Lunch and Guest Speakers

CHAIRMAN POWELL:Good afternoon. I trust that you're enjoying your meal. Please continue. We have some time constraints here, so I'd like to get started. We had a great discussion this morning. And, this afternoon, we're also in for a treat. I'm looking forward to it.

I mentioned Reverend Floyd Flake this morning. He was not in the audience then, but he's here with us this afternoon. And he's going to serve on the panel in a moment. Dr. Flake, we're delighted you're here today. I told the group that you serve on the FDIC Advisory Committee. A lot of people don't know that, but I tell them jokingly that's really your claim to fame.

One little story about Reverend Flake that speaks to the man. When I went to New York to talk to Reverend Flake, I had not met him, but I'd heard about him. I had done some homework before asking him to serve on the FDIC Advisory Committee. He was telling us a little bit about his church, his vision and his ministry. I will never forget what he told me.

He said when he first started his ministry, the foundation was his faith and belief in Jesus Christ, and the focus was on economic issues and social issues. He said that he discovered he was going the wrong way, so he changed the mission and vision. His foundation remained the same, but the focus shifted to education. Education is why we're here today - economic literacy. I've watched him, I've heard about him, and I've talked to members of his church. That vision is solid and sound, Reverend Flake. So thank you for setting an example. Thank you for serving that part of New York, and thank you for serving your country. We're delighted you're here today.

Now, I'm honored to introduce you to Michael Oxley, a gentleman who is well known to this audience, a leader on Capitol Hill, a central figure in all the financial services matters in the United States Congress. Since becoming Chairman in 2001, Chairman Oxley has led his committee in tackling key issues in the financial services arena, and achieving a number of legislative milestones. One near and dear to me, and those of us at the FDIC, was the federal deposit insurance reform legislation that was overwhelmingly approved by members of the U.S. House of Representatives.

I'll cite a few others: one, the Sarbanes Oxley Act of 2002. We kid him a little bit about that. I told him that my granddaughters and my grandson will be reading in the history books about the Sarbanes Oxley Act, and I will be happy to tell them about it. I'll say now, sweetheart, that's two people, not one person. The Sarbanes Oxley Act of 2002, as you know, is a comprehensive new law to stop corporate scandals and accounting fraud. Also, there are a number of bills to assist this country in responding to the challenges of terrorism, affordable housing legislation to expand homeownership opportunities nationwide, and landmark legislation to address the enormous problem of identity theft.

As the Chairman of the Committee on Financial Services, Mike Oxley has demonstrated his commitment to promoting competition in financial markets, maintaining the health of capital markets, protecting investors, and ensuring the soundness of the banking system.

Chairman Oxley represents Ohio's Fourth Congressional District, and is serving his 11th term in Congress. I'll note that he is a graduate of Miami of Ohio, which had a big victory last night, and he is a graduate of the reigning national champions, the Ohio State Buckeyes. Chairman Oxley.

REP. OXLEY: Thank you, Mr. Chairman. If I'd only known, I would have brought my Miami hat that's the real Miami, folks Oxford, Ohio. Thank you, Mr. Chairman, for that wonderful introduction. It's good to see my former colleague, Floyd Flake, here, who when you were in Congress served on the Banking Committee, now the Financial Services Committee. Love to have you back. I know you have other responsibilities, but I know we don't pay enough. Tell me about it. Sounds like my wife. But it's good to be back. And let me say to Chairman Powell what a wonderful thing this symposium is, and the series of symposiums that you put together. This is my second opportunity, and the second time you've had to wear the Ohio State hat. That's why I come, by the way, so I can see the Chairman, and we have photographers out there to make sure we see him with his Ohio State hat on being a good Texan.

It's terrific that everybody can get together and talk about some of these very serious issues that confront us as citizens, and as people who are very interested in our financial footing in this country. And I'm proud to participate in this. And I know some of my colleagues this morning were here, as well.

This is, obviously, of fundamental importance to our economy, increasing education about and access to the banking system. As Chairman of the House Financial Services Committee, I'm often bogged down in the details of intricate legislation that can take a pack of lawyers and a bottle of aspirin to understand. It's not often I have the opportunity to speak about education, and I'm pleased to have that opportunity today.

Recent studies have shown that approximately 10 million Americans don't have bank accounts. That's a remarkable statistic. It means that nearly 3 percent of our population in this country is without the tools necessary to establish a credit history and participate in the credit markets. The financial dreams of so many Americans are absolutely dependent on establishing and maintaining a good credit history.

Currently, 3 percent of our population has no reasonable chance of achieving those dreams. Not only are those consumers unable to fully participate in our credit markets, they are also much more likely to be taken advantage of by scam artists and other unscrupulous operators, from predatory loans, to exorbitant and unnecessary fees, to disadvantages from a lack of simply shopping around, uneducated consumers face an additional tax that more educated consumers do not.

The Financial Services Committee has held two hearings related to this issue just this year. In June, we heard from Assistant Secretary of the Treasury, Wayne Abernathy, and National Credit Union Administration Chairman, Dennis Dollar, who testified on efforts to get more people into the financial mainstream.

In October, we heard testimony from experts on broadening access to the remittances market. And during these hearings, the theme that emerged time and time again was the need for education and encouragement. Educational campaigns that promote the fundamentals of personal finance, the need to save and provide a basic understanding of how credit works are the keys that unlock the mysteries of the banking system for an awful lot of people. Encouraging financial institutions to enter previously under served markets also lowers the unbanked rate.

In combination, these efforts are beginning to bear fruit. One specific area where the financial institutions have had recent success in serving the unbanked has been in the market for remittances. At least three major U.S. banks, and a handful of credit unions, have entered into the market for remittances. These institutions understand that today's remittances customer is tomorrow's depositor or mortgage borrower, and that cultivating these individuals makes long term good economic and business sense. We must commend these efforts and encourage more. They're moving us, clearly, in the right direction.

Not to be excluded, the public sector has also made some great advances in reaching the unbanked, from educational programs like the FDIC's Money Smart Initiative, to similar efforts at the NCUA and Treasury Department. We're making good headway.

Any effort to reach the unbanked market must balance the need to expand access to credit with a need to protect consumers. The FDIC has done exactly this in its recent Guidance to Examiners on Payday Lending. The agency was able to strike a difficult but appropriate balance in expanding access to small denomination short term credit, while protecting consumers from unscrupulous lending practices. My hat goes off to the FDIC for their leadership in this important area.

From a legislative standpoint, solving the problems of the unbanked is a daunting task. While law makers are always tempted to prescribe more regulations as a solution to the problem, this is a classic example of an issue that should not be addressed by greater regulations. It's an issue that Congress can take the lead on, by encouraging financial institutions to reach out to broader markets, and by assisting in educational initiatives.

On that front, I have co sponsored legislation offered by Representative Dave Dreier who, as many of you know, is the Chairman of the Rules Committee, which will require the Department of the Treasury to establish a media campaign to highlight the importance of financial literacy and foster a greater understanding of personal finance for all Americans.

The Dreier Bill would fit naturally with legislation that the Financial Services Committee and Full House approved to re authorize the Fair Credit Reporting Act. As many of you know, the Senate is considering that legislation this week. And with any luck, they'll pass it today so we can go to Conference.

The House version of that legislation, which we named the Fair and Accurate Credit Transaction Act, or FACT Act, is a piece of financial literacy legislation in its own right. The bill gives consumers the right to a free annual credit report, which will arguably do more to promote informed consumer choices than any measure passed by Congress in several decades.

As the Consumer Federation of America, Stephen Brobeck, said during one of our hearings on the bill, and I quote:

"In terms of educating consumers, making available a free copy of a credit report will do more than just about anything that I could think of. First of all, it would generate an enormous amount of media coverage, which people will have difficulty avoiding." And by the way, that was the news story I heard this morning on the radio coming in, was exactly that that the Senate was poised to pass a bill providing for a free credit report once a year for every American.

"It will also stimulate a great deal of demand for information about the data in the credit report and scores. And if that is properly explained by the credit bureaus, that will represent a very useful educational mechanism."

Similarly, the FACT Act's requirement that mortgage lenders provide applicants with a free credit score, together with information on the range of scores possible, and the factors that negatively affected the score, will both increase the transparency of the often confusing mortgage application process, and facilitate greater consumer awareness of how spending and borrowing habits can affect their eligibility and their credit.

Now to his credit, the Chairman of the Financial Institution Subcommittee, Spencer Bachus, who was with you this morning, held eight hearings in his subcommittee on the re authorization of the FCRA. Over 100 witnesses, everybody who had any ideas on the Fair Credit Reporting Act and all of the issues dealing with identity theft, and consumer information had an opportunity to testify.

I think, as I told Spencer, it was the classic example of how the legislative process ought to really work, where we sat down and worked in a bipartisan way to get a piece of legislation that we hope would be permanent so we could create a national system of credit throughout our country that is really the underpinning of our whole economic system. It is, indeed, the infrastructure of that economic system to be able to get credit. And it was interesting to see how the process worked out. It took over a several month period. We knew we were against a deadline of having to come up with a bill before the end of this year because of the expiration of the Act. And make no mistake about it, the Fair Credit Reporting Act, originally passed by Congress in `96, has had an enormous impact in a positive way on our economy and on credit.

As the FTC Chairman told us in his testimony, 14 percent of Americans move every year. We are the most mobile society in history. And it's one of the strengths of our economic system, is the ability of people to move from jurisdiction to jurisdiction, from state to state in search of a better economic opportunity, a better job. But we also have to make sure that when they secure credit, that they're operating under the same rules as they would in the state that they lived in previously. That's how important this legislation truly is to our economy, and it's amazing how the Committee really came together around that issue, as well as the identity theft provisions.

We found also, to our dismay, that according to the Federal Trade Commission who had just recently done a study, that 10 million Americans every year are victims of identity theft. And it's starting to soak in, and people are starting to understand it. You're already starting to see advertisements by credit card companies and others regarding identity theft. But what we tried to do in this legislation that we hope will be completed in the Conference over the next couple of weeks, was to provide an avenue for the consumer, to empower that consumer to have the ability to take care of those situations where they think they might be a victim of identity theft, and empower the consumer to follow that path. And we think it's a solid piece of legislation the strongest piece of privacy legislation that any Congress will have passed in many, many years. And we hope to get that bill to the President very soon.

This is an important aspect to our economy that we just can't overlook. The synergy between private sector programs and public sector awareness campaigns can have a dramatic impact on the lives of the unbanked. I'm confident with a continued commitment by both the private and public sectors, and with seminars and meetings like this, we can introduce more Americans into the financial mainstream.

Thank you very much for allowing me to appear again, Mr. Chairman. It's always good to participate in these events. And congratulations once again for having the foresight and the leadership to put these kinds of symposia together, where we can exchange ideas and that is in the best interest of our entire system, and I applaud you for your leadership. Thank you very much. It's good to be back.

DR. SMITH: In about a minute or two, we're going to have for you the second of the three very positive events here at the lunch. The second will be a 10 minute video. The video is entitled, "A New Opportunity: The Unbanked."

This morning, several of the questions that came, both the ones that were written and the ones that were asked from the floor, asked who are the unbanked? Who are you talking about? And several of the panelists responded in terms of people they have worked with directly and tried to help, and gave some of their own personal stories about how they and their families were at one point unbanked.

The video gives you an opportunity to hear some other persons who are unbanked. If you're interested in the video later, there will be an e mail coming to everyone in the audience giving you an opportunity, if you wish, to request it. So it'll take a minute or two to get it set up. Enjoy the folks at your table. And when it starts, you'll be seeing "A New Opportunity: The Unbanked". (Video shown.)

MS. CHAPA: Good afternoon. I'm Judy Chapa, Senior Advisor for Money Smart, and I have the distinct pleasure of introducing your next speaker. He is not just a friend and colleague, but someone who shares my passion for financial education, and who puts that passion to work everyday.

Let me tell you a little bit about Kelvin. And here again, it's a very brief introduction. Kelvin Boston grew up in public housing projects in South Wilmington, Delaware. He graduated from Lincoln University, and returned home to organize the South Wilmington Housing Counseling Service, which helps low income families become homeowners. By the way, today that is one of the largest housing counseling agencies in Delaware.

However, it was in 1979, while Kelvin was a Special Assistant for Community Relations for Wilmington's Mayor McLaughlin, that he met an African American economist who inspired him with the following words: "The social progress of Black America will always be tied to the economic progress of Black America."

Well, that was the start of Kelvin's illustrious multimedia career in educating the public about financial services and products. He began as a Financial Planner with American Express, and later turned to the airwaves to spread his message by producing the nation's first weekly financial television series for people of color, called "Financial Insight", which aired on cable television in 1990.

After several name changes and cable network homes, his shown became "Moneywise with Kelvin Boston", and became an official PBS series. Today, "Moneywise with Kelvin Boston" is the nation's leading multi cultural financial affairs series distributed on public television stations reaching 83 million households last year.

Kelvin is President of Boston Media, Inc., a financial information company responsible for producing not just this show, but the "Moneywise Minute" ABC radio program, the "Moneywise Report Newsletter", and "Moneywise Financial Literacy Outreach Program."

Please join me in welcoming the man that the New York Times has referred to as an outspoken voice for economic empowerment, Kelvin Boston.

MR. BOSTON: "I am one with the infinite riches of my subconscious mind. I am happy, healthy, wealthy, and successful. Money flows to me freely, copiously, and endlessly. I am always aware of my true self worth. I use my talent, and I am wonderfully, wonderfully blessed financially."

My friends, I know that many of you think you are here because of some corporate mandate, but I think that you're really here because you have a date with history. And such being the case, I'd like for you to really think about why you're here today. I'd like for you to just close your eyes for a moment and think about the reasons which drove you to come to this conference. And while you're doing so, I want you to think about the millions of people whose lives are going to be changed forever because you made this trip. And I'd like for you to understand the words of Dr. Joseph Murphy, who wrote: "In the power of your subconscious mind, that you are one with the infinite riches of your subconscious mind; that you are happy, healthy, wealthy and successful; that money flows to you freely, copiously, and endlessly; that you are always aware of your true self worth, and that you use your talents, and you are wonderfully, wonderfully blessed financially."

So I want to thank you. Give yourselves a round of applause for being here. I'd like to say good afternoon to our honored guests, distinguished panel members, Members of Congress, other notable political leaders, business leaders, banking leaders, community leaders, religious leaders, community leaders, ladies, gentlemen, and my beloved brothers and sisters all. It is, indeed, an honor for me to be here and participate in the FDIC's first national seminar on providing banking services to the unbanked. And I also want to thank Chairman Donald Powell for allowing me to be here today. I really appreciate it.

Before I begin my remarks, there is an important announcement that I must make. Evidently, someone in this room has lost a roll of $100 bills wrapped in a rubber band. Will this person please see me after the program, because we found your rubber band. Now we got that out of the way, we could move on.

Today I've been asked to come here and share with you why I think it's important for us to provide mainstream banking services to America's most financially vulnerable consumers. And with this task in mind today, I'd like to share a few thoughts on the topic.

Banking the unbanked or why we must invest in people, profits, and a forgotten promissory note. Why we must invest in people, profit, and a forgotten promissory note. All of you know that I am the host of the "Moneywise" PBS television series. That makes me laugh sometimes, but you may not know that I've dedicated my life to making sure that all Americans have the financial information that they need to live their lives with financial dignity.

This being the case, it still doesn't make me a banker or a policy maker, or a community developer who is committed to working in the trenches with the unbanked. But still, I hope that something I share with you today will be enlightening.

I must also ask that you forgive me, however, if I make my case too simply, because it's not my intention to try to help you run your business or tell you how to run your business. Basically, what I'm trying to do is just help you understand that if you're going to work with the unbanked, then you have to make an investment in the people, and investment in profits, and an investment in a forgotten promissory note.

During my remarks, I will try to answer three questions. The first question is, who are the unbanked? And we're going to go and talk a little bit about who are the unbanked. The second question we're going to try to answer is, who profits most by serving the unbanked? And third, we're going to talk a little bit about a forgotten promissory note.

Now to me, all these questions must be answered if we're going to help low income consumers become banking customers. The FDIC has invited organizations from around the country that have a vested interest in this topic. Some of you do represent governmental agencies and some of you represent banking and other financial institutions. And some of you represent the community, but all of you have a vested interest in the topic. And all of you, therefore, should understand the importance of investing in people, profits, and a promissory note.

Now I know that some of you already understand the importance of investing in people when you start talking about the unbanked. And at the same time, I understand that some of you don't care about people. What you care about is the profit.

Likewise, I understand that some of you understand the importance of profits when working in this community. And likewise, there are some of you who don't care anything about profits, because you're concerned about people.

And while both of these concerns are relevant and legitimate, people and profits, I want you to understand that neither can survive without the other, and neither can fulfill their ultimate purpose unless they're linked to a forgotten promissory note. You see, my friends, it's all about investing in people, investing in profits, and investing in a forgotten promissory note.

Now let's first turn our attention to the people. Who are the unbanked? According to a Federal Reserve survey, 10 percent of all American families have no banking relationship. Now this figure includes 25 percent African American and Hispanic Americans. This figure includes one fourth of all families with incomes less than $20,000. And this figure includes 50 percent of the families who are moving from Welfare to Work. That's a lot of people, that's a lot of people.

Reverend Flake, when I think about that number, I'm reminded of the words of the great Reverend Ike. He once said that: "The best thing you can do for poor folks is not be one." See, there's a lot of them. You know, you can't help them if you're down there with them, you understand.

But the financial writer, Stegman, he goes right to the point of our meeting today. He said in an article entitled, "Bringing More Affordable Financial Services to the Inner City", that "bringing the unbanked to the financial mainstream is important because one's banking status has a profound implication on the long term family self sufficiency."

He also wrote that, "Even when controlling for income and other factors, that low income households with a banking relationship, at least 43 percent of them are more likely to have a positive net worth, but who are they?"

You see, it's so easy to forget that statistics are really people. We do that all the time. But when we traditionally think about the unbanked, we think about the poorest among us, but we should also think and remember that the unbanked are also the working poor.

Often when we think about the working poor, we dismiss it. We just assume that they want to be poor. And we think that they always want to stay poor, and we forget the bad conditions that they endure so that many of us can have a comfortable life. And this was expressed in a book entitled, "Nickel & Dimed" by Barbara Ehrenreich.

She writes here, and it's a very good book she writes about how hard it is for the non poor to see the distress that poverty causes the unbanked. She talks about the lunch that consists of Doritos and hotdog rolls, leading to faintness before the end of the shift. She talks about the home that is also a car and a van, the illness or injury that must be worked through with gritted teeth because there are no sick days or health insurance, and the loss of a day's pay will mean that there's no groceries for the next one.

She concluded that these standards of living represent an emergency situation, and that when we think about what the poor and the working poor go through, we should think of it as a state of emergency. Many of our fellow Americans don't understand that living in poverty today represents a state of emergency.

Likewise, they don't understand that a family that has few financial assets, a family that today is unbanked can be bankable tomorrow. But more importantly, these people don't understand that people and families that are bankable today, can be unbanked tomorrow. They can be unbanked tomorrow.

You know, my friend, Dr. Dennis Kimber, likes to tell the story of a young boy, a third grader named Johnny. One day Johnny was in school and he was frantically drawing a picture of God. His teacher saw him drawing and saying Johnny, what are you drawing? Johnny said I'm drawing a picture of God. And the teacher said Johnny, you can't draw God, because no one knows what God looks like. Johnny kept on drawing and said they will in a minute.

My friends, in a minute, people who are bankable today can be unbanked. You see, because of the economic hardships of a jobless recovery, no one is spared from becoming unbanked. The hardships of a jobless recovery show no respect of person, education, class or zip code. And according to another book, and you see, I read all these books. I can't help it. This is entitled, "The Two Income Trap." For anyone who is married, you have to read "The Two Income Trap", by Elizabeth Warren.

This book just came out and she points out that families that are in the worst financial trouble today are not your usual suspects. They're not the very young tempted by the freedom of their first credit cards. They're not the elderly trapped by failing bodies and declining savings account. And they are not a random assortment of Americans who lack the control to spend within their means. But rather, they're people who consistently rank in the worst financial trouble today, they are two middle income married parents with children at home.

Her report on bankruptcy shows that married couples with children are more than twice as likely to file bankruptcy as their childless counterpart. And if these trends persist, more than 5 million middle income families with children will file for bankruptcy by the end of this decade. This means, my friends, that across this country, nearly one in seven families with children will declare themselves flat broke and a loser in the great economic game of life.

Now this is an important finding for our discussion today, because it illustrates the point that people who are bankable today could be unbanked tomorrow. But it's also important because as we are making plans to work with those who are unbanked today, we must also makes plans to work with those who may be unbanked tomorrow.

Finally, this is important, I think, because it brings home the whole point that everybody, regardless of their financial situation, is bankable. But in order to appreciate the bankability of the unbanked, you must first appreciate the human. You have to appreciate the human spirit of the unbanked. But, my friends, I'm sorry to say today that many of the organizations that service the unbanked do not recognize their humanity.

Such organizations, they appreciate the unbanked's Social Security number. They respect the unbanked's weekly check. They appreciate the fees that they collect from the unbanked, but they do not respect the personhood of the unbanked client. To these organizations, the real humanity of their unbanked client is invisible. And this should not come as a surprise to anyone because, indeed, in many respects the poor are invisible to all of us.

Again, I go back to the book, "Nickel & Dimed", where the author states that by some odd optical property, there's something that makes the poor almost invisible to their economic superiors. The poor, she continues: "They can see the affluent society on television and on covers of magazines, but the affluent rarely see the poor, because they do not catch sight of them in public places."

And they can't really see the poor, my friends, because the poor know how to dress. I mean, we look good. We may not have any money, but we look good, and that's what happens. These poor families will go to consignment stores and yes, Wal mart, and they will buy something that looks good. And most people will assume that they're in a more comfortable class. But my point, and the point that the author makes is that the affluent Americans' blindness to the poor is really caused because affluent Americans rarely share public spaces and services with their less affluent counterparts. And even people who provide services to the unbanked after today is over, the owners of those organizations go back to the suburbs, and the unbanked people go back to the inner cities.

You see, these people really don't share any public spaces or services other than their so called quasi banking relationships. But it's important for you who want to become the future bankers of the unbanked to understand that you have to make an investment in the people. You have to see the humanity in the people you serve, because once you do that, then you can understand that unbanked individuals are proud, hardworking and generous.

As one writer said: "The working poor are the major philanthropists of our society, that they neglect their own children so that the children of others will be cared for, that they live in substandard housing so that others' homes will be shiny and perfect, and that they endure the injustice of poverty so that our inflation as a country will be low, and our stock prices will be high. To be a member of the working poor, is to be an anonymous donor and a nameless benefactor to everyone else in our society."

That's why we have to understand and respect the personhood of the unbanked. And when you're able to recognize and respect, and appreciate the personhood of the unbanked, then you'll be able to help your unbanked clients overcome their past economic obstacles and embrace their future financial opportunities. But you have to first see the person.

I know some of you are wondering well, I don't know how I'm going to do this. This is going to be kind of hard to take back to my organization because I am a bank. And there are certain things and rules that I have to go by. When I think of this, I'm reminded of a story about a female entrepreneur who walked into a bank and she applied for a business loan. The banker looked at the loan application and said, you know, there are some questionable remarks on your credit application. The young lady replied yes, but my future is spotless.

My friend, when you work with the unbanked, you have to remember that regardless of their present economic circumstances, that their future is spotless. You know, many of your people that we call the unbanked, what they're really doing, they're facing probably one of the worst financial situations in their lives. That's what's happening to them. They're just down on their luck right now. And as people who are really the gatekeepers to the American Dream, you know, our job must be to help them get up when they're down. So to do that, my friends, when the unbanked come to see you, don't turn them away. When they're there and they're hopeless, don't forget about them. When they're in your office and you can't think of anything else to say, just remind them of the words of Donnie McLaughlin.

Just tell them that, you know, life is not about how many times you've been knocked down. It's really about how many times you get up after you've been knocked down. Just let them know that everyone falls down sometime in their lives. Let them know that people fall down, but that they can get up. That people fall down, but that they can get up. That people fall down, but that they can get up, and then let them know that you're there to help them get up.

You see, my friends, it's all about investing in people and profits, and in their forgotten promissory note. And we just talked a little bit about people. Now I want to try to answer this second question. Who profits most by providing banking services to the unbanked?

Now right now it seems as though everybody else is profiting but the unbanked. Someone said all right out there. It's okay. I just heard you. It's all right. You could talk to me, girl. Anyway, don't let this bow tie fool you, you know what I mean? But it seems today as though everyone is making a profit on the unbanked but the unbanked. Credit card companies are making profits, check cashing operations are making profits, banks are making profits, subprime lenders are making a profit, even community organizations that service the unbanked are making a profit. It seems like everyone is making a profit but the unbanked.

But it also seems as though all of these financial institutions are banking on the unbanked. You see, we think that the unbanked need us and our financial institutions, but it looks like we need them to exist. You know, it seems like everybody is banking on the unbanked, but since I know we had some discussions earlier about some of these other organizations and how they're making money on the unbanked, I won't go there, but there is something that we have to talk about as relates to our purpose for being here today.

We have to recognize that if banks indeed are going to become the major providers of banking services to the unbanked, that they, indeed, will be the persons or the organizations that are going to make the most money from servicing the unbanked. And, therefore, I just want to spend a few moments talking about how modern day banks make their money.

Now don't be afraid yet. This is a good discussion, but it is a needed discussion. Because, see, there is a lot of mistrust out there. And part of the mistrust comes because people don't understand how other people are making their money, so we're going to try to deal with this as best I can.

Now the first thing I think we should understand today is that contrary to popular opinions, bankers are the highest profession in the world, and doctors are second. Now this is because bankers must know how to sell and they must understand how to calculate profits. Now I'm not going to say too much about doctors, but they're good sellers, but I don't know about that profit thing, but that's another story. But no organization understands how to make a profit more than banks.

Albert Einstein said that: "The most powerful invention of man is compound interest." And I'm convinced that a banker created compound interest. Bankers know how to make a profit, but we need to understand that today's banks, they don't make money the way they used to 20 years ago. Then banks made their money the old fashioned way. They lent it to people, and they took people's money and had these deposit accounts, and they made money on those two basic services.

Today, these two sources of revenues represents only small fractions of banks' revenues. Today's modern banks are large businesses that earn the majority of their profits from the fees they generate by electronic payment services, trading, derivatives, mortgage processing, credit cards, and syndicated lending.

Gone are the days when banks basically lent their neighbors money. Those, indeed, were the good old days. Modern banks today, they don't even really have the opportunity to have their bankers meet with customers. That was the old days. Today many banks reserve that right for only 10 percent of their customers, which happen to be their most affluent. The other 90 percent of us must use some form of electronic banking services, or we must deal with a teller, not a banker, but a teller who can help us fill out a form or refer us to another mortgage broker, or some investment advisor.

Today you don't need to even go into a bank to be qualified for a loan. They can do it by phone. And, in fact, all the bank needs to know is your credit score to qualify you for a loan. If the credit score was good, then you'll get the loan. If the credit score does not meet their criteria, then you will not get the loan. But the point is, there does not have to be a human contact for the bank to give this loan.

And lastly, my friends, to talk about the good old days, in the good old days banks lent you their own money. They don't do that any more. Today many banks have partnerships or relationships with mortgage companies, and finance companies. Or it might even be one of their subsidiaries, and that company lends the bank customer money. Boy, I long for the good old days.

I'm reminded of a time that a banker called in an oil man to review his loans. We loaned you $1 million to revive your old wells, the banker said, and the wells went dry. The oil man replied yeah, but it could have been worse. Then we loaned you another $1 million to drill new wells, and they went dry. Again, the oil man replied it could have been worse. Then we loaned you another $1 million for drilling with some new equipment, and that equipment broke. The oil man said yeah, but you know, it could have been worse. And then the banker got upset. He said listen, I'm getting tired of you saying that. How could it be worse? The oil man said it could have been my money. Oh, I long for the good old days, you know. Today banks don't loan people their own money.

Well, we can see why banks like this need businessmen, because as we now understand, if banks can support their basic businesses and their basic business opportunities with fees, and if their mortgage departments can make profits by just referring other clients to other subsidiaries, then the bank never really has to put their hands in their own pockets; and, therefore, the banks don't need many assets to generate a large return of profits.

You know, the modern banking operations work well for the bank, but they don't work well for the unbanked, because the unbanked want to see their bankers. The unbanked want to see their bankers. You see, there is a lot of fear that the unbanked have. I mean, all of us have fear but you have to understand how you can be intimidated about just beginning to save money, or try to get yourself out of debt, or buy your first home. It's an intimidating factor, and so fear is quite prevalent.

And we all deal with fear. I mean, in today's again jobless recovery, and with the war in Iraq, and just issues as relates to terrorism, we all have to deal with fear. And sometimes the fear we have to deal with is not even our own fear. In fact, I remember when I started my business 10 years ago, I remember the fear that my mother instilled in me. The first thing I did when I decided to go into business was to call my mother. I was so excited. I said mom, I'm going to have my own business, and I heard this long loud silence on the other end of the phone. Then my mother said, "Baby, what you doing going into business? You're not a businessman. You don't know nothing about business." That's how my momma talks. And for a long time I thought she was right because we lost so much money those first couple of years. And I remember waking up having nightmares. And in my nightmares my mother would be chasing me around the room demanding the money that she gave me for my college education and saying, "You're not a businessman. You're not a businessman."

And it's interesting that, you know, in time we got things together. I hired some good people, got some advice. And about a year ago my mother had a birthday, and I was so busy I couldn't get her a gift, so I just sent her a check. And she called me and she said, "Baby, you're such a good businessman." But that was almost 10 years after she instilled this fear in me of owning my own business, you know what I mean?

Now, again I was fortunate that as I was dealing with my own fear, I got some help. But keep in mind that many of the unbanked, they don't have any help. There's no one that they can talk to that will help them get to the next level. And again, this is where you can help, my friends. But in order to help them, you're going to have to adopt a new business model. You're going to have to find some business model that will allow you to provide hands on service, and at the same time, make a profit.

Now can banks do this? I don't know, but I think that we can. I think that when I look around this room and I see the wealth of intellectual capital here, I'm sure that there has to be a business model here that we can use that will allow banks to make a profit, and at the same time, allow them to provide some personal attention to the unbanked.

Now I want you to know that I don't begrudge banks making profit. I expect banks to make profits. I understand that you have to make a profit so that you can stay in business, so I'm not going to get mad at you for following some sound business practices.

Now what concerns me is not when you make a reasonable or respectable profit by providing services to the unbanked. What I'm concerned about is when you have to make a ridiculous profit for providing services to the unbanked. You see, I don't mind if you make a couple of dollars on me by cashing my check, or wiring one of my family members some money. But I get very upset if you make $50 or $60 on me for providing that same service.

And likewise, I don't get upset if you want to charge me some interest for a small home improvement loan. But I'm going to get pretty damned mad if you try to take my house to pay for that small home improvement loan. But you see, overall I don't mind banks making a profit. And if I must say, I don't think that the unbanked are going to mind banks making a profit, because the point is that we want to make a profit too. And this, I think, is where we must have some discussion. Because, my friends, it bothers us as a people, as a race, as a group of consumers when we see banking institutions who want to become wealthier, but don't understand that we, as a people, whether we are banked or unbanked, that we want to be wealthier too.

And so there is, indeed, a new day. And just like the banks have a new business model, you should understand that the unbanked have a new business model too. And our business model is simple. It simply states that if we're going to help you become profitable, then we expect you to help us become profitable. Does that make sense to everybody? I mean, is anybody here? Don't have me talk to these walls now. But you understand what I'm saying.

You see, you have to understand that just because a person is unbanked, it doesn't mean that they don't have any wealthier aspirations. The unbanked do not always want to stay unbanked, and so we don't see any conflict with banks coming in to our communities, and how that's going to fit in with our new business models, because banks are about the business of making money. And banks' competitive advantage is supposed to be that they can provide the unbanked with access to depository accounts, mortgages and business loans.

So if you're not going to bring that into our community, why come? I mean, if you're not going to help us become wealthier, then why come? And, therefore, when banks plan to return to give services in unbanked communities, I'd just like to warn you that don't come to our communities with a credit counseling program and not be ready to teach us how to increase our net worth.

Likewise, don't offer us lower fees on banking services and not give us a savings account to put those savings in. And again, don't use or give us a credit card and not offer us a mortgage. And please, please, don't give us a car loan, and not give us access to a business loan. You see, for us, it's all about profits. Profits for the banks, and profit for the unbanked.

So I just wanted to warn you. I know again, some of you are saying boy, I don't know how we're going to do this. I'm going to have to take this back to I started to say boys, but the boys and girls upstairs. And indeed, you are. And when you have to explain this whole new business model to your superiors, my friends, and they don't really understand, remind them of the wealth aspiration of the unbanked, relate it to the story of the hungry man and the fish.

I mean, we all heard this parable that says that, you know, if you give a hungry man a fish, he'll eat for a day. If you teach a hungry man how to fish, he'll eat for a lifetime. And recently, I had the privilege of being with Reverend T.D. Jakes, and he took this parable to a whole new level. He said that if you show the hungry man how to buy the pond that's filled with fish, then he'll never worry about being hungry again.

My friends, what you must understand today is that the unbanked want to own the pond. That's what they want. They want to own the pond. So it's all about profits, profits for the bank, and profit for the unbanked.

Now we have reviewed the question as relates to people, and we reviewed the question as relates to profit. And I want to talk about the last question, as relates to this forgotten promissory note. But I must also say, as the Chairman was saying earlier, that indeed, the unbanked do need more financial education. We can't understate or overstate the importance of financial education, not only for this group of Americans, but for all Americans.

And I think of this, and I was just reminded of the story of the loving couple in Washington, D.C. They met at Howard University. They got married after they left Howard. They were lovers, and everyone referred to them as the good husband and the good wife. And they were married for many, many years. And one day without any notice, the good husband passed away. And the good wife, being the good wife that she was, she went down to the tombstone dealer and she purchased the most expensive tombstone that she could buy. And on this tombstone she had engraved the words "Rest In Peace."

Then the good wife went home to get her financial affairs in order. And she came across the good husband's life insurance policy, and to her surprise, she learned that the good husband had left the insurance money to another woman. This didn't bother the good wife. She was a good wife. Then the good wife came across the husband's mortgage and learned that the good husband had left their home to another woman. This didn't bother the good wife. Then the good wife came across the good husband's last will and testament, only to learn that the good husband had left all of his worldly possessions to another woman.

Well, this bothered the good wife, so she went back down to that tombstone dealer and she said listen, I don't want that tombstone. The man said it's too late. I've already engraved the words "Rest In Peace". The good wife said no, you don't understand. I'd like you to add some words, "Until I get there."

Now we all understand that the good wife is going to take care of the good husband whenever she catches up with him. But the point of the story is that the young lady would not have to go through that problem had she had some good financial counseling. You see, we all need good financial counseling.

But again, we talked a little bit about people, we talked about the profits. Now we must talk about the promissory note. And I'm reminded when I think of the promissory note of Dr. Martin Luther King, Jr. I'm reminded of the words he said many years ago, when he said, "Free at last. Free at last. Thank God Almighty, we're free at last." These are the famous words Dr. King told 250,000 people at the March on Washington.

Now, my friends, you may find this interesting. Today, African American ministers all across this country have changed this quote. Today instead of saying or leading their congregations in saying "Free At Last", they say "Rich At Last. Rich At Last. Thank God Almighty, we're rich at last."

Now to some who don't fully understand Dr. King's famous speech, they may take this as being disrespectful. But nothing could be further than the truth. You see, because on August 28th, 1963 when Dr. Martin Luther King stood on the steps of the Lincoln Memorial and delivered his famous speech, "I have a dream", his speech was not just about social equality. It was also about economic justice.

This speech has been called the speech that transformed America. And during this speech, Dr. King talked about his youngsters. He said eloquently that: "I have a dream where my four little children will one day live in a nation where they will not be judged by the color of their skin, but by the content of their character." And it is unfortunate that today that's the only thing that many people recall about this speech. It is unfortunate, because in doing so, they forget all the other social, political and economic issues that Dr. King was trying to address in this speech. So today, people can remember Dr. King saying, "I have a dream", but they can't recall him saying that "Black America lived on a lonely island of poverty in the midst of vast ocean of material prosperity."

Likewise, today people can remember Dr. King saying, "I have a dream", but they can't recall him saying that "America has given the Negro people a bad check which has come back marked insufficient funds. But we refuse to believe that the bank of justice is bankrupt. We refuse to believe that there are insufficient funds in the great vaults of opportunity of this nation."

My friends, Dr. Martin Luther King presented his symbolic promissory note to America more than 40 years ago. He presented it knowing that were it redeemed, that poverty and economic justice as we know it, would no longer exist in our society. But today, 40 years later, we are having a meeting to discuss why banks should provide banking services to millions of poor Americans. And, therefore, I must suggest to you that Dr. King's promissory note is still uncashed.

I must suggest to you that our ultimate goal today is in keeping with Dr. King's goal 40 years ago. Today, if we really understand where our work must ultimately lead us in serving the unbanked, then we, too, must say that we are committed to eliminating poverty and economic justice in this country.

And so the reason this conference is so important is because our cause is just. But to fully understand the justness of our cause, we must understand that serving the unbanked is connected to forming mutually profitable relationships that will ultimately eliminate poverty in this country.

In short, we must understand how people, and profits, and the promissory note of Dr. Martin Luther King, Jr. are all interrelated. You see, my friends, it's all about people, it's all about profits, it's all about the promissory note.

Today I will ask you to remember Dr. King's promissory note. I will ask you to link your efforts to provide banking services to the unbanked to Dr. Martin Luther King's dream of America. I will ask you to do so understanding that as King understood it, that once his check was honored, that the unbanked households of this country will be able to enjoy the richness of freedom and the security of economic justice.

I know that linking your work to the work of Dr. Martin Luther King, Jr. will not be easy. And, therefore, I ask that you find comfort where he found comfort. I ask you to remember that you can say many things about Dr. King, but one thing you must always say, and that is that he was a man of God. And as such, he understood the importance of the words "In God We Trust".

So, my friends, when things get tough for you, I just want you to take out a dollar bill. I want you to find the words "In God We Trust", and then I want you to think about those words. I want you to understand, my friends, that indeed, the unbanked community needs so much. But isn't it good to know that in God we trust.

We need homes, businesses, and entrepreneurs to grow. But isn't it good to know that we have some place to go. So when you try to love and share, and others return your love with despair, don't be discouraged. Know that somewhere someone cares. And when unforeseen challenges get in your way, don't give up. Don't be discouraged, and don't be swayed. In fact, when you're trying to succeed, never, ever give up. Go regroup if you have to. Cry, confide in a friend if you must, but always remember that in God we trust. Yes, the unbanked community needs so much, but isn't it good to know, I mean isn't it good to know, that in God we trust.

My friends, this afternoon I've tried to answer three questions. The first question was, who are the unbanked people that we wish to serve. The second question is, who profits by serving the unbanked. And last, the third question was, why is it important for us to link our cause to the cause and that forgotten promissory note of Dr. Martin Luther King, Jr.

I tried to answer these three questions by just reminding you that really it's all about investing in people, profits, and a promissory note. I'm here to tell you, my friends, that if we make this investment, that indeed, we can provide meaningful banking services to the unbanked. And by doing so, our country will be better, because we would have helped also to eliminate poverty and economic justice in this country. And we can do that, my friends, if we understand that "all Americans are one with the infinite riches of their subconscious minds, that all Americans are happy, healthy, wealthy, and successful, that money can flow to them freely, copiously, and endlessly. And that what they need to understand is how to become aware of their true self worth. And that when they do so, that all Americans can use their talents, and all Americans be wonderfully, wonderfully blessed financially." Thank you very much.

DR. SMITH: Let me thank Mr. Boston for his excellent presentation.

Next page: Panel III