 3/40 Blueprint: Creating the Blueprint to Reduce LGBTQ Youth Homelessness , the purpose of the grant was develop information about serving the LGBTQ youth population experiencing homelessness, such as through efforts to identify innovative intervention strategies, determine culturally appropriate screening and assessment tools, and better understand the needs of LGBTQ youth served by RHY providers  The website developed by the grantee, the University of Illinois at Chicago, identifies promising practices that serve LGBTQ youth who are experiencing homelessness and publishes information about their challenges  In FY2009, HHS began the Support Systems for Rural Homeless Youth Demonstration Project   Six states received grants to support TLPs in rural communities in serving young adults who have few or no connections to a supportive family structure or community resources  The five-year project sought to provide services across three main areas: survival support, which includes housing, health care (including mental health), and substance abuse treatment and prevention; community, which includes community service, youth and adult partnerships, mentoring, and peer support groups; and education and employment, which includes high school or GED completion, postsecondary education, and job training and employment  The six states—Colorado, Iowa, Minnesota, Nebraska, Oklahoma, and Vermont—each received annual grants of $200,000  According to HHS, all of the sites engaged youth in positive youth development activities that included safe places for youth to go  In addition, they raised awareness about homelessness in rural areas and addressed some of the unique needs around employment, housing, and transportation  However, the sites also confirmed that there is a general lack of available housing for homeless youth and that transportation was the most critical impediment to serving these youth  The Street Outreach Program provides runaway and homeless youth living on the streets or in areas that increase their risk of using drugs or being subjected to sexual abuse, prostitution, sexual exploitation, and trafficking are eligible to receive services  The program's goal is to assist youth in transitioning to safe and appropriate living arrangements  SOP services include the following: treatment and counseling; crisis intervention; drug abuse and exploitation prevention and education activities; survival aid; street-based education and outreach; information and referrals; and follow-up support  Grants are awarded for a three-year period, and grantees must provide 10% of the funds to cover the cost of the program  In FY2018, 96 grantees were funded  In FY2017 grantees made contact with 24,366 youth  The Family and Youth Services Bureau initiated the Street Outreach Program Data Collection Project in 2012 to learn more about the lives and needs of homeless and runaway youth served by SOP grantees  The purpose of the project was to design services to better meet the needs of these youth  FYSB collected information through focus groups and computer-assisted personal interviews with 656 youth (ages 14 to 21 years) served by grantees in 11 cities  The project found that participants were homeless on average for nearly two years and had challenges with substance abuse, mental health, and exposure to trauma  Youth most identified that they were in need of job training or help finding a job, transportation assistance, and clothing  The top barriers to obtaining shelter were shelters being full, not knowing where to go for shelter, and lacking transportation to get to a shelter  The study researchers concluded that more emergency shelters could help prevent youth from sleeping on the street  Further, they noted that youth on the streets need more intensive case management (e g , careful assessment and treatment planning, linkages to community resources, etc ) and more intensive interventions  HHS funds the Runaway and Homeless Youth Training and Technical Assistance Center (RHYTTAC) to provide technical assistance to RHYP grantees  HHS awarded a five-year cooperative agreement, from September 30, 2017, through September 29, 2020, to National Safe Place to operate RHYTTAC  National Safe Place is a national youth outreach program that aims to educate young people about the dangers of running away or trying to resolve difficult, threatening situations on their own  RHYTTAC is designed to provide training and conference services to RHYP grantees that enhance and promote continuous quality improvement to services provided by RHYP grantees  Further, RHYTTAC offers resources and information through its website, tip sheets, a quarterly newsletter, toolkits, sample policies and procedures, and other resources  RHYTTAC also provides assistance to individual grantees in response to their questions or concerns, as well as concerns raised by HHS as part of the Runaway and Homeless Youth Program Monitoring System (see subsequent section)  A portion of the funds for the BCP, TLP, and related activities are allocated for a national communications system known as the National Runaway Safeline ("Safeline")  The Safeline is intended to help homeless and runaway youth (or youth who are contemplating running away) through counseling, referrals, and communicating with their families  Beginning with FY1974 and every year after, the Safeline, which until 2013 was called the National Runaway Switchboard, has been funded through the Basic Center Program grant or the Consolidated Runaway and Homeless Youth Program grant  The Safeline is located in Chicago and operates each day to provide services to youth and their families across the country  Services include (1) a channel through which runaway and homeless youth or their parents may leave messages; (2) 24-hour referrals to community resources, including shelter, community food banks, legal assistance, and social services agencies; and (3) crisis intervention counseling to youth  In calendar year 2017, the Safeline handled nearly 30,000 contacts with youth (via phone, computer, emails, and postings), of which nearly three-quarters were from youth and 9% were from parents; the other callers were relatives, friends, and others  Other services are also provided through the Safeline  Since 1995, the "Home Free" family reunification program has provided bus tickets for youth ages 12 to 21 to return home or to an alternative placement near their home through Home Free  HHS evaluates each RHYP grantee through the Runaway and Homeless Youth Monitoring System  Staff from regional ACF offices and other grant recipients (known as peer reviewers) inspect the program site, conduct interviews, review case files and other agency documents, and conduct entry and exit conferences  The monitoring team then prepares a written report that identifies the strengths of the program and areas that require corrective action  The Reconnecting Homeless Youth Act of 2008 required that within one year of its enactment (October 8, 2009), HHS was to issue rules that specified performance standards for public and nonprofit entities that receive BCP, TLP, and SOP grants  On April 14, 2014, HHS issued a notice of proposed rulemaking (NPRM) for the new performance standards and other requirements for the Runaway and Homeless youth program grantees  On December 20, 2016, HHS implemented a final rule that was similar to the provisions in the NPRM  These standards are used to monitor individual grantee performance  The Senate Committee on Health, Education, Labor, and Pensions (HELP) and the House Committee on Education and Labor have exercised jurisdiction over the Runaway and Homeless Youth Program  HHS must submit reports biennially to the committees on the status, activities, and accomplishments of program grant recipients and evaluations of the programs performed by HHS  The most recent report was submitted in January 2018, and covered FY2014 and FY2015  The 2003 reauthorization law ( P L  108-96 ) of the Runaway and Homeless Youth Act required that HHS, in consultation with the U S  Interagency Council on Homelessness, submit a report to Congress on the promising strategies to end youth homelessness within two years of the reauthorization, in October 2005  The report was submitted to Congress in June 2007  As mentioned above, the 2008 reauthorization law ( P L  110-378 ) required HHS, as of FY2010, to periodically submit to Congress an incidence and prevalence study of runaway and homeless youth ages 13 to 26, as well as the characteristics of a representative sample of these youth  As discussed, Congress appropriated funding to HUD for this purpose and the study, known as Voices of Youth Count , includes multiple publications about its findings  The 2008 law also directed the Government Accountability Office (GAO) to evaluate the process by which organizations apply for BCP, TLP, and SOP, including HHS's response to these applicants  GAO submitted a report to Congress in May 2010 on its findings  GAO found weaknesses in several of the procedures for reviewing grants, such as that peer reviewers for the grant did not always have expertise in runaway and homeless youth issues and feedback on grants was not provided in a permanent record  In addition, GAO found that HHS delayed telling successful grantees that the grant had been awarded to them  HHS has implemented the recommendations made in the report  Appendix A  Basic Center Program (BCP) Funding Appendix B  Additional Federal Support for Runaway and Homeless Youth Since the creation of the Runaway and Homeless Youth Program, other federal initiatives have also established services for such youth  Youth Homelessness Demonstration Program (YHDP): The omnibus appropriations laws for FY2016 through FY2018 enabled HUD to set aside up to $33 million (FY2016), $43 million (FY2017), and $80 million (FY2018) from the Homeless Assistance Grants account to implement projects that demonstrate how a "comprehensive approach" can "dramatically reduce" homelessness for youth through age 24  The appropriations laws each fiscal year direct this funding to up to 10 communities with the FY2016 funding; up to 11 communities with the FY2017 funding, including at least five rural communities; and up to 25 communities with the FY2018 funding, including at least eight rural communities  HUD has allocated $33 million to 10 communities for FY2016 and $43 million for FY2017  In addition, HUD is taking steps to evaluate the YHDP grantee communities in developing and carrying out a coordinated community approach to preventing and ending youth homelessness  100-Day Challenges to End Youth Homelessness : Since 2016, cities have partnered with public and private entities to accelerate efforts to prevent and end youth homelessness  A Way Home America and Rapid Results Institute, organizations that focus on pressing social problems, have provided support to the organizations  HHS provided training and technical assistance through RHYTTAC to the first three cities involved in the challenge: Los Angeles, CA; Cleveland, OH; and Austin, TX  In general, participating communities have housed homeless youth and have identified new housing options for this population  Youth with Child Welfare Involvement At-Risk of Homelessness (YAHR): HHS has funded grants to build evidence on what works to prevent homelessness among youth and young adults who have child welfare involvement  HHS awarded funds to 18 grantees for a two-year planning period (2013-2015)  Six of the grantees received additional funding to refine and test their service models during a second phase (2015-2018)  A subset of those grantees will then be selected to conduct a rigorous evaluation of their impact on homelessness  In school year 2016-2017, more than 1 3 million children and youth were homeless  Of these students, over 118,000 were homeless youth unaccompanied by their families  The Department of Education administers the Education for Homeless Children and Youth program, which was established under the McKinney-Vento Homeless Assistance Act of 1987 ( P L  100-77 ), as amended  This program assists state education agencies (SEAs) to ensure that all homeless children and youth have equal access to the same, appropriate education, including public preschool education, that is provided to other children and youth  Grants made by SEAs to local education agencies (LEAs) under this program must be used to facilitate the enrollment, attendance, and success in school of homeless children and youth  Program funds may be appropriated for activities such as tutoring, supplemental instruction, and referral services for homeless children and youth, as well as providing them with medical, dental, mental, and other health services  McKinney-Vento liaisons for homeless children and youth in each LEA is responsible for coordinating activities for these youth with other entities and agencies, including local Basic Center and Transitional Living Program grantees  States that receive McKinney-Vento funds are prohibited from segregating homeless students from non-homeless students, except for short periods of time for health and safety emergencies or to provide temporary, special, supplemental services  FY2019 funding for the program is $93 5 million  According to a 2017 survey of 43,000 college students at selected colleges and universities, 9% of those attending four-year universities and 12% of those attending community college had been homeless in the last year  In addition, 37% of university students and 46% of community college students were housing insecure in the past year, meaning that they had difficulty paying rent or lived with others beyond the expected capacity of the housing, among other scenarios  The Higher Education Act (HEA) authorizes financial aid and support programs that target homeless students and other vulnerable populations  For purposes of applying for federal financial aid, a student's expected family contribution (EFC) is the amount that can be expected to be contributed by a student and the student's family toward his or her cost of education  Certain groups of students are considered "independent," meaning that only the income and assets of the student (and not their parents or guardians) are counted  Individuals under age 24 who have been verified during the school year as either (1) unaccompanied and homeless or (2) unaccompanied, self-supporting, and risk of homelessness  This verification can come from a McKinney-Vento liaison for homeless children and youth in the local education agency; the director (or designee) of a program funded under the Runaway and Homeless Youth program; the director (or designee) of an emergency shelter or transitional housing program funded by HUD; or a financial aid administrator  Separately, HEA provides that homeless children and youth are eligible for what are collectively called the federal TRIO programs  This includes the following TRIO programs: Talent Search, Upward Bound, Student Support Services, and Educational Opportunity Centers  The TRIO programs are designed to identify potential postsecondary students from disadvantaged backgrounds, prepare these students for higher education, provide certain support services to them while they are in college, and train individuals who provide these services  HEA directs the Department of Education (ED), which administers the programs, to (as appropriate) require applicants seeking TRIO funds to identify and make services available, including mentoring, tutoring, and other services, to these youth  TRIO funds are awarded by ED on a competitive basis  In addition, HEA authorizes services for homeless youth through TRIO Student Support Services—a program intended to improve the retention and graduation rates of disadvantaged college students—that include temporary housing during breaks in the academic year  In FY2019, TRIO appropriations are $1 1 billion  Separately, HEA allows additional uses of funds through the Fund for the Improvement of Postsecondary Education (FIPSE) to establish demonstration projects that provide comprehensive support services for students who are or were homeless at age 13 or older  FIPSE is a grant program that seeks to support the implementation of innovative educational reform ideas and evaluate how well they work  As specified in the law, the projects can provide housing to the youth when housing at an educational institution is closed or unavailable to other students  FY2019 appropriations for FIPSE are $5 million  Recently emancipated foster youth are vulnerable to becoming homeless  In FY2017, nearly 20,000 youth "aged out" of foster care  The Chafee Foster Care Independence Program (CFCIP), created under the Chafee Foster Care Independence Act of 1999 ( P L  106-169 ), provides states with funding to support children and youth ages 14 to 21 who are in foster care and former foster youth ages 18 to 21 (and up to age 23 in states that extend foster care to age 21)  States are authorized to receive funds based on their share of the total number of children in foster care nationwide  However, the law's "hold harmless" clause precludes any state from receiving less than the amount of funds it received in FY1998 or $500,000, whichever is greater  The program specifies funding for transitional living services, and as much as 30% of the funds may be dedicated to room and board  The program is funded through mandatory spending, and as such $140 million ($143 million as of FY2020) is provided for the program each year through the annual appropriations process  The Family Violence Prevention and Services Act (FVPSA), Title III of the Child Abuse Amendments of 1984 ( P L  98-457 ), authorized funds for Family Violence Prevention and Service grants that work to prevent family violence, improve service delivery to address family violence, and increase knowledge and understanding of family violence  From FY2007 to FY2009, one of these projects focused on runaway and homeless youth in dating violence situations through HHS's Domestic Violence/Runaway and Homeless Youth Collaboration on the Prevention of Adolescent Dating Violence initiative  The initiative was created because many runaway and homeless youth come from homes where domestic violence occurs and may be at risk of abusing their partners or becoming victims of abuse  The initiative funded eight states and community-based organizations to address the issue of teen dating violence among runaway and homeless youth  The grants funded activities such as curriculum on dating violence, small groups for teens, and a sexual assault/dating violence reduction program  The initiative resulted in an online toolkit for advocates in the runaway and homeless youth and domestic and sexual assault fields to help programs better address relationship violence with runaway and homeless youth 
Report 2:  Treasury completed its regulations for C corporation banks first  For C corporations, SBLF funds are treated as Tier I capital and the Treasury purchases senior perpetual noncumulative preferred stock (or an equivalent)  The stock pays a quarterly dividend on the first day of each quarter after closing of the SBLF capital program funding  Tier 1 capital is the core measure of a bank's financial strength from a regulator's point of view  It is composed of core capital, which consists primarily of common stock and disclosed reserves (or retained earnings) but may also include nonredeemable, noncumulative preferred stock  In contrast, S corporations and mutual lending institutions receive unsecured subordinated debentures from the Treasury, which are considered Tier 2 capital for regulatory capital requirements  The application deadline for C corporation banks was May 16, 2011  The application deadline for Subchapter S corporations and mutual lending institutions was June 6, 2011, and the application deadline for CDFIs was June 22, 2011  A total of 926 institutions applied for $11 8 billion in SBLF funding  Treasury approved more than $4 0 billion in SBLF financing to 332 lending institutions ($3 9 billion to 281 community banks and $104 million to 51 CDFIs)  SBLF recipients have offices located in 47 states and the District of Columbia  The average financing was $12 1 million, ranging from $42,000 to $141 0 million  Of the 332 lending institutions which received financing, 137 institutions had participated in TARP's Community Development Capital Initiative or its Capital Purchase Program  These institutions received nearly $2 7 billion in SBLF financing (66 8% of the total)  Treasury is required to publish monthly reports describing all transactions made under the SBLF program during the reporting period  It is also required to publish a semiannual report (each March and September) providing all projected costs and liabilities, operating expenses, and transactions made by the SBLF, including a list of all participating institutions and the amounts each institution has received under the program  Treasury must also publish a quarterly report describing how participating institutions have used the funds they have received  SBLF participants must submit an initial supplemental report to Treasury no later than five business days before closing  The report provides information from the institution's FDIC call reports or, for holding companies, from their subsidiaries' FDIC call reports, that Treasury uses to establish an initial baseline for measuring the SBLF participants' progress in making loans to small businesses  The initial baseline is the average amount of qualified small business lending that was outstanding for the four full quarters ending on June 30, 2010  It is derived by first adding the outstanding amount of lending reported for all commercial and industrial loans, owner-occupied nonfarm, nonresidential real estate loans, loans to finance agricultural production and other loans to farmers, and loans secured by farmland  Then, the outstanding amount of lending for large loans (defined as any loan or group of loans greater than $10 million), loans to large businesses (defined as businesses with annual revenues greater than $50 million), and the portion of any loans guaranteed by the U S  government or for which the risk is assumed by a third party is subtracted from that amount  The lending institution then adds back any cumulative charge-offs with respect to such loans since July 1, 2010  This last adjustment is done to prevent lending institutions from being penalized for appropriately charging off loans  Each SBLF participant's small business lending baseline is also adjusted to take into account any gains in qualified small business lending during the four baseline quarters resulting from mergers, acquisitions, and loan purchases  This adjustment is designed to ensure that dividend rate reductions provided to any SBLF participant correspond to additional lending to small businesses and not to the acquisition of existing loans  In addition, the cumulative baseline for all SBLF participants will decrease over time as SBLF participants repay their SBLF loans and exit the program  For example, the initial small business lending baseline for the 332 SBLF participants as of March 31, 2011, was $35 52 billion ($34 75 billion for 281 banks and $770 48 million for 51 CDFIs)  The small business lending baseline for the 50 institutions that continued to participate in the SBLF as of December 31, 2018, was $1 5 billion ($808 8 million for 7 banks and $714 5 million for 43 CDFIs)  Table 3 provides the number and type of SBLF participating institutions, the small business lending baseline, the amount of small business lending by participants, the change in small business lending by participants, and the change in small business lending by both current and former participants from 2011 to 2018  The number of SBLF participating institutions is declining as institutions repay their loans and exit the program  As Treasury anticipated, this decline has accelerated following the first quarter of 2016 because the dividend rates for C corporation banks and savings associations and for S corporation banks and mutual lending institutions were increased at that time (to 9% and 13 8%, respectively)  SBLF institutions are also required to submit quarterly supplemental reports, due in the calendar quarter following submission of the initial supplemental report and in each of the next nine quarters, to determine their dividend rate for the next quarter  Using information contained in the quarterly supplemental reports, Treasury announced in its April 2019 quarterly report on SBLF Participants' Small Business Lending Growth that, as of December 31, 2018 The 50 current SBLF participants (7 banks and 43 CDFIs) increased their small business lending by $1 347 billion over a $1 523 billion baseline  Since inception, the total increase in small business lending reported by both current and former SBLF participants is more than $19 1 billion over the baseline  All seven of the currently participating community banks and 39 of the 43 currently participating CDLFs increased their small business lending over baseline levels  Most current participants report that their small business lending increases have been substantial, with 43 of 50 current SBLF participants (86 0%) increasing small business lending by 10% or more  Treasury officials have praised the SBLF's performance  For example, on October 9, 2012, then-Deputy Secretary of the Treasury Neal Wolin announced that the SBLF quarterly use of funds report released that day "is further indication that the Administration's Small Business Lending Fund is continuing to help create an environment in which entrepreneurial small businesses can succeed and excel " He added that "banks in the SBLF program continue to show large increases in the lending available for small businesses to grow, create jobs, and support families in communities across the country " Some financial commentators have expressed a somewhat less sanguine view of the program's performance  For example, one commentator noted, after the release of the quarterly use of funds report in January 2012, that although the report of increased small business lending was positive news "it is difficult to isolate the proportion of new lending that would have occurred anyway" due to improvements in the economy  Another commentator noted that the data may have been skewed by SBLF participants who were entering the small business lending market for the first time, making the increases appear larger and more significant than they actually are; yet another noted that the reported growth in small business lending occurred over six quarters (since June 30, 2010) and that the results, although positive, are "not as impressive as it may seem " A commentator argued in September 2012 that "if the SBLF ends up being a success story, it will have been on a far smaller scale than either Obama or Congress had originally expected  What's more, it's become clear that even boatloads of financing won't change the fact that demand for the loans themselves has also fallen off, as small businesses themselves are reluctant to expand in a stagnant economy " In addition, on August 29, 2013, Treasury's Office of Inspector General (OIG) released an audit of Treasury's reporting of small business lending gains relative to small business lending levels prior to the lenders' participation in the program  The OIG found that "small business lending gains reported by Treasury are significantly overstated and cannot be linked directly to SBLF funding " Specifically, the OIG noted that "substantial amounts [$3 4 billion of the then reported $8 9 billion] of the reported gains occurred prior to participants receiving SBLF funding " As the OIG explained, the lending gains reported [by Treasury] were measured against the same baseline period that the Small Business Jobs Act of 2010 (the Act) instructs Treasury to use for setting dividend rates for repayment of the SBLF capital, which is the four calendar quarters [which] ended [on] June 30, 2010  However, measuring program performance against a baseline with a midpoint seven quarters prior to when most participants received funding inflates program accomplishments and is not responsive to provisions in the Act that direct Treasury to report on participant use of the SBLF funds received  The OIG also argued that the reported lending gains cannot be directly linked to the SBLF capital that Treasury invested in the financial institutions because the lending gains reported "represent all small business lending gains that institutions participating in the SBLF achieved, regardless of how the loans were funded " In addition, the OIG noted, among other findings, that "a relatively small number (35 or 11%) of SBLF participants accounted for half of small business lending increases between the baseline figure and December 31, 2012 " During the 112 th Congress, several bills were introduced to change the SBLF  None of the bills were enacted  For example, then-Senator Snowe introduced S  681 , the Greater Accountability in the Lending Fund Act of 2011, on March 30, 2011  Senator Snowe argued that While I would prefer to terminate this fund altogether, it is unlikely based on the current political environment, which is why we must work to protect taxpayers from some of its most egregious provisions  My goal with this legislation is to ensure that only healthy banks have access to taxpayer money, that they are required to repay loans within a reasonable period of time, and that small businesses find the affordable credit they need  The bill would have, among other things, required recipients to repay SBLF distributions within 10 years of the receipt of the investment; terminated the program no later than 15 years after the date of the bill's enactment; prohibited the Secretary of the Treasury from making capital investments under the program if the FDIC is appointed receiver of 5% or more of the institutions receiving an investment under the program; prohibited participation by any institution that received an investment under TARP (effective on the date of the bill's enactment); removed provisions allowing the Secretary of Treasury to make a capital investment in institutions that would otherwise not be recommended to receive the investment based on the institution's financial condition, but are able to provide a matching investment from private, nongovernmental investors; required the approval of appropriate financial regulators when determining whether an institution should receive a capital investment; and revised the benchmark against which changes in the amount of small business lending is measured from the four full quarters immediately preceding the date of enactment to calendar year 2007  In addition, H R  1387 , the Small Business Lending Fund Accountability Act of 2011, would have provided the Special Inspector General for TARP responsibility for providing oversight over the SBLF  S Amdt  279 to S  493 , the Small Business Innovation Research, Small Business Technology Transfer Reauthorization Act of 2011, would have prevented TARP recipients from using funds received in any form under any other federal assistance program, including the SBLF program  H R  2807 , the Small Business Leg-Up Act of 2011, would have transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund beginning on the date when the Secretary of the Treasury's authority to make capital investments in eligible institutions expired (on September 27, 2011)  The bill's stated intent was "to increase the availability of credit for small businesses " H R  3147 , the Small Business Lending Extension Act, would have extended the Department of the Treasury's investment authority from one year following enactment to two years and required the Treasury Secretary to provide any institution not selected for participation in the program the reason for the rejection, ensure that the rejection reason remains confidential, and establish an appeal process that provides the institution an opportunity to contest the reason provided for the rejection of its application  During the 113 th Congress, H R  2474 , the Community Lending and Small Business Jobs Act of 2013, would have, among other provisions, transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund  The SBLF was enacted as part of a larger effort to enhance the supply of capital to small businesses  Advocates argued that the SBLF would help to address the decline in small business lending and create jobs  Opponents were not convinced that it would enhance small business lending and worried about the program's potential cost to the federal treasury and its similarities to TARP  Participating institutions are reporting they have increased their small business lending  However, as has been discussed, questions have been raised concerning the validity of these reported amounts  Specifically, as Treasury's OIG argued in its August 2013 audit, more than one-third of the reported lending gains at that time occurred prior to September 30, 2011, the quarter in which most SBLF participants received their SBLF funds; the reported small business lending gains reflect all of the small business lending gains that the participants achieved, regardless of how the loans were funded; and previous OIG audits "have shown that a large number of participants misreport their small business lending activity " In those previous audits, "50% or more of the institutions reviewed submitted erroneous lending data to Treasury, either overstating or understating their small business lending gains " In addition to questions related to the validity of the reported small business lending gains, any analysis of the program's influence on small business lending is likely to be more suggestive than definitive because differentiating the SBLF's effect on small business lending from other factors, such as changes in the lender's local economy, is methodologically challenging, especially given the relatively small amount of financing involved relative to the national market for small business loans  The SBLF's $4 0 billion in financing represents less than 0 7% of outstanding small business loans (as defined by the FDIC)  In terms of the concerns expressed about the program's potential cost, Treasury initially estimated in December 2010 that the SBLF could cost taxpayers up to $1 26 billion (excluding administrative costs that were initially estimated at about $26 million annually but actual outlays were $4 54 million in FY2014, $9 05 million in FY2015, $5 01 million in FY2016, and $3 4 million in FY2017)  Treasury based that estimate on an expectation that about $17 billion in SBLF financings would be disbursed  In October 2011, Treasury estimated the program's costs based on actual participant data  It estimated that the SBLF would generate a savings of $80 million (excluding administrative costs), with the savings coming primarily from a lower-than-expected financing level and, to a lesser extent, improvements in projected default rates "due to higher participant quality than expected" and lower market interest rates  Treasury issues a semiannual report on SBLF costs  In its latest semiannual cost report, released on August 16, 2018, Treasury estimated that the SBLF will "generate a lifetime positive return of $31 million [excluding administrative costs] for the Treasury General Fund " One issue that arose relative to the program's projected cost is the noncumulative treatment of dividends  Treasury's OIG reported in May 2011 that Under the terms set by legislation, dividend payments are non-cumulative, meaning that institutions are under no obligation to make dividend payments as scheduled or to pay off previously missed payments before exiting the program  This dividend treatment differs from the TARP programs, in which many dividend payments were cumulative  This change in dividend treatment was driven by changes in capital requirements mandated by the Collins Amendment to the Dodd-Frank Act  The amendment equalizes the consolidated capital requirements for Tier 1 capital of bank holding companies by requiring that, at a minimum, regulators apply the same capital and risk standards for FDIC-insured banks to bank holding companies  Under TARP, the FRB [Federal Reserve Board] and FDIC treated capital differently at the holding company and depository institution levels  The FRB treated cumulative securities issued by holding companies as Tier 1 capital, while FDIC treated non-cumulative securities issued by depository institutions as Tier 1 capital  In order to comply with the Dodd-Frank Act requirement that securities purchased from holding companies receive the same capital treatment as those purchased from depository institutions, Treasury made the dividends under SBLF non-cumulative  Additionally, given that Tier 1 capital must be perpetual and cannot have a mandatory redemption date, the 10-year repayment period in the Small Business Jobs Act cannot be enforced  Treasury addressed this issue by placing the following additional requirements and restrictions on participants who miss dividend payments: the participant's CEO [Chief Executive Office] and CFO [Chief Financial Officer] must provide written notice regarding the rationale of the board of directors (BOD) for not declaring a dividend; no repurchases may be affected and no dividends may be declared on any securities for the applicable quarter and the following three quarters; after four missed payments (consecutive or not), the issuer's BOD must certify in writing that the issuer used best efforts to declare and pay dividends appropriately; after five missed payments (consecutive or not), Treasury may appoint a representative to serve as an observer on the issuer's BOD; and after six missed payments (consecutive or not), Treasury may elect two directors to the issuer's BOD if the liquidation preference is $25 million or more  Treasury's OIG agreed that Treasury's equity investment policy is consistent with the legislation and that "it has reasonably structured the program to incentivize payment of dividends " However, it recommended that "Congress consider whether an amendment to the Small Business Jobs Act and/or waiver from the Collins Amendment to the Dodd-Frank Act is needed to make the repayment of dividends a requirement for exiting the program " In conclusion, congressional oversight of the SBLF is currently focused on the program's potential long-term costs and effects on small business lending  Underlying those concerns are fundamental disagreements regarding the best way to assist small businesses  Some advocate the provision of additional federal resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs  Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit  They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses and create jobs  The SBLF's Legislative Origin On March 16, 2009, President Obama announced the first SBLF-like proposal  Under that proposal, the Department of the Treasury would have used TARP funds to purchase up to $15 billion of SBA-guaranteed loans  The purchases were intended to "immediately unfreeze the secondary market for SBA loans and increase the liquidity of community banks " The plan was dropped after it met resistance from lenders  Some lenders objected to TARP's requirement that participating lenders comply with executive compensation limits and issue warrants to the federal government  Smaller, community banks objected to the program's paperwork requirements, such as the provision of a small-business lending plan and quarterly reports  In his January 2010 State of the Union address, President Obama proposed the creation of a $30 billion SBLF to enhance access to credit for small businesses: When you talk to small business owners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they're mostly lending to bigger companies  Financing remains difficult for small business owners across the country, even those that are making a profit  Tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat  In response to the opposition community lenders had expressed concerning TARP's restrictions in 2009, the Obama Administration proposed that Congress approve legislation authorizing the transfer of up to $30 billion in TARP spending authority to the SBLF and statutorily establish the new program as distinct and independent from TARP and its restrictions  The Administration's legislative proposal was finalized and sent to Congress on May 7, 2010  Representative Barney Frank, then-chair of the House Committee on Financial Services, introduced H R  5297 , the Small Business Lending Fund Act of 2010, on May 13, 2010  The House Committee on Financial Services held a hearing on H R  5297 on May 18, 2010, and passed the bill, as amended to include a State Small Business Credit Initiative, the following day  The House passed the bill, as amended to include a Small Business Early-Stage Investment Program, a Small Business Borrower Assistance Program, and some small business tax reduction provisions, on June 17, 2010  The House-Passed Version of the SBLF Title I of the House-passed version of H R  5297 authorized the Secretary of the Treasury to establish a $30 billion SBLF "to address the ongoing effects of the financial crisis on small businesses by providing temporary authority to the Secretary of the Treasury to make capital investments in eligible institutions" with total assets equal to or less than $1 billion or $10 billion (as of the end of the fourth quarter of calendar year 2009) "in order to increase the availability of credit for small businesses " The authority to make capital investments in eligible institutions was limited to one year after enactment  Eligible financial institutions having total assets equal to or less than $1 billion as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the SBLF in an amount not exceeding 5% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application  During the fourth quarter of 2009, 7,340 FDIC-insured lending institutions reported having assets amounting to less than $1 billion  Eligible financial institutions having total assets equal to or less than $10 billion as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the fund in an amount not exceeding 3% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application  During the fourth quarter of 2009, 565 FDIC-insured lending institutions reported having assets of $1 billion to $10 billion  Risk-weighted assets are assets such as cash, loans, investments, and other financial institution assets that have different risks associated with them  FDIC regulations (12 C F R  §567 6) establish that cash and government bonds have a 0% risk-weighting; residential mortgage loans have a 50% risk-weighting; and other types of assets (such as small business loans) have a higher risk-weighting  Lending institutions on the FDIC problem bank list or institutions that have been removed from the FDIC problem bank list for less than 90 days were ineligible to participate in the program  Lending institutions could refinance securities issued through the Treasury Capital Purchase Program (CPP) and the Community Development Capital Incentive (CDCI) program under TARP, but only if the institution had not missed more than one dividend payment due under those programs  Participating banks would be charged a dividend rate of no more than 5% per annum initially, with reduced rates available if the bank increased its small business lending  For example, during any calendar quarter in the initial two years of the capital investments under the program, the bank's rate would be lowered if it had increased its small business lending compared to the average small business lending it made in the four previous quarters immediately preceding the enactment of the bill, minus some allowable adjustments  A 2 5% to less than 5% increase in small business lending would have lowered the rate to 4%, a 5% to less than 7 5% increase would have lowered the rate to 3%, a 7 5% to less than 10% increase would have lowered the rate to 2%, and an increase of 10% or greater would have lowered the rate to 1%  Table A-1 shows the dividend rates associated with small business lending increases for C corporation banks and savings institutions under H R  5297   These rates were subsequently included in the final law  The bill also authorized the Secretary of the Treasury to adjust these dividend rates for S corporations "to take into account any differential tax treatment of securities issued by such eligible institution " Also, Community Development Financial Institutions were to be charged a dividend rate of 2% per annum for eight years, and 9% thereafter  SBLF applicants were also required to submit a small business lending plan to the appropriate federal banking agency and, for applicants that are state-chartered banks, to the appropriate state banking regulator  The plan was to describe how the applicant's business strategy and operating goals will allow it to address the needs of small businesses in the areas it serves, as well as a plan to provide linguistically and culturally appropriate outreach, where appropriate  The plan was to be treated as confidential supervisory information  The Secretary of the Treasury was required to consult with the appropriate federal banking agency or, in the case of an eligible institution that is a nondepository community development financial institution, the Community Development Financial Institution Fund, before determining if the eligible institution was to participate in the program  The bill specified that the SBLF would be "established as separate and distinct from the Troubled Asset Relief Program established by the Emergency Economic Stabilization Act of 2008  An institution shall not, by virtue of a capital investment under the Small Business Lending Fund Program, be considered a recipient of the Troubled Asset Relief Program " The bill also directed that all funds received by the Secretary of the Treasury in connection with purchases made by the SBLF, "including interest payments, dividend payments, and proceeds from the sale of any financial instrument, shall be paid into the general fund of the Treasury for reduction of the public debt " The Senate-Passed Version of the SBLF Title IV of the Senate-passed version of H R  5297 , which later became law, authorized the Secretary of the Treasury to establish a $30 billion SBLF to make capital investments in eligible community banks with total assets equal to or less than $1 billion or $10 billion  There were several differences between the Senate-passed version of H R  5297 's SBLF provisions and the SBLF provisions in the House-passed version of H R  5297   Specifically, the House-passed version of H R  5297 indicated that eligible institutions may be insured depository institutions that are not controlled by a bank holding company or a savings and loan holding company that is also an eligible institution and is not directly or indirectly controlled by any company or other entity that has total consolidated assets of more than $10 billion, bank holding companies, savings and loan holding companies, community development financial institution loan funds, and small business lending companies, all with total assets of $10 billion or less (as of the end of 2009)  The Senate-passed version of H R  5297 did not provide eligibility to small business lending companies  House-passed version of H R  5297 defined small business lending "as small business lending as defined by and reported in an eligible institution's quarterly call report, where each loan comprising such lending is made to a small business and is one the following types: (1) commercial and industrial loans; (2) owner-occupied nonfarm, nonresidential real estate loans; (3) loans to finance agricultural production and other loans to farmers; (4) loans secured by farmland; (5) nonowner-occupied commercial real estate loans; and (6) construction, land development and other land loans " The Senate-passed version of H R  5297 's definition of small business lending did not include nonowner-occupied commercial real estate or construction, land development and other land loans  Senate-passed version of H R  5297 had an exclusion provision prohibiting recipient lending institutions from using the funds to issue loans that have an original amount greater than $10 million or that would be made to a business with more than $50 million in revenues  The House-passed version of H R  5297 did not contain this provision  House-passed version of H R  5297 indicated that the incentives received in the form of reduced dividend rates during the first 4 5-year period following the date on which an eligible institution received a capital investment under the program would be contingent on an increase in the number of loans made  If the number of loans made by the institution did not increase by 2 5% for each 2 5% increase of small business lending, then the rate at which dividends and interest would be payable during the following quarter on preferred stock or other financial instruments issued to the Treasury by the eligible institution would be (i) 5%, if this quarter is within the two-year period following the date on which the eligible institution received the capital investment under the program; or (ii) 7%, if the quarter is after the two-year period  The Senate-passed version of H R  5297 did not contain this legislative language  House-passed version of H R  5297 included an alternative computation provision that would have allowed eligible institutions to compute their small business lending amounts for incentive purposes as if the definition of their small business lending amounts did not require that the loans comprising such lending be made to small business  This alternative computation would have been allowed if the eligible institution certified that all lending included by the institution for purposes of computing the increase in lending was made to small businesses  The Senate-passed version of H R  5297 did not contain this provision  House-passed version of H R  5297 indicated that an eligible institution that is a community development loan fund may apply to receive a capital investment from the SBLF in an amount not exceeding 10% of total assets, as reported in the audited financial statements for the fiscal year of the eligible institution that ended in calendar year 2009  The Senate-passed version of H R  5297 specifies 5%  House-passed version of H R  5297 would have required the Secretary of the Treasury, in consultation with the Community Development Financial Institutions Fund, to develop eligibility criteria to determine the financial ability of a Community Development Loan Fund to participate in the program and repay the investment  It provided a list of recommended eligibility criteria that the Secretary of the Treasury could use for this purpose  The Senate-passed version of H R  5297 provided a similar, but mandatory, list of eligibility criteria that must be used for this purpose  House-passed version of H R  5297 contained a temporary amortization authority provision which would have allowed an eligible institution to amortize any loss or write-down on a quarterly straight-line basis over a period of time, adjusted to reflect the institution's change in the amount of small business lending relative to the baseline  The Senate-passed version of H R  5297 did not contain this provision  The Senate's version of H R  5297 was agreed to in the Senate on September 16, 2010, after considerable debate and amendment to remove the Small Business Early-Stage Investment Program and Small Business Borrower Assistance Program, revise the SBLF, and add numerous other provisions to assist small businesses, including additional small business tax reduction provisions  The House agreed to the Senate amendments on September 23, 2010, and President Obama signed the bill, retitled the Small Business Jobs Act of 2010 ( P L  111-240 ), into law on September 27, 2010 

ground_truth: Federal law encourages individuals to save for retirement through tax incentives for 401(k) plans and IRAs—the predominant forms of retirement savings in the United States. In 2017, U.S. plans and IRAs reportedly held investments worth nearly $17 trillion dollars. Federal law also allows individuals to withdraw assets from these accounts under certain circumstances. DOL and IRS oversee 401(k) plans, and collect annual plan data—including financial information—on the Form 5500. For both IRAs and 401(k) plans, GAO was asked to examine: (1) the incidence and amount of early withdrawals; (2) factors that might lead individuals to access retirement savings early; and (3) policies and strategies that might reduce the incidence and amounts of early withdrawals. To answer these questions, GAO analyzed data from IRS, the Census Bureau, and DOL from 2013 (the most recent complete data available); and interviewed a diverse range of stakeholders identified in the literature, including representatives of companies sponsoring 401(k) plans, plan administrators, subject matter experts, industry representatives, and participant advocates. In 2013 individuals in their prime working years (ages 25 to 55) removed at least $69 billion (+/- $3.5 billion) of their retirement savings early, according to GAO's analysis of 2013 Internal Revenue Service (IRS) and Department of Labor (DOL) data. Withdrawals from individual retirement accounts (IRA)—$39.5 billion (+/- $2.1 billion)—accounted for much of the money removed early, were equivalent to 3 percent (+/- 0.15 percent) of the age group's total IRA assets, and exceeded their IRA contributions in 2013. Participants in employer-sponsored plans, like 401(k) plans, withdrew at least $29.2 billion (+/- $2.8 billion) early as hardship withdrawals, lump sum payments made at job separation (known as cashouts), and loan balances that borrowers did not repay. Hardship withdrawals in 2013 were equivalent to about 0.5 percent (+/-0.06 percent) of the age group's total plan assets and about 8 percent (+/- 0.9 percent) of their contributions. However, the incidence and amount of certain unrepaid plan loans cannot be determined because the Form 5500—the federal government's primary source of information on employee benefit plans—does not capture these data. Stakeholders GAO interviewed identified flexibilities in plan rules and individuals' pressing financial needs, such as out-of-pocket medical costs, as factors affecting early withdrawals of retirement savings. Stakeholders said that certain plan rules, such as setting high minimum loan thresholds, may cause individuals to take out more of their savings than they need. Stakeholders also identified several elements of the job separation process affecting early withdrawals, such as difficulties transferring account balances to a new plan and plans requiring the immediate repayment of outstanding loans, as relevant factors. Stakeholders GAO interviewed suggested strategies they believed could balance early access to accounts with the need to build long-term retirement savings. For example, plan sponsors said allowing individuals to continue to repay plan loans after job separation, restricting participant access to plan sponsor contributions, allowing partial distributions at job separation, and building emergency savings features into plan designs, could help preserve retirement savings (see figure). However, they noted, each strategy involves tradeoffs, and the strategies' broader implications require further study. GAO recommends that, as part of revising the Form 5500, DOL and IRS require plan sponsors to report the incidence and amount of all 401(k) plan loans that are not repaid. DOL and IRS neither agreed nor disagreed with our recommendation.

prompt_front: You are given two reports by the government agency.



Question: Write a one-page summary of the report 2.

Report 1: Over the last 3 decades employers have shifted away from sponsoring defined benefit (DB) plans and toward DC plans  This shift also transfers certain types of risk—such as investment risk—from employers to employee participants  DB plans generally offer a fixed level of monthly annuitized retirement income based upon a formula specified in the plan, which usually takes into account factors such as a participant’s salary, years of service, and age at retirement, regardless of how the plan’s investments perform  In contrast, benefit levels in DC plans—such as 401(k) plans—depend on the contributions made to the plan and the performance of the investments in individual accounts, which may fluctuate in value  As we have previously reported, some experts have suggested that the portability of DC plans make them better-suited for a mobile workforce, and that such portability may lead to early withdrawals of retirement savings  DOL reported there were 656,241 DC and 46,300 DB plans in the United States in 2016  Tax incentives are in place to encourage employers to sponsor retirement plans and employees to participate in plans  Under the Employee Retirement Income Security Act of 1974 (ERISA), employers may sponsor DC retirement plans, including 401(k) plans—the predominant type of DC plan, in which benefits are based on contributions to and the performance of the investments in participants’ individual accounts  To save in 401(k) plans, participants contribute a portion of their income into an investment account, and in traditional 401(k) plans taxes are deferred on these contributions and associated earnings, which can be withdrawn without penalty after age 59½ (if permitted by plan terms)  As plan sponsors, employers may decide the amount of employer contributions (if any) and how long participants must work before having a non-forfeitable (i e , vested) interest in their plan benefit, within limits established by federal law  Plan sponsors often contract with service providers to administer their plans and provide services such as record keeping (e g , tracking and reporting individual account contributions); investment management (i e , selecting and managing the securities included in a mutual fund); and custodial or trustee services for plan assets (e g , holding the plan assets in a bank)  Individuals also receive tax incentives to save for retirement outside of an employer-sponsored plan  For example, traditional IRAs provide certain individuals with a way to save pre-tax money for retirement, with withdrawals made in retirement taxed as income  In addition, Roth IRAs allow certain individuals to save after-tax money for retirement with withdrawals in retirement generally tax-free  IRAs were established under ERISA, in part, to (1) provide a way for individuals not covered by a pension plan to save for retirement; and (2) give retiring workers or individuals changing jobs a way to preserve assets from 401(k) plans by transferring their plan balances into IRAs  The Investment Company Institute (ICI) reported that 34 8 percent of households in the United States owned an IRA in 2017, a percentage that has generally remained stable since 2000  In 2017, IRA assets accounted for almost 33 percent (estimated at $9 2 trillion) of total U S  retirement assets, followed by DC plans, which accounted for 27 percent ($7 7 trillion)  Further, according to ICI, over 94 percent of funds flowing into traditional IRAs from 2000 to 2015 came from rollovers—primarily from 401(k) plans  IRS, within the Department of the Treasury, is responsible for enforcing IRA tax laws, while IRS and DOL share responsibility for overseeing prohibited transactions relating to IRAs  IRS also works with DOL’s Employee Benefits Security Administration (EBSA) to enforce laws governing 401(k) plans  IRS is primarily responsible for interpreting and enforcing provisions of the Internal Revenue Code (IRC) that apply to tax- preferred retirement savings  EBSA enforces ERISA’s reporting and disclosure and fiduciary responsibility provisions, which, among other things, include requirements related to the type and extent of information that a plan sponsor must provide to plan participants  Employers sponsoring employee benefit plans subject to ERISA, such as a 401(k) plans, generally must file detailed information about their plan each year  The Form 5500 serves as the primary source of information collected by the federal government regarding the operation, funding, expenses, and investments of employee benefit plans  The Form 5500 includes information about the financial condition and operation of their plans, among other things  EBSA uses the Form 5500 to monitor and enforce plan administrators and other fiduciaries, and service providers’ responsibilities under Title I of ERISA  IRS uses the form to enforce standards that relate to, among other things, how employees become eligible to participate in benefit plans, and how they become eligible to earn rights to benefits  In certain instances, sponsors of 401(k) plans may allow participants to access their tax-preferred retirement savings prior to retirement  Plan sponsors have flexibility under federal law and regulations to choose whether to allow plan participants access to their retirement savings prior to retirement and what forms of access to allow  Typically, plans allow participants to access their savings in one or more of the following forms: Loans: Plans may allow participants to take loans and limit the number of loans allowed  If the plan provides for loans, the maximum amount that the plan can permit as a loan generally cannot exceed the lesser of (1) the greater of 50 percent of the vested account balance, or $10,000 or (2) $50,000 less the excess of the highest outstanding balance of loans during the 1-year period ending on the day before the day on which a new loan is made over the outstanding balance of loans on the day the new loan is made  Plan loans are generally not treated as early withdrawals unless they are not repaid within the terms specified under the plan  Hardship withdrawals: Plans may allow participants facing a hardship to take a withdrawal on account of an immediate and heavy financial need, and if the withdrawal is necessary to satisfy the financial need  Though plan sponsors can decide whether to offer hardship withdrawals and approve applications for hardship withdrawals, IRS regulations provide “safe harbor” criteria regarding circumstances when a withdrawal is deemed to be on account of an immediate heavy financial need  IRS regulations allow certain expenses to qualify under the safe harbor including: (1) certain medical expenses; (2) costs directly relating to the purchase of a principal residence; (3) tuition and related educational fees and expenses for the participant, and their spouse, children, dependents or beneficiary; (4) payments necessary to prevent eviction from, or foreclosure on, a principal residence; (5) certain burial or funeral expenses; and (6) certain expenses for the repair of damage to the employee’s principal residence  Plans that provide for hardship withdrawals generally specify what information participants must provide to the plan sponsor to demonstrate a hardship meets the definition of an immediate and heavy financial need  Early withdrawals of retirement savings may have short-term and long- term impacts on participants’ ability to accumulate retirement savings  In the short term, IRA owners and participants in 401(k) plans who received a withdrawal before reaching age 59½ generally pay an additional 10 percent tax for early distributions in addition to income taxes on the taxable portion of the distribution amount  The IRC exempts certain distributions from the additional tax, but the exceptions vary among 401(k) plans and IRAs  Early withdrawals of any type can result in the permanent removal of assets from retirement accounts thereby reducing the amounts participants can accumulate before retirement, including the loss of compounded interest or other earnings on the amounts over the participant’s career  According to DOL’s Bureau of Labor Statistics (BLS), U S  workers are likely to have multiple jobs in their careers as average employee tenure has decreased  In 2017, BLS reported that from 1978 to 2014, workers held an average of 12 jobs between the ages of 18 and 50  BLS also reported in 2016 that the median job tenure for a worker was just over 4 years  Employees who separate from a job bear responsibility for deciding what to do with their accumulated assets in their former employer’s plan  Recent research estimated that 10 million people with a retirement plan change jobs each year, many of whom faced a decision on how to treat their account balance at job separation  Plan administrators must provide a tax notice detailing participants’ options for handling the balance of their accounts  When plan participants separate from their employers, they generally have one of three options: 1  They may leave the balance in the plan, 2  They may ask their employer to roll the money directly into a new qualified employer plan or IRA (known as a direct rollover), or 3  They may request a distribution  Once the participant receives the distribution he or she can (1) within 60 days, roll the distribution into a new qualified employer plan or IRA (in which case the money would remain tax-preferred); or (2) keep the distributed amount, and pay any income taxes or additional taxes associated with the distribution (known as a cashout)  Sponsors of 401(k) plans may cash out or transfer separating participant accounts if an account balance falls below a certain threshold  The Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) amended the IRC to provide certain protections for separating participants with account balances between $1,000 and $5,000 by requiring, in the absence of participant direction, plan sponsors to either keep the account in the plan or to transfer the account balance to an IRA to preserve its tax-preferred status  Plan sponsors may not distribute accounts with balances of more than $5,000 without participant direction, but have discretion to distribute account balances of $1,000 or less  The IRC imposes an additional 10 percent tax (in addition to ordinary income tax) on certain early withdrawals from qualified retirement plans, which includes IRAs and 401(k) plans in an effort to discourage the use of plan funds for purposes other than retirement and ensure the favorable tax treatment for plan funds is used to provide retirement income  Employers are required to withhold 20 percent of the amount cashed out to cover anticipated income taxes unless the participant pursues a direct rollover into another qualified plan or IRA  Research has found that many employees are concerned about their level of savings and ability to manage their retirement accounts, and some employers provide educational services to improve employees’ financial wellness and financial literacy and encourage them to save for retirement  A 2017 survey on employee financial wellness in the workplace found more than one-half of workers experienced financial stress and that insufficient emergency savings was a top concern for employees  Research has also found that limited financial literacy is widespread among Americans over age 50, and those who lack financial knowledge are less likely to successfully plan for retirement  In 2018, the Federal Reserve reported that three-fifths of non-retirees with participant-directed retirement accounts had little to no comfort managing their own investments  As we have previously reported, some employers have developed comprehensive programs aimed at overall improvement in employees’ financial health  These programs, often called financial wellness programs, may help employees with budgeting, emergency savings, and credit management, in addition to the traditional information and assistance provided for retirement and health benefits  In 2013, individuals ages 25 to 55 withdrew at least $68 7 billion early from their retirement accounts  Of this amount, IRA owners in this age group withdrew the largest share (about 57 percent) and 401(k) plan participants in this age group withdrew the rest (about 43 percent) However, a total amount withdrawn from 401(k) plans cannot be determined due to data limitations  IRA withdrawals were the largest source of early withdrawals of retirement savings, accounting for an estimated $39 5 billion of the total $68 7 billion in early withdrawals made by individuals ages 25 to 55 in 2013  According to IRS estimates, 12 percent of IRA owners in this age group withdrew money early that year from their IRAs in 2013  The amount they withdrew early comprised a small percentage of their total IRA assets  Specifically, in 2013, the amount of early withdrawals was equivalent to 3 percent of the cohort’s total IRA assets and, according to IRS estimates, the total amount withdrawn by this cohort exceeded their total contributions to IRAs in that year  At least $29 2 billion left 401(k) plans in 2013 in the form of hardship withdrawals, cashouts at job separation, and unrepaid plan loans, according to our analysis of 2013 SIPP data and data from DOL’s Form 5500  Specifically, we found that: Hardship withdrawals were the largest source of early withdrawals from 401(k) plans with an estimated 4 percent (+/- 0 25) of plan participants ages 25 to 55 withdrawing an aggregate $18 5 billion in 2013  The amount of hardship withdrawals was equivalent to 0 5 percent (+/- 0 06) of the cohort’s total plan assets and 8 percent (+/- 0 9) of the cohort’s plan contributions made in 2013  Cashouts of account balances of $1,000 or more at job separation were the second largest source of early withdrawals from 401(k) plans  In 2013, an estimated 1 1 percent (+/- 0 11) of plan participants ages 25 to 55 withdrew an aggregate $9 8 billion from their plans that they did not roll into another qualified plan or IRA  Additionally, 86 percent (+/- 2 9) of these participants taking a cashout of $1,000 or more did not roll over the amount in 2013  The amounts cashed out and not rolled over were equivalent to 0 3 percent (+/- 0 05) of the cohort’s total plan assets and 4 percent (+/- 0 75) of the cohort’s total contributions made in 2013  Loan defaults accounted for at least $800 million withdrawn from 401(k) plans in 2013; however, the amount of distributions of unpaid plan loans is likely larger as DOL data cannot be used to quantify plan loan offsets that are deducted from participants’ account balances after they leave a plan  As a result, the amount of loan offsets among terminating participants ages 25 to 55 cannot be determined with certainty  Specifically, DOL’s Form 5500 instructions require plan sponsors to report unpaid loan balances in two separate places on the Form 5500, depending on whether the loan holder is an active or a terminated participant  For active participants, plan sponsors report loan defaults as a single line item on the Form 5500 (i e , the $800 million in 2013 listed above)  For terminated participants, plan sponsors report unrepaid plan loan balances as benefits paid directly to participants—a category that also includes rollovers to employer plans and IRAs  According to a DOL official, as a result of this commingling of benefits on this line item, isolating the amount of loan offsets for terminated participants using the Form 5500 data is not possible  Without better data of the amount of unrepaid plan loans, the amount of loan offsets and the characteristics of plan participants who did not repay their plan loans at job separation cannot be determined  IRA owners and plan participants taking early withdrawals paid $6 2 billion as a result of the additional 10 percent tax for early distributions in 2013, according to IRS estimates  Although the taxes are generally treated separately from the amounts withdrawn, IRA owners and plan participants are expected to pay any applicable taxes resulting from the additional 10 percent tax when filing their income taxes for the tax year in which the withdrawal occurred  Individuals with certain demographic and economic characteristics that we analyzed had higher incidence of early withdrawals of retirement savings, according to our analysis of SIPP data  The characteristics described below reflect statistically significant differences between comparison groups (a full listing of all demographic groups can be found in appendix III)  Age  The incidence of IRA withdrawals was higher among individuals ages 45 to 54 (8 percent) than individuals ages 25 to 34 and 35 to 44  Education  Individuals with a high school education or less had higher incidence of cashouts (97 percent) and hardship withdrawals (7 percent) than individuals with some college or some graduate school education  Family size  Individuals in families of seven or more (8 percent) or in families of five to six (7 percent) had higher incidence of hardship withdrawals than individuals in smaller family groups we analyzed  Individuals living alone had higher incidence of IRA withdrawals than individuals living in the larger family groups  Marital status  Widowed, divorced, or separated individuals had higher incidence of IRA withdrawals (11 percent) and hardship withdrawals (7 percent) than married or never married individuals  Race  The incidence of hardship withdrawals among African American (10 percent) and Hispanic individuals (6 percent) was higher than among individuals who were White, Asian, or Other  Residence  The incidence of IRA withdrawals and hardship withdrawals was higher among individuals living in nonmetropolitan areas (7 percent and 6 percent, respectively) than among individuals living in metropolitan areas  Similarly, individuals with certain economic characteristics that we analyzed had higher incidence of early withdrawals of retirement savings, according to our analysis of SIPP data  The characteristics described below reflect statistically significant differences between comparison groups (a full listing of all demographic groups can be found in appendix III)  Employer size  Individuals working for employers with fewer than 25 employees had higher incidence of IRA withdrawals (9 percent) than individuals working for employers with higher number of employees  Employment  Individuals working fewer than 35 hours per week had higher incidence of IRA withdrawals (7 percent) than employees working 35 hours or more  Household debt  Individuals with household debt of $5,000 up to $20,000 had higher incidence of IRA withdrawals (14 percent) than individuals with other debt amounts  Household income  Individuals with household income of less than $25,000 or $25,000 up to $50,000 had higher incidence of IRA withdrawals (12 percent and 9 percent, respectively) and hardship withdrawals (9 percent and 7 percent, respectively) than individuals with higher income amounts  Personal cash reserves  Individuals with personal cash reserves of less than $1,000 had higher incidence of IRA withdrawals (10 percent) and hardship withdrawals (6 percent) than individuals with larger reserves  Retirement assets  Individuals with combined IRA and 401(k) plan assets valued at less than $5,000 had higher incidence of hardship withdrawals (7 percent) than individuals with higher valued assets  Tenure in retirement plan  Individuals with fewer than 3 years in their retirement plan had higher incidence of hardship withdrawals (6 percent) than individuals with longer tenures  Stakeholders we interviewed said that plan rules related to the disposition of account balances at job separation can lead participants to remove more than they need, up to and including their entire balance  We previously reported U S  workers are likely to change jobs multiple times in a career  Plan sponsors may cash out balances of $1,000 or less at job separation, although they are not required to do so  As a result, plan participants with such balances, including younger employees and others with short job tenures, risk having their account balances distributed in full each time they change jobs  As shown in table 1, a separating employee must take multiple steps to ensure that an account balance remains tax-preferred  Participants who take a distribution from a plan with the intent of rolling it into another qualified plan or IRA must acquire additional funds to complete the rollover and avoid adverse tax consequences  Plan sponsors are required to withhold 20 percent of the account balance to pay anticipated taxes on the distribution  As a result, the sponsor then sends 80 percent of the account balance to the participant, who must acquire outside funds to compensate for the 20 percent withheld or forgo the preferential tax treatment of that portion of their account balance  For example, a participant seeking to roll over a retirement account with a $10,000 balance would receive an $8,000 distribution after tax withholding, requiring them to locate an additional $2,000 to complete the rollover within the 60-day period to avoid a taxable distribution of the withheld amount  If participants can replace the 20 percent withheld and complete the rollover within the 60-day period, they do not owe taxes on the distribution  Stakeholders said that the complexity of rolling a 401(k) account balance from one employer to another may encourage participants to take the relatively simpler route of rolling their balance into an IRA or cashing out altogether  They noted that separating participants had many questions when evaluating their options and had difficulty understanding the notice provided  For example, participants may not fully understand how the decisions made at job separation can have a significant impact on their current tax situation and eventual retirement security  One plan sponsor, describing concerns about giving investment advice, said she watched participants make what she judged to be poor choices with their account balances and felt helpless to intervene  Stakeholders also noted that the lack of a standardized rollover process sometimes bred mistrust among employers and complicated separating participants’ ability to successfully facilitate a rollover between plans  For example, one stakeholder told us that some plans were hesitant to accept funds from other employer plans fearing that the funds might come from plans that have failed to comply with plan qualification requirements and could create problems for the receiving plan later on  Another stakeholder suggested that the requirement for plan sponsors to provide a notice to separating participants likely caused more participants to take the distribution  Stakeholders described loans as a useful source of funds in times of need and a way to avoid more expensive options, such as high-interest credit cards  They also noted that certain plan loan policies could lead to early withdrawals of retirement savings  (See fig  1 ) Loan repayment at job separation: Stakeholders said loan repayment policies can increase the incidence of defaults on outstanding loans  When participants do not repay their loan after separating from a job, the outstanding balance is treated as a distribution, which may subject it to income tax liability and, possibly, an additional 10 percent tax for early distributions  According to stakeholders, the process of changing jobs can inadvertently lead to a distribution of a participant’s outstanding loan balance, when the participant could have otherwise repaid the loan  Extended loan repayment periods: Some plan sponsors allow participants to take loans to purchase a home  Stakeholders told us that the amounts of these home loans tended to be larger than general purpose loans and had longer repayment periods that these extended from 15 to 30 years  A stakeholder further noted that these loans could make it more likely that participants would have larger balances to repay if they lost or changed jobs  Multiple loans: While some plan sponsors noted that their plans limited the number of loans participants can take from their retirement plan, others do not  Some plan sponsors limited participants to between one and three simultaneous loans, and one plan administrator indicated that 92 percent of their plan-sponsor clients allowed no more than two simultaneous loans  Other plan sponsors placed no limit on the number of participant loans or limited loans to one or two per calendar year, in which case a participant could take out a new loan at the start of a calendar year regardless of whether or not outstanding loans had been repaid  Stakeholders described some participants as “serial” borrowers, who take out multiple loans and have less disposable income as a result of ongoing loan payments  One plan administrator stated that repeat borrowing from 401(k) plans was common, and some participants took out new loans to pay off old loans  Other loan restrictions: Allowing no loans or one total outstanding loan can cause participants facing economic shocks to take a hardship withdrawal, resulting in the permanent removal of their savings and subjecting them to income tax liability and, possibly, an additional 10 percent tax for early distributions and a suspension on contributions  Minimum loan amounts: Minimum loan amounts may result in participants borrowing more than they need to cover planned expenses  For example, a participant may have a $500 expense for which they seek a loan, but may have to borrow $1,000 due to plan loan minimums  Stakeholders said that plan participants take plan loans and hardship withdrawals for pressing financial needs  Many plan sponsors we interviewed said they used the IRS safe harbor exclusively as criteria when reviewing a participant’s application for a hardship withdrawal  Stakeholders said the top two reasons participants took hardship withdrawals were to prevent imminent eviction or foreclosure and to cover out-of-pocket medical costs not covered by health insurance  Participants generally took loans to reduce debt, for emergencies, or to purchase a primary residence  Stakeholders also said that participants who experienced economic shocks stemming from job loss made early withdrawals  They said retirement plans often served as a form of insurance for those between jobs or facing a sudden economic shock and participants accessed their retirement accounts because, for many, they were the only source of savings  They cited personal debt, health care costs, and education as significant factors that affected employees across all income levels  Stakeholders said some participants also used their retirement savings to pay for anticipated expenses  Two plan administrators said education expenses were one of the reasons participants took hardship withdrawals  They said that participants accessed their retirement savings to address the cost of higher education, including paying off their own student loan debt or financing the college costs for family members  For example, plan administrators told us that some participants saved with the expectation of taking a hardship withdrawal to pay for college tuition  Other participants utilized hardship withdrawals to purchase a primary residence  IRA owners generally may take withdrawals at any time and IRS does not analyze the limited information it receives on the reasons for IRA withdrawals  IRA owners can withdraw any amount up to their entire account balance at any time  In addition, IRAs have certain exceptions from the additional 10 percent tax for early distributions  For example, IRA withdrawals taken for qualified higher education expenses, certain health insurance premiums, and qualified “first-time” home purchases (up to $10,000) are excepted from the additional 10 percent tax  IRA owners who make an IRA distribution receive a Form1099-R or similar statement from their provider  On the Form 1099-R, IRA providers generally identify whether the withdrawal, among other things, can be categorized as a normal distribution, an early distribution, or a direct distribution to a qualified plan or IRA  For an early distribution, the IRA provider may identify whether a known exception to the additional 10 percent tax applies  For their part, IRA owners are required to report early withdrawals on their income tax returns, as well as the reason for any exception from the additional 10 percent tax for a limited number of items  In written responses to questions, an IRS official indicated that IRS collected data on the exemption reason codes, but did not use them  Some plan sponsors we interviewed had policies in place that may reduce the long-term impact of early withdrawals of retirement savings taken at job separation  Policies suggested by plan sponsors included: Providing a periodic installment distribution option: Although some plan sponsors may require participants wanting a distribution to take their full account balance at job separation, other plan sponsors provided participants with an option of receiving their account balance in periodic installments  For example, one plan sponsor gives separating participants an option to receive periodic installment distributions at intervals determined by the participants  This plan sponsor said separating participants could select distributions on a monthly, quarterly, semi-annual or annual basis  These participants could also elect to stop distributions at any time, preserving the remaining balance in the employer’s plan  The plan sponsor said the plan adopted this option to help separating participants address any current financial needs, while preserving some of the account balance for retirement  Another plan sponsor adopted a similar policy to address the cyclical nature of the employer’s business, which can result in participants being terminated and rehired within one year  Offering partial distributions: One plan sponsor provided separated participants with the option of receiving a one-time, partial distribution  If a participant opted for partial distribution, the plan sponsor issued the distribution for the requested sum and preserved the remainder of the account balance in the plan  The plan sponsor adopted the partial distribution policy to provide separating participants with choices for preserving account balances, while simultaneously providing access to address any immediate financial needs  Providing plan loan repayment options for separated participants: Some plan sponsors allowed former participants to continue making loan repayments after job separation  Loan repayments after job separation reduce the loan default risk and associated tax implications for participants  Some plan sponsors said that separating participants who have the option to continue repaying an outstanding loan balance generally have three options: (1) to continue repaying the outstanding loan, (2) to repay the entire balance of the loan at separation within a set repayment period, or (3) not to repay the loan  Those participants who continue repaying their loans after separation generally have the option to set up automatic debit payments to facilitate the repayment  Those separated participants who do not set up loan repayment terms within established timeframes, or do not make a payment after the loan repayment plan has been established, default on their loan and face the associated tax consequences, including, possibly, an additional 10 percent tax for early distributions  Some plan sponsors we spoke with placed certain limits on participant loan activity, which may reduce the incidence of loan defaults (see fig  2)  Limiting loan amounts to participant contributions: Some plan sponsors said they limited plan loans to participant contributions and any investment earnings from those contributions to reduce early withdrawals of retirement savings  For example, one plan sponsor’s policy limited the amount a participant could borrow from their plan to 50 percent of participant contributions and earnings, compared to 50 percent of the total account balance  Implementing a waiting period after loan repayment before a participant can access a new loan: Some plan sponsors said they had implemented a waiting period between plan loans, in which a participant, having fully paid off the previous loan, was temporarily ineligible to apply for another  Among plan sponsors who implemented a waiting period, the length varied from 21 days to 30 days  Reducing the number of outstanding loans: Some plan sponsors we spoke with limited the number of outstanding plan loans to either one or two loans  One plan sponsor had previously allowed one new loan each calendar year, but subsequently revised plan policy to allow participants to have a total of two outstanding loans  The plan sponsor said the rationale was to balance limiting participant loan behavior with the ability of participants to access their account balance  Some plan sponsors said they had expanded the definition of immediate and heavy financial need beyond the IRS safe harbor to better align with the economic needs of their participants  For example, one plan sponsor approved a hardship withdrawal to help a participant pay expenses related to a divorce settlement  Another plan sponsor developed an expanded list of qualifying hardships, including past-due car, mortgage, or rent payments; and payday loan obligations  Some plan sponsors implemented loan programs outside their plan, contracting with third-party vendors to provide short-term loans to employees  For example, one plan sponsor instituted a loan program that allowed employees to borrow up to $5,000 from a third-party vendor that would be repaid through payroll deduction  This plan sponsor said the loan program featured an 8 to 12 percent interest rate, and approval was not based on a participant’s credit history  The plan sponsor also observed that they had fewer 401(k) loan applications since the third- party loan program was implemented  A second plan sponsor instituted a similar loan program that allowed employees to borrow up to $500 interest free from a third-party vendor  According to this sponsor, to qualify for a loan, an employee must demonstrate financial hardship and have no outstanding plan loans, and is required to attend a financial counseling course if their loans are approved  Some plan sponsors said they have provided workplace-based financial wellness resources for their participants to improve their financial literacy  Some implemented optional financial wellness programs that covered topics such as investment education, how plan loans work, and the importance of saving for emergencies  These plan sponsors told us they offered on-site financial counseling with representatives of the plan administrator to help provide guidance on financial decision-making; however, other plan sponsors said that—despite their investment in participant-specific financial education—participation in these programs was low  Stakeholders suggested strategies that they believed could help mitigate the long-term effects of early withdrawals of retirement savings on IRA owners and plan participants  They noted that any of these proposed strategies, if implemented, could (1) increase the costs of administering IRAs and plans, (2) require changes to federal law or regulations, and (3) involve tradeoffs between providing access to retirement savings and preserving savings for retirement  Stakeholders suggested several strategies that, if implemented, could help reduce early withdrawals from IRAs  These strategies centered on modifying existing rules to reduce early withdrawals from IRAs (and subsequently the amount paid as a result of the additional 10 percent tax for early distributions)  Specifically, stakeholders suggested: Raising the age at which the additional 10 percent tax applies: Some stakeholders noted that raising the age at which the additional 10 percent tax for early distributions applies from 59½ to 62 would align it with the earliest age of eligibility to claim Social Security and may encourage individuals to consider a more comprehensive retirement distribution strategy  However, other stakeholders cautioned that it could have drawbacks for employees in certain situations  For example, individuals who lose a job late in their careers could face additional tax consequences for accessing an IRA before reaching the age 62  In addition, one stakeholder said some individuals may shift to a part-time work schedule later in their careers as they transition to retirement and plan on taking IRA withdrawals to compensate for their lower wages  Allowing individuals to roll existing plan loans into an IRA: Some stakeholders said that allowing individuals to include an existing plan loan as part of a rollover into an IRA, although currently not allowed, would likely reduce plan loan defaults by giving individuals a way to continue repaying the loan balance  One stakeholder suggested that rolling an existing plan loan into an IRA could be administratively challenging for IRA providers, but doing so to repay the loan may ultimately preserve retirement savings  Allowing IRA loans: While currently a prohibited transaction that could lead to the cessation of an IRA, some stakeholders suggested that IRA loans could theoretically reduce the amounts being permanently removed from the retirement system through early IRA withdrawals  One stakeholder said an IRA loan would present a good alternative to an early withdrawal from an IRA account because it would give the account holder access to the balance, defer any tax implications, and improve the likelihood the loaned amount would ultimately be repaid  However, another stakeholder said that allowing IRA loans could increase early withdrawals, given the limited oversight of IRAs, as well as additional administrative costs and challenges for IRA providers  Stakeholders suggested several strategies that, if implemented, could reduce the effect of cashouts at job separation from 401(k) plans  Simplifying the rollover process: Stakeholders proposed two modifications to the current rollover process that they believe could make the process more seamless and reduce the incidence of cashouts  First, stakeholders suggested that a third-party entity tasked with facilitating rollovers between employer plans for a separating participant would likely reduce the incidence of cashouts at job separation  Such an entity could automatically route a participant’s account balance from the former plan to a new one  One stakeholder said having a third-party entity facilitate the rollover would eliminate the need for a plan participant to negotiate the process  Such a service, however, would likely come at cost that may likely be passed onto participants  Stakeholders also suggested direct rollovers of account balances between plans could further reduce the incidence of cashouts  One stakeholder, however, cautioned that direct rollovers could have downsides for some participants  For example, participants who prefer to keep their balance in their former employer’s plan but provide no direction to the plan sponsor may inadvertently find their account balance rolled into a new employer’s plan  Restricting cashouts to participant contributions only: Some stakeholders suggested limiting the assets a participant may access at job separation  For example, some stakeholders said that participants should not be allowed to cash out vested plan sponsor contributions, thus preserving those contributions and their earnings for retirement  However, this strategy could result in participants overseeing and monitoring several retirement accounts  Stakeholders suggested several strategies that, if implemented, could limit the adverse effect of hardship withdrawals on retirement savings  Narrowing the IRS safe harbor: Although some plan sponsors are expanding the reasons for a hardship to align with perceived employee needs, some stakeholders said narrowing the IRS safe harbor would likely reduce the incidence of early withdrawals  For example, some stakeholders suggested narrowing the definition of a hardship to exclude the purchase of a primary residence or for postsecondary education costs  In addition, one stakeholder said alternatives exist to finance home purchases (mortgages) and postsecondary education (student loans)  Stakeholders noted that eliminating the purchase of a primary residence and postsecondary education costs from the IRS safe harbor would make hardship withdrawals a tool more strictly used to avoid sudden and unforeseen economic shocks  In combination with the two exclusions, one stakeholder suggested consideration be given to either reducing or eliminating the additional 10 percent tax for early distributions that may apply to hardship withdrawals  Replacing hardship withdrawals with hardship loans: Stakeholders said replacing a hardship withdrawal, which permanently removes money from the retirement system, with a no-interest hardship loan, which would be repaid to the account, would reduce early withdrawals  Under this suggestion, if the loan were not repaid within this predetermined time frame, the remaining loan balance could be considered a deemed distribution and treated as income (similar to the way a hardship withdrawal is treated now)  Incorporating emergency savings features into 401(k) plans: Stakeholders said incorporating an emergency savings account into the 401(k) plan structure may help participants absorb economic shocks and better prepare for both short-term financial needs and long-term retirement planning  (See fig  3 ) In addition, stakeholders said participants with emergency savings accounts could be better prepared to avoid high interest rate credit options, such as credit cards or payday loans, in the event of an economic shock  Stakeholders had several ideas for implementing emergency savings accounts  For example, one stakeholder suggested that, were it allowed, plan sponsors could revise automatic account features to include automatic contributions to an emergency savings account  Some stakeholders also said emergency savings accounts could be funded with after-tax participant contributions to eliminate the tax implications when withdrawing money from the account  However, another stakeholder said emergency savings contributions could reduce contributions to a 401(k) plan  In the United States, the amount of aggregate savings in retirement accounts continues to grow, with nearly $17 trillion invested in 401(k) plans and IRAs  Early access to retirement savings in these plans may incentivize plan participation, increase participant contributions, and provide participants with a way to address their financial needs  However, billions of dollars continue to leave the retirement system early  Although these withdrawals represent a small percentage of overall assets in these accounts, they can erode or even deplete an individual’s retirement savings, especially if the retirement account represents their sole source of savings  Employers have implemented plan policies that seek to balance the short- term benefits of providing participants early access to their accounts with the long-term need to build retirement savings  However, the way plan sponsors treat outstanding loans after a participant separates from employment has the potential to adversely affect retirement savings  In the event of unexpected job loss or separation, plan loans can leave participants liable for additional taxes  Currently, the incidence and amount of loan offsets in 401(k) plans cannot be determined due to the way DOL collects data from plan sponsors  Additional information on loan offsets would provide insight into how plan loan features might affect long-term retirement savings  Without clear data on the incidence of these loan offsets, which plan sponsors are generally required to include, (but not itemize) on the Form 5500, the overall extent of unrepaid plan loans in 401(k) plans cannot be known  To better identify the incidence and amount of loan offsets in 401(k) plans nationwide, we recommend that the Secretary of Labor direct the Assistant Secretary for EBSA, in coordination with IRS, to revise the Form 5500 to require plan sponsors to report qualified plan loan offsets as a separate line item distinct from other types of distributions  (Recommendation 1) We provided a draft of this product to the Department of Labor, the Department of the Treasury, and the Internal Revenue Service for review and comment  In its written comments, reproduced in appendixes IV and V, respectively, DOL and IRS generally agreed with our findings, but neither agreed nor disagreed with our recommendation  DOL said it would consider our recommendation as part of its overall evaluation of the Form 5500, and IRS said it would work with DOL as it responds to our recommendation  The Department of Treasury provided no formal written comments  In addition, DOL, IRS, Treasury and two third-party subject matter experts provided technical comments, which we incorporated in the report, as appropriate As agreed with your staff, unless you publicly announce the contents of this report earlier, we plan no further distribution until 30 days from the report date  At that time, we will send copies to the Secretary of Labor, Secretary of the Treasury, Commissioner of Internal Revenue, and other interested parties  In addition, the report will be available at no charge on the GAO website at http://www gao gov  If you or your staff have any questions about this report, please contact me at (202) 512-7215 or jeszeckc@gao gov  Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report  GAO staff making key contributions to this report are listed in appendix VI  The objectives of this study were to determine: (1) what are the incidence and amount of retirement savings being withdrawn early; (2) what is known about the factors that might lead individuals to access their retirement savings early; and (3) what strategies or policies, if any, might reduce the incidence and amount of early withdrawals of retirement savings  To examine the incidence and amount of early withdrawals from individual retirement accounts (IRA) and 401(k) plans, we analyzed the most recent nationally representative data available in three relevant federal data sources, focusing our analysis on individuals in their prime working years (ages 25 to 55), when possible  For consistency, we analyzed data from 2013 from each data source because it was the most recent year that data were available for all types of early withdrawals we examined  We adjusted all dollar-value estimates derived from each data source for inflation and reported them in constant 2017 dollars  We determined that the data from these sources were sufficiently reliable for the purposes of our report  First, to examine recent incidence and amount of early withdrawals from IRAs and the associated tax consequences for individuals ages 25 to 55, we analyzed IRS estimates based on tax returns as filed by taxpayers before enforcement activity published by the Internal Revenue Service’s (IRS) Statistics of Income Division for tax year 2013  Specifically, we analyzed the number of taxpayers reporting early withdrawals from their IRAs in 2013 and the aggregate amount of these withdrawals  To provide additional context on the scope of these early withdrawals, we analyzed the age cohort’s total IRA contributions and the end-of-year fair market value of the IRAs, and compared these amounts to the aggregate amount withdrawn  To examine the incidence and amount of taxes paid as a result of the additional 10 percent tax for early distributions, we analyzed estimates on the additional 10 percent tax paid on qualified retirement plans in 2013  Although IRS did not delineate these data by age, we used these data as proxy because IRS assesses the additional 10 percent tax on distributions to taxpayers who have not reached age 59½  Given the delay between a withdrawal date and the date of the tax filing, it is possible that some of the taxes were paid in the year following the withdrawal  We reviewed technical documentation and developed the 95 percent confidence intervals that correspond to these estimates  Second, to examine the incidence and amount of early withdrawals from 401(k) plans, we analyzed data included in the 2014 panel of the U S  Census Bureau’s Survey of Income and Program Participation (SIPP)—a nationally representative survey of household income, finances, and use of federal social safety net programs—along with retirement account contribution and withdrawal data included in the SIPP’s Social Security Administration (SSA) Supplement on Retirement, Pensions, and Related Content  Specifically, we developed percentage and dollar-value estimates of the incidence and amount of lump sum payments received and hardship withdrawals taken by participants in 401(k) plans in 2013  Because the SIPP is based upon a complex probability sample, we used Balanced Repeated Replication methods with a Fay adjustment to derive all percentage, dollar-total, and dollar-ratio estimates and their 95 percent confidence intervals  To better understand the characteristics of individuals who received a lump sum and/or took a hardship withdrawal in 2013, we analyzed a range of selected individual and household demographic variables and identified characteristics associated with a higher incidence of withdrawals  We applied domain estimation methods to make estimates for these subpopulations  (For a list of variables used and the results of our analysis, please see appendix III ) We attempted to develop a multiple regression model to estimate the unique association between each characteristic and withdrawals, but determined that the SIPP did not measure key variables in enough detail to develop persuasive causal explanations  The sample size of respondents receiving lump sums was too small to precisely estimate the partial correlations of many demographic variables at once  Even with adequate sample sizes, associations between broad demographic variables, such as age and income, likely reflected underlying causes, such as retirement and financial planning strategies, which SIPP did not measure in detail  Third, to examine the incidence and amount of unrepaid plan loans from 401(k) plans, we analyzed the latest filing of annual plan data that plan sponsors reported on the Form 5500 to the Department of Labor (DOL) for the 2013 plan year  We looked at unrepaid plan loans reported by sponsors of large plans (Schedule H) and small plans (Schedule I)  For each schedule, we analyzed two variables related to unrepaid plan loans: (1) deemed distributions of participant loans (which captures the amount of loan defaults by active participants) and (2) benefits distributed directly to participants (which includes plan loan offsets for a variety of reasons, including plan loans that remain unpaid after a participant separates from a plan)  Because plan sponsors report data in aggregate and do not differentiate by participant age, we calculated and reported the aggregate of loan defaults identified as deemed distributions in both schedules  We could not determine the amount of plan loan offsets based on the way that plan sponsors are required to report them  Specifically, plan sponsors are required to treat unrepaid loans occurring after a participant separates from a plan as reductions or offsets in plan assets, and are required to report them as part of a larger commingled category of offsets that also includes large-dollar items like rollovers of account balances to another qualified plan or IRA  As a result, we were unable to isolate and report the amount of this category of unrepaid plan loans  To identify what is known about the factors that might lead individuals to access their 401(k) plans and IRAs and what strategies or policies might reduce the early withdrawal of retirement savings, we performed a literature search using multiple databases to locate documents regarding early withdrawals of retirement savings published since 2008 and to identify experts for interviews  The search yielded a wide variety of scholarly articles, published articles from various think tank organizations, congressional testimonies, and news reports  We reviewed these studies and identified factors that lead individuals to withdraw retirement savings early, as well as potential strategies or policies that might reduce this behavior  The search also helped us identify additional potential interviewees  To answer our second and third objectives, we visited four metropolitan areas and conducted 51 interviews with a wide range of stakeholders that we identified in the literature  In some cases, to accommodate stakeholder schedules, we conducted phone interviews or accepted written responses  Specifically, we interviewed human resource professionals from 22 private-sector companies (including 4 written responses), representatives from 8 plan administrators, 13 retirement research experts (including 1 written response), representatives from 4 industry associations, representatives from 2 participant advocacy organizations, and representatives from 2 financial technology companies  We conducted in-person interviews at four sites to collect information from three different groups: (1) human resource officials in private-sector companies, (2) top 20 plan administrators or recordkeepers, and (3) retirement research experts  We selected site visit locations in four metropolitan locations that were home to representatives of each group  To select companies for potential interviews, we reached out to a broad sample of Fortune 500 companies that offered a 401(k) plan to employees and varied by geographic location, industry, and number of employees  We selected plan administrators based on Pensions and Investments rankings for assets under management and number of individual accounts  We selected retirement research experts who had published research on early withdrawals from retirement savings, as well as experts that we had interviewed in our prior work  Based on these criteria, we conducted site visits in Boston, Massachusetts; Chicago, Illinois; the San Francisco Bay Area, California; and Seattle, Washington  We held interviews with parties in each category who responded affirmatively to our request  In each interview, we solicited names of additional stakeholders to interview  We also interviewed representatives of organizations, such as financial technology companies, participant advocacy organizations, industry associations, and plan administrators focused on small businesses, whose work we deemed relevant to our study  We developed a common question set for each stakeholder category that we interviewed  We based our interview questions on our literature review, research objectives, and the kind of information we were soliciting from each stakeholder category  In each interview, we asked follow-up questions based on the specific responses provided by interviewees  In our company interviews, we asked how companies administered retirement benefits for employees; company policies and procedures regarding separating employees and the disposition of their retirement accounts; company policies regarding plan loans, hardship withdrawals, and rollovers from other 401(k) plans; and company strategies to reduce early withdrawals from retirement savings  In our interviews with plan administrators, we asked about factors that led individuals to access their retirement savings early, how plan providers interacted with companies and separating employees, available data on loans and hardship withdrawals from client retirement plans, and potential strategies to reduce the incidence and amount of early withdrawals  In our interviews with retirement research experts, financial technology companies, participant advocacy organizations, and industry associations we asked about factors that led individuals to make early withdrawals from their retirement savings and any potential strategies that may reduce the incidence and amount of early withdrawals  In our interviews with plan administrators and retirement research experts, we also provided a supplementary table outlining 37 potential strategies to reduce early withdrawals from retirement savings  We asked interviewees to comment on the strengths and weaknesses of each strategy in terms of its potential to reduce early withdrawals, and gave them opportunity to provide other potential strategies not listed in the tables  We developed the list of strategies based on the results of our literature review  Some interviewees also provided us with additional data and documents to assist our research  For example, some companies and plan administrators we interviewed provided quantitative data on the number of plan participants, the average cashout or rollover amounts, the percentage of participants who took loans or hardship withdrawals from their retirement accounts, and known reasons for these withdrawals  Some research experts also provided us with documentation, including published articles and white papers that supplemented our interviews and literature review  All data collected through these methods are nongeneralizable and reflect the views and experiences of the respondents and not the entire population of their respective constituent groups  To answer our second and third objectives, we analyzed the content of our stakeholder interview responses and corroborated our analysis with information obtained from our literature review and quantitative information provided by our interviewees  To examine what is known about the factors leading individuals to access retirement savings early, we catalogued common factors that stakeholders identified as contributing to early withdrawals from retirement savings  We also collected information on plan rules governing early participant withdrawals of retirement savings  To identify potential strategies or policies that might reduce the incidence and amount of early withdrawals, we analyzed interview responses and catalogued (1) company practices that employers identified as having an effect in reducing early withdrawals and (2) strategies that stakeholders suggested that could achieve a similar outcome  GAO is not endorsing or recommending any strategy in this report, and has not evaluated these strategies for their behavioral or other effects on retirement savings or on tax revenues  Appendix II: Selected Provisions Related to Early Withdrawals from 401(k) Plans and Individual Retirement Accounts (IRAs) Requirements Provides an exception for distributions for qualified higher education expenses and for qualified “first-time” home purchases made before age 59½ from the additional 10 percent tax for early distributions Defines “qualified first-time homebuyer distribution” and “first-time homebuyer,” and prescribes the lifetime dollar limit on such distributions, among other things  Allows eligible individuals to make tax-deductible contributions to individual retirement accounts, subject to limits based, for example, on income and pension coverage  Provides for the loss of exemption for an IRA if the IRA owner engages in a prohibited transaction, which results in the IRA being treated as distributing all of its assets to the IRA owner at the fair market value on the first day of the year in which the transaction occurred  Defines a prohibited transaction to include the lending of money or other extension of credit between a plan and a disqualified person  Requirements Allows eligible individuals to make contributions to a Roth IRA that are not tax- deductible  Distributions from the account can generally be treated as a qualified distribution if a distribution is made on or after the Roth IRA owner reaches age 59½ and the distributions is made after the 5-taxable year period beginning when the account was initially opened  Defines a prohibited transaction to include the lending of money or other extension of credit between a plan and a disqualified person  Appendix III: Estimated Incidence of Certain Early Withdrawals of Retirement Savings 401(k) plans 401(k) plans ($1000 or more) 401(k) plans 401(k) plans ($1000 or more) 401(k) plans 401(k) plans ($1000 or more) Legend: * Sampling error was too large to report an estimate  In addition to the contact named above, Dave Lehrer (Assistant Director); Jonathan S  McMurray (Analyst-in-Charge); Gustavo O  Fernandez; Sean Miskell; Jeff Tessin; and Adam Wendel made key contributions to this report  James Bennett, Holly Dye, Sara Edmondson, Sarah Gilliland, Sheila R  McCoy, Ed Nannenhorn, Katya Rodriguez, MaryLynn Sergent, Linda Siegel, Rachel Stoiko, Frank Todisco, and Sonya Vartivarian also provided support  The Nation’s Fiscal Health: Action Is Needed to Address the Federal Government’s Future  GAO-18-299SP  Washington, D C : June 21, 2018  The Nation’s Retirement System: A Comprehensive Re-evaluation is Needed to Better Promote Future Retirement Security  GAO-18-111SP  Washington, D C : October 18, 2017  Retirement Security: Improved Guidance Could Help Account Owners Understand the Risks of Investing in Unconventional Assets  GAO-17-102  Washington, D C : December 8, 2016  401K Plans: Effects of Eligibility and Vesting Policies on Workers’ Retirement Savings  GAO-17-69  Washington, D C : October 21, 2016  Retirement Security: Low Defined Contribution Savings May Pose Challenges  GAO-16-408  Washington, D C : May 5, 2016  Retirement Security: Shorter Life Expectancy Reduces Projected Lifetime Benefits for Lower Earners  GAO-16-354  Washington, D C : March 25, 2016  Social Security’s Future: Answers to Key Questions  GAO-16-75SP  Washington, D C : October 27, 2015  Retirement Security: Federal Action Could Help State Efforts to Expand Private Sector Coverage  GAO-15-556  Washington, D C : September 10, 2015  Highlights of a Forum: Financial Literacy: The Role of the Workplace  GAO-15-639SP  Washington, D C : July 7, 2015  401(K) Plans: Greater Protections Needed for Forced Transfers and Inactive Accounts  GAO-15-73  Washington, D C : November 21, 2014  Older Americans: Inability to Repay Student Loans May Affect Financial Security of a Small Percentage of Retirees  GAO-14-866T  Washington, D C : September 10, 2014  Financial Literacy: Overview of Federal Activities, Programs, and Challenges  GAO-14-556T  Washington, D C : April 30, 2014  Retirement Security: Trends in Marriage and Work Patterns May Increase Economic Vulnerability for Some Retirees  GAO-14-33  Washington, D C : January 15, 2014  401(K) Plans: Labor and IRS Could Improve the Rollover Process for Participants  GAO-13-30  Washington, D C : March 7, 2013  Retirement Security: Women Still Face Challenges  GAO-12-699  Washington, D C : July 19, 2012  401(K) Plans: Policy Changes Could Reduce the Long-term Effects of Leakage on Workers’ Retirement Savings  GAO-09-715  Washington, D C: August 28, 2009 


Report 2:  Treasury completed its regulations for C corporation banks first  For C corporations, SBLF funds are treated as Tier I capital and the Treasury purchases senior perpetual noncumulative preferred stock (or an equivalent)  The stock pays a quarterly dividend on the first day of each quarter after closing of the SBLF capital program funding  Tier 1 capital is the core measure of a bank's financial strength from a regulator's point of view  It is composed of core capital, which consists primarily of common stock and disclosed reserves (or retained earnings) but may also include nonredeemable, noncumulative preferred stock  In contrast, S corporations and mutual lending institutions receive unsecured subordinated debentures from the Treasury, which are considered Tier 2 capital for regulatory capital requirements  The application deadline for C corporation banks was May 16, 2011  The application deadline for Subchapter S corporations and mutual lending institutions was June 6, 2011, and the application deadline for CDFIs was June 22, 2011  A total of 926 institutions applied for $11 8 billion in SBLF funding  Treasury approved more than $4 0 billion in SBLF financing to 332 lending institutions ($3 9 billion to 281 community banks and $104 million to 51 CDFIs)  SBLF recipients have offices located in 47 states and the District of Columbia  The average financing was $12 1 million, ranging from $42,000 to $141 0 million  Of the 332 lending institutions which received financing, 137 institutions had participated in TARP's Community Development Capital Initiative or its Capital Purchase Program  These institutions received nearly $2 7 billion in SBLF financing (66 8% of the total)  Treasury is required to publish monthly reports describing all transactions made under the SBLF program during the reporting period  It is also required to publish a semiannual report (each March and September) providing all projected costs and liabilities, operating expenses, and transactions made by the SBLF, including a list of all participating institutions and the amounts each institution has received under the program  Treasury must also publish a quarterly report describing how participating institutions have used the funds they have received  SBLF participants must submit an initial supplemental report to Treasury no later than five business days before closing  The report provides information from the institution's FDIC call reports or, for holding companies, from their subsidiaries' FDIC call reports, that Treasury uses to establish an initial baseline for measuring the SBLF participants' progress in making loans to small businesses  The initial baseline is the average amount of qualified small business lending that was outstanding for the four full quarters ending on June 30, 2010  It is derived by first adding the outstanding amount of lending reported for all commercial and industrial loans, owner-occupied nonfarm, nonresidential real estate loans, loans to finance agricultural production and other loans to farmers, and loans secured by farmland  Then, the outstanding amount of lending for large loans (defined as any loan or group of loans greater than $10 million), loans to large businesses (defined as businesses with annual revenues greater than $50 million), and the portion of any loans guaranteed by the U S  government or for which the risk is assumed by a third party is subtracted from that amount  The lending institution then adds back any cumulative charge-offs with respect to such loans since July 1, 2010  This last adjustment is done to prevent lending institutions from being penalized for appropriately charging off loans  Each SBLF participant's small business lending baseline is also adjusted to take into account any gains in qualified small business lending during the four baseline quarters resulting from mergers, acquisitions, and loan purchases  This adjustment is designed to ensure that dividend rate reductions provided to any SBLF participant correspond to additional lending to small businesses and not to the acquisition of existing loans  In addition, the cumulative baseline for all SBLF participants will decrease over time as SBLF participants repay their SBLF loans and exit the program  For example, the initial small business lending baseline for the 332 SBLF participants as of March 31, 2011, was $35 52 billion ($34 75 billion for 281 banks and $770 48 million for 51 CDFIs)  The small business lending baseline for the 50 institutions that continued to participate in the SBLF as of December 31, 2018, was $1 5 billion ($808 8 million for 7 banks and $714 5 million for 43 CDFIs)  Table 3 provides the number and type of SBLF participating institutions, the small business lending baseline, the amount of small business lending by participants, the change in small business lending by participants, and the change in small business lending by both current and former participants from 2011 to 2018  The number of SBLF participating institutions is declining as institutions repay their loans and exit the program  As Treasury anticipated, this decline has accelerated following the first quarter of 2016 because the dividend rates for C corporation banks and savings associations and for S corporation banks and mutual lending institutions were increased at that time (to 9% and 13 8%, respectively)  SBLF institutions are also required to submit quarterly supplemental reports, due in the calendar quarter following submission of the initial supplemental report and in each of the next nine quarters, to determine their dividend rate for the next quarter  Using information contained in the quarterly supplemental reports, Treasury announced in its April 2019 quarterly report on SBLF Participants' Small Business Lending Growth that, as of December 31, 2018 The 50 current SBLF participants (7 banks and 43 CDFIs) increased their small business lending by $1 347 billion over a $1 523 billion baseline  Since inception, the total increase in small business lending reported by both current and former SBLF participants is more than $19 1 billion over the baseline  All seven of the currently participating community banks and 39 of the 43 currently participating CDLFs increased their small business lending over baseline levels  Most current participants report that their small business lending increases have been substantial, with 43 of 50 current SBLF participants (86 0%) increasing small business lending by 10% or more  Treasury officials have praised the SBLF's performance  For example, on October 9, 2012, then-Deputy Secretary of the Treasury Neal Wolin announced that the SBLF quarterly use of funds report released that day "is further indication that the Administration's Small Business Lending Fund is continuing to help create an environment in which entrepreneurial small businesses can succeed and excel " He added that "banks in the SBLF program continue to show large increases in the lending available for small businesses to grow, create jobs, and support families in communities across the country " Some financial commentators have expressed a somewhat less sanguine view of the program's performance  For example, one commentator noted, after the release of the quarterly use of funds report in January 2012, that although the report of increased small business lending was positive news "it is difficult to isolate the proportion of new lending that would have occurred anyway" due to improvements in the economy  Another commentator noted that the data may have been skewed by SBLF participants who were entering the small business lending market for the first time, making the increases appear larger and more significant than they actually are; yet another noted that the reported growth in small business lending occurred over six quarters (since June 30, 2010) and that the results, although positive, are "not as impressive as it may seem " A commentator argued in September 2012 that "if the SBLF ends up being a success story, it will have been on a far smaller scale than either Obama or Congress had originally expected  What's more, it's become clear that even boatloads of financing won't change the fact that demand for the loans themselves has also fallen off, as small businesses themselves are reluctant to expand in a stagnant economy " In addition, on August 29, 2013, Treasury's Office of Inspector General (OIG) released an audit of Treasury's reporting of small business lending gains relative to small business lending levels prior to the lenders' participation in the program  The OIG found that "small business lending gains reported by Treasury are significantly overstated and cannot be linked directly to SBLF funding " Specifically, the OIG noted that "substantial amounts [$3 4 billion of the then reported $8 9 billion] of the reported gains occurred prior to participants receiving SBLF funding " As the OIG explained, the lending gains reported [by Treasury] were measured against the same baseline period that the Small Business Jobs Act of 2010 (the Act) instructs Treasury to use for setting dividend rates for repayment of the SBLF capital, which is the four calendar quarters [which] ended [on] June 30, 2010  However, measuring program performance against a baseline with a midpoint seven quarters prior to when most participants received funding inflates program accomplishments and is not responsive to provisions in the Act that direct Treasury to report on participant use of the SBLF funds received  The OIG also argued that the reported lending gains cannot be directly linked to the SBLF capital that Treasury invested in the financial institutions because the lending gains reported "represent all small business lending gains that institutions participating in the SBLF achieved, regardless of how the loans were funded " In addition, the OIG noted, among other findings, that "a relatively small number (35 or 11%) of SBLF participants accounted for half of small business lending increases between the baseline figure and December 31, 2012 " During the 112 th Congress, several bills were introduced to change the SBLF  None of the bills were enacted  For example, then-Senator Snowe introduced S  681 , the Greater Accountability in the Lending Fund Act of 2011, on March 30, 2011  Senator Snowe argued that While I would prefer to terminate this fund altogether, it is unlikely based on the current political environment, which is why we must work to protect taxpayers from some of its most egregious provisions  My goal with this legislation is to ensure that only healthy banks have access to taxpayer money, that they are required to repay loans within a reasonable period of time, and that small businesses find the affordable credit they need  The bill would have, among other things, required recipients to repay SBLF distributions within 10 years of the receipt of the investment; terminated the program no later than 15 years after the date of the bill's enactment; prohibited the Secretary of the Treasury from making capital investments under the program if the FDIC is appointed receiver of 5% or more of the institutions receiving an investment under the program; prohibited participation by any institution that received an investment under TARP (effective on the date of the bill's enactment); removed provisions allowing the Secretary of Treasury to make a capital investment in institutions that would otherwise not be recommended to receive the investment based on the institution's financial condition, but are able to provide a matching investment from private, nongovernmental investors; required the approval of appropriate financial regulators when determining whether an institution should receive a capital investment; and revised the benchmark against which changes in the amount of small business lending is measured from the four full quarters immediately preceding the date of enactment to calendar year 2007  In addition, H R  1387 , the Small Business Lending Fund Accountability Act of 2011, would have provided the Special Inspector General for TARP responsibility for providing oversight over the SBLF  S Amdt  279 to S  493 , the Small Business Innovation Research, Small Business Technology Transfer Reauthorization Act of 2011, would have prevented TARP recipients from using funds received in any form under any other federal assistance program, including the SBLF program  H R  2807 , the Small Business Leg-Up Act of 2011, would have transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund beginning on the date when the Secretary of the Treasury's authority to make capital investments in eligible institutions expired (on September 27, 2011)  The bill's stated intent was "to increase the availability of credit for small businesses " H R  3147 , the Small Business Lending Extension Act, would have extended the Department of the Treasury's investment authority from one year following enactment to two years and required the Treasury Secretary to provide any institution not selected for participation in the program the reason for the rejection, ensure that the rejection reason remains confidential, and establish an appeal process that provides the institution an opportunity to contest the reason provided for the rejection of its application  During the 113 th Congress, H R  2474 , the Community Lending and Small Business Jobs Act of 2013, would have, among other provisions, transferred any unobligated and repaid funds from the SBLF to the Community Development Financial Institutions Fund  The SBLF was enacted as part of a larger effort to enhance the supply of capital to small businesses  Advocates argued that the SBLF would help to address the decline in small business lending and create jobs  Opponents were not convinced that it would enhance small business lending and worried about the program's potential cost to the federal treasury and its similarities to TARP  Participating institutions are reporting they have increased their small business lending  However, as has been discussed, questions have been raised concerning the validity of these reported amounts  Specifically, as Treasury's OIG argued in its August 2013 audit, more than one-third of the reported lending gains at that time occurred prior to September 30, 2011, the quarter in which most SBLF participants received their SBLF funds; the reported small business lending gains reflect all of the small business lending gains that the participants achieved, regardless of how the loans were funded; and previous OIG audits "have shown that a large number of participants misreport their small business lending activity " In those previous audits, "50% or more of the institutions reviewed submitted erroneous lending data to Treasury, either overstating or understating their small business lending gains " In addition to questions related to the validity of the reported small business lending gains, any analysis of the program's influence on small business lending is likely to be more suggestive than definitive because differentiating the SBLF's effect on small business lending from other factors, such as changes in the lender's local economy, is methodologically challenging, especially given the relatively small amount of financing involved relative to the national market for small business loans  The SBLF's $4 0 billion in financing represents less than 0 7% of outstanding small business loans (as defined by the FDIC)  In terms of the concerns expressed about the program's potential cost, Treasury initially estimated in December 2010 that the SBLF could cost taxpayers up to $1 26 billion (excluding administrative costs that were initially estimated at about $26 million annually but actual outlays were $4 54 million in FY2014, $9 05 million in FY2015, $5 01 million in FY2016, and $3 4 million in FY2017)  Treasury based that estimate on an expectation that about $17 billion in SBLF financings would be disbursed  In October 2011, Treasury estimated the program's costs based on actual participant data  It estimated that the SBLF would generate a savings of $80 million (excluding administrative costs), with the savings coming primarily from a lower-than-expected financing level and, to a lesser extent, improvements in projected default rates "due to higher participant quality than expected" and lower market interest rates  Treasury issues a semiannual report on SBLF costs  In its latest semiannual cost report, released on August 16, 2018, Treasury estimated that the SBLF will "generate a lifetime positive return of $31 million [excluding administrative costs] for the Treasury General Fund " One issue that arose relative to the program's projected cost is the noncumulative treatment of dividends  Treasury's OIG reported in May 2011 that Under the terms set by legislation, dividend payments are non-cumulative, meaning that institutions are under no obligation to make dividend payments as scheduled or to pay off previously missed payments before exiting the program  This dividend treatment differs from the TARP programs, in which many dividend payments were cumulative  This change in dividend treatment was driven by changes in capital requirements mandated by the Collins Amendment to the Dodd-Frank Act  The amendment equalizes the consolidated capital requirements for Tier 1 capital of bank holding companies by requiring that, at a minimum, regulators apply the same capital and risk standards for FDIC-insured banks to bank holding companies  Under TARP, the FRB [Federal Reserve Board] and FDIC treated capital differently at the holding company and depository institution levels  The FRB treated cumulative securities issued by holding companies as Tier 1 capital, while FDIC treated non-cumulative securities issued by depository institutions as Tier 1 capital  In order to comply with the Dodd-Frank Act requirement that securities purchased from holding companies receive the same capital treatment as those purchased from depository institutions, Treasury made the dividends under SBLF non-cumulative  Additionally, given that Tier 1 capital must be perpetual and cannot have a mandatory redemption date, the 10-year repayment period in the Small Business Jobs Act cannot be enforced  Treasury addressed this issue by placing the following additional requirements and restrictions on participants who miss dividend payments: the participant's CEO [Chief Executive Office] and CFO [Chief Financial Officer] must provide written notice regarding the rationale of the board of directors (BOD) for not declaring a dividend; no repurchases may be affected and no dividends may be declared on any securities for the applicable quarter and the following three quarters; after four missed payments (consecutive or not), the issuer's BOD must certify in writing that the issuer used best efforts to declare and pay dividends appropriately; after five missed payments (consecutive or not), Treasury may appoint a representative to serve as an observer on the issuer's BOD; and after six missed payments (consecutive or not), Treasury may elect two directors to the issuer's BOD if the liquidation preference is $25 million or more  Treasury's OIG agreed that Treasury's equity investment policy is consistent with the legislation and that "it has reasonably structured the program to incentivize payment of dividends " However, it recommended that "Congress consider whether an amendment to the Small Business Jobs Act and/or waiver from the Collins Amendment to the Dodd-Frank Act is needed to make the repayment of dividends a requirement for exiting the program " In conclusion, congressional oversight of the SBLF is currently focused on the program's potential long-term costs and effects on small business lending  Underlying those concerns are fundamental disagreements regarding the best way to assist small businesses  Some advocate the provision of additional federal resources to assist small businesses in acquiring capital necessary to start, continue, or expand operations and create jobs  Others worry about the long-term adverse economic effects of spending programs that increase the federal deficit  They advocate business tax reduction, reform of financial credit market regulation, and federal fiscal restraint as the best means to assist small businesses and create jobs  The SBLF's Legislative Origin On March 16, 2009, President Obama announced the first SBLF-like proposal  Under that proposal, the Department of the Treasury would have used TARP funds to purchase up to $15 billion of SBA-guaranteed loans  The purchases were intended to "immediately unfreeze the secondary market for SBA loans and increase the liquidity of community banks " The plan was dropped after it met resistance from lenders  Some lenders objected to TARP's requirement that participating lenders comply with executive compensation limits and issue warrants to the federal government  Smaller, community banks objected to the program's paperwork requirements, such as the provision of a small-business lending plan and quarterly reports  In his January 2010 State of the Union address, President Obama proposed the creation of a $30 billion SBLF to enhance access to credit for small businesses: When you talk to small business owners in places like Allentown, Pennsylvania, or Elyria, Ohio, you find out that even though banks on Wall Street are lending again, they're mostly lending to bigger companies  Financing remains difficult for small business owners across the country, even those that are making a profit  Tonight, I'm proposing that we take $30 billion of the money Wall Street banks have repaid and use it to help community banks give small businesses the credit they need to stay afloat  In response to the opposition community lenders had expressed concerning TARP's restrictions in 2009, the Obama Administration proposed that Congress approve legislation authorizing the transfer of up to $30 billion in TARP spending authority to the SBLF and statutorily establish the new program as distinct and independent from TARP and its restrictions  The Administration's legislative proposal was finalized and sent to Congress on May 7, 2010  Representative Barney Frank, then-chair of the House Committee on Financial Services, introduced H R  5297 , the Small Business Lending Fund Act of 2010, on May 13, 2010  The House Committee on Financial Services held a hearing on H R  5297 on May 18, 2010, and passed the bill, as amended to include a State Small Business Credit Initiative, the following day  The House passed the bill, as amended to include a Small Business Early-Stage Investment Program, a Small Business Borrower Assistance Program, and some small business tax reduction provisions, on June 17, 2010  The House-Passed Version of the SBLF Title I of the House-passed version of H R  5297 authorized the Secretary of the Treasury to establish a $30 billion SBLF "to address the ongoing effects of the financial crisis on small businesses by providing temporary authority to the Secretary of the Treasury to make capital investments in eligible institutions" with total assets equal to or less than $1 billion or $10 billion (as of the end of the fourth quarter of calendar year 2009) "in order to increase the availability of credit for small businesses " The authority to make capital investments in eligible institutions was limited to one year after enactment  Eligible financial institutions having total assets equal to or less than $1 billion as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the SBLF in an amount not exceeding 5% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application  During the fourth quarter of 2009, 7,340 FDIC-insured lending institutions reported having assets amounting to less than $1 billion  Eligible financial institutions having total assets equal to or less than $10 billion as of the end of the fourth quarter of calendar year 2009 could apply to receive a capital investment from the fund in an amount not exceeding 3% of risk-weighted assets, as reported in the FDIC call report immediately preceding the date of application  During the fourth quarter of 2009, 565 FDIC-insured lending institutions reported having assets of $1 billion to $10 billion  Risk-weighted assets are assets such as cash, loans, investments, and other financial institution assets that have different risks associated with them  FDIC regulations (12 C F R  §567 6) establish that cash and government bonds have a 0% risk-weighting; residential mortgage loans have a 50% risk-weighting; and other types of assets (such as small business loans) have a higher risk-weighting  Lending institutions on the FDIC problem bank list or institutions that have been removed from the FDIC problem bank list for less than 90 days were ineligible to participate in the program  Lending institutions could refinance securities issued through the Treasury Capital Purchase Program (CPP) and the Community Development Capital Incentive (CDCI) program under TARP, but only if the institution had not missed more than one dividend payment due under those programs  Participating banks would be charged a dividend rate of no more than 5% per annum initially, with reduced rates available if the bank increased its small business lending  For example, during any calendar quarter in the initial two years of the capital investments under the program, the bank's rate would be lowered if it had increased its small business lending compared to the average small business lending it made in the four previous quarters immediately preceding the enactment of the bill, minus some allowable adjustments  A 2 5% to less than 5% increase in small business lending would have lowered the rate to 4%, a 5% to less than 7 5% increase would have lowered the rate to 3%, a 7 5% to less than 10% increase would have lowered the rate to 2%, and an increase of 10% or greater would have lowered the rate to 1%  Table A-1 shows the dividend rates associated with small business lending increases for C corporation banks and savings institutions under H R  5297   These rates were subsequently included in the final law  The bill also authorized the Secretary of the Treasury to adjust these dividend rates for S corporations "to take into account any differential tax treatment of securities issued by such eligible institution " Also, Community Development Financial Institutions were to be charged a dividend rate of 2% per annum for eight years, and 9% thereafter  SBLF applicants were also required to submit a small business lending plan to the appropriate federal banking agency and, for applicants that are state-chartered banks, to the appropriate state banking regulator  The plan was to describe how the applicant's business strategy and operating goals will allow it to address the needs of small businesses in the areas it serves, as well as a plan to provide linguistically and culturally appropriate outreach, where appropriate  The plan was to be treated as confidential supervisory information  The Secretary of the Treasury was required to consult with the appropriate federal banking agency or, in the case of an eligible institution that is a nondepository community development financial institution, the Community Development Financial Institution Fund, before determining if the eligible institution was to participate in the program  The bill specified that the SBLF would be "established as separate and distinct from the Troubled Asset Relief Program established by the Emergency Economic Stabilization Act of 2008  An institution shall not, by virtue of a capital investment under the Small Business Lending Fund Program, be considered a recipient of the Troubled Asset Relief Program " The bill also directed that all funds received by the Secretary of the Treasury in connection with purchases made by the SBLF, "including interest payments, dividend payments, and proceeds from the sale of any financial instrument, shall be paid into the general fund of the Treasury for reduction of the public debt " The Senate-Passed Version of the SBLF Title IV of the Senate-passed version of H R  5297 , which later became law, authorized the Secretary of the Treasury to establish a $30 billion SBLF to make capital investments in eligible community banks with total assets equal to or less than $1 billion or $10 billion  There were several differences between the Senate-passed version of H R  5297 's SBLF provisions and the SBLF provisions in the House-passed version of H R  5297   Specifically, the House-passed version of H R  5297 indicated that eligible institutions may be insured depository institutions that are not controlled by a bank holding company or a savings and loan holding company that is also an eligible institution and is not directly or indirectly controlled by any company or other entity that has total consolidated assets of more than $10 billion, bank holding companies, savings and loan holding companies, community development financial institution loan funds, and small business lending companies, all with total assets of $10 billion or less (as of the end of 2009)  The Senate-passed version of H R  5297 did not provide eligibility to small business lending companies  House-passed version of H R  5297 defined small business lending "as small business lending as defined by and reported in an eligible institution's quarterly call report, where each loan comprising such lending is made to a small business and is one the following types: (1) commercial and industrial loans; (2) owner-occupied nonfarm, nonresidential real estate loans; (3) loans to finance agricultural production and other loans to farmers; (4) loans secured by farmland; (5) nonowner-occupied commercial real estate loans; and (6) construction, land development and other land loans " The Senate-passed version of H R  5297 's definition of small business lending did not include nonowner-occupied commercial real estate or construction, land development and other land loans  Senate-passed version of H R  5297 had an exclusion provision prohibiting recipient lending institutions from using the funds to issue loans that have an original amount greater than $10 million or that would be made to a business with more than $50 million in revenues  The House-passed version of H R  5297 did not contain this provision  House-passed version of H R  5297 indicated that the incentives received in the form of reduced dividend rates during the first 4 5-year period following the date on which an eligible institution received a capital investment under the program would be contingent on an increase in the number of loans made  If the number of loans made by the institution did not increase by 2 5% for each 2 5% increase of small business lending, then the rate at which dividends and interest would be payable during the following quarter on preferred stock or other financial instruments issued to the Treasury by the eligible institution would be (i) 5%, if this quarter is within the two-year period following the date on which the eligible institution received the capital investment under the program; or (ii) 7%, if the quarter is after the two-year period  The Senate-passed version of H R  5297 did not contain this legislative language  House-passed version of H R  5297 included an alternative computation provision that would have allowed eligible institutions to compute their small business lending amounts for incentive purposes as if the definition of their small business lending amounts did not require that the loans comprising such lending be made to small business  This alternative computation would have been allowed if the eligible institution certified that all lending included by the institution for purposes of computing the increase in lending was made to small businesses  The Senate-passed version of H R  5297 did not contain this provision  House-passed version of H R  5297 indicated that an eligible institution that is a community development loan fund may apply to receive a capital investment from the SBLF in an amount not exceeding 10% of total assets, as reported in the audited financial statements for the fiscal year of the eligible institution that ended in calendar year 2009  The Senate-passed version of H R  5297 specifies 5%  House-passed version of H R  5297 would have required the Secretary of the Treasury, in consultation with the Community Development Financial Institutions Fund, to develop eligibility criteria to determine the financial ability of a Community Development Loan Fund to participate in the program and repay the investment  It provided a list of recommended eligibility criteria that the Secretary of the Treasury could use for this purpose  The Senate-passed version of H R  5297 provided a similar, but mandatory, list of eligibility criteria that must be used for this purpose  House-passed version of H R  5297 contained a temporary amortization authority provision which would have allowed an eligible institution to amortize any loss or write-down on a quarterly straight-line basis over a period of time, adjusted to reflect the institution's change in the amount of small business lending relative to the baseline  The Senate-passed version of H R  5297 did not contain this provision  The Senate's version of H R  5297 was agreed to in the Senate on September 16, 2010, after considerable debate and amendment to remove the Small Business Early-Stage Investment Program and Small Business Borrower Assistance Program, revise the SBLF, and add numerous other provisions to assist small businesses, including additional small business tax reduction provisions  The House agreed to the Senate amendments on September 23, 2010, and President Obama signed the bill, retitled the Small Business Jobs Act of 2010 ( P L  111-240 ), into law on September 27, 2010 

ground_truth: This report discusses runaway and homeless youth, and the federal response to support this population. There is no single definition of the terms "runaway youth" or "homeless youth." However, both groups of youth share the risk of not having adequate shelter and other provisions, and may engage in harmful behaviors while away from a permanent home. Youth most often cite family conflict as the major reason for their homelessness or episodes of running away. A youth's sexual orientation, sexual activity, school problems, and substance abuse are associated with family discord. The precise number of homeless and runaway youth is unknown due to their residential mobility and overlap among the populations. The U.S. Department of Housing and Urban Development (HUD) is supporting data collection efforts, known as Voices of Youth Count, to better determine the number of homeless youth. The 2017 study found that approximately 700,000 youth ages 13 to 17 and 3.5 million young adults ages 18 to 25 experienced homelessness within a 12-month period because they were sleeping in places not meant for habitation, in shelters, or with others while lacking alternative living arrangements. From the early 20th century through the 1960s, the needs of runaway and homeless youth were handled locally through the child welfare agency, juvenile justice courts, or both. The 1970s marked a shift toward federal oversight of programs that help youth who had run afoul of the law, including those who committed status offenses (i.e., a noncriminal act that is considered a violation of the law because of the youth's age). The Runaway Youth Act of 1974 was enacted as Title III of the Juvenile Justice and Delinquency Prevention Act (P.L. 93-415) to assist runaways through services specifically for this population. The act was amended over time to include homeless youth. It authorizes funding for services carried out under the Runaway and Homeless Youth Program (RHYP), which is administered by the U.S. Department of Health and Human Services (HHS). The program was most recently authorized through FY2020 by the Juvenile Justice Reform Act of 2018 (P.L. 115-385). This law did not make other changes to the RHYP statute. Funding is discretionary, meaning provided through the appropriations process. FY2019 appropriations are $127.4 million. The RHYP program is made up of three components: the Basic Center Program (BCP), Transitional Living Program (TLP), and Street Outreach Program (SOP). The BCP provides temporary shelter, counseling, and after care services to runaway and homeless youth under age 18 and their families. In FY2017, the program served 23,288 youth, and in FY2018 it funded 280 BCP shelters (most recent figures available). The TLP is targeted to older youth ages 16 through 22 (and sometimes an older age). In FY2017, the TLP program served 3,517 youth, and in FY2018 it funded 299 grantees (most recent figures available). Youth who use the TLP receive longer-term housing with supportive services. The SOP provides education, treatment, counseling, and referrals for runaway, homeless, and street youth who have been subjected to, or are at risk of being subjected to, sexual abuse, sex exploitation, and trafficking. In FY2017, the SOP grantees made contact with 24,366 youth. The RHYP is a part of larger federal efforts to end youth homelessness through the U.S. Interagency Council on Homelessness (USICH). The USICH is a coordinating body made up of multiple federal agencies committed to addressing homelessness. The USICH's Opening Doors plan to end homelessness includes strategies for ending youth homelessness by 2020, including through collecting better data and supporting evidence-based practices to improve youth outcomes. Voices of Youth Count is continuing to report on characteristics of homeless youth. In addition to the RHYP, there are other federal supports to address youth homelessness. HUD's Youth Homelessness Demonstration Program is funding a range of housing options for youth, in selected urban and rural communities. Other federal programs have enabled homeless youth to access services, including those related to education and family violence.