FROM THE OFFICE OF PUBLIC AFFAIRS

Thank you, Dan, and thank you all for having me here today.

It’s always a pleasure to see Dan Mica… he is in a lot of the meetings I have with members of the financial community, and I want you to know that he does a very fine job representing you, the CUNA membership.

I enjoy having Dan in those meetings for a lot of the same reasons that I enjoyed coming to this meeting last year, and again today – and that has to do with the heart of the credit union community.

You are an extremely powerful group – in terms of dollars and influence – but you also have a lot of heart. You’re in the financial world to do good as well as to do business… your motto of “not for charity, not for profit, but for service” rings true, throughout your ranks. And it makes you a pleasure to work with.

When I came to this meeting last year, I was very new to my job. The President was promoting his Jobs and Growth Tax Cut plan, and I was eager to help him out.

Because I know that tax cuts work, and I knew that our recovering economy needed that kind of stimulus.

The President had inherited an economy that was in decline… one that was then battered by terrorist attacks and revelations of corporate corruption dating back to the 1990s.

I’m pleased to report to you, this year, that those tax cuts that the President and I agreed were necessary – and which the Congress thankfully passed – did work, indeed.

Homeownership is up, unemployment is heading down, and GDP growth has been strong.

The President’s tax cuts provided the stimulus that was necessary to turn our economic ship around… and they are now encouraging and allowing for the economic growth that is continuing into the future.

• Economic growth in the second half of 2003 was the fastest since 1984;
• New home construction was the highest in almost 20 years;
• Homeownership levels are at historic highs;
• Manufacturing activity is increasing;
• Inflation and interest rates are low; 
• Over 360,000 jobs  have been created in the past five months;
• Unemployment claims – both initial claims and continuing claims – are well off their peaks of last year, indicating improvement in the labor market;
• In the middle of this month, the Dow closed at a 32-month-high. This translates into more than three trillion dollars of growth in value in the markets.

These economic indicators all point to the same conclusion: economic growth is robust and will be sustained.

However, there is more to do.   We are not, by any means, satisfied.

There are still Americans who want to find work and cannot… and this Administration will not rest until that most critical need is met and until every American looking for work can find a job.

The President’s proposed budget, which we sent up to the hill a few weeks ago, addresses that need by continuing to focus on improving our economy… by making those tax cuts permanent, encouraging small business growth and investment. And by holding the line on spending. This combined effort is designed to cut our deficit in half in five years.

This issue of continuing to grow the economy is so essential… and I know that you understand that.

I see credit unions as playing an important role in economic growth.

Your dedication to small-business lending is one of the major reasons why I say that.

Small business is at the foundation of this great economy, and credit unions have been there for entrepreneurs when they needed you the most.

As of last year, credit unions were welcomed into the SBA lending programs, and I hope that has helped out both you and America’s entrepreneurs as much as this Administration hoped it would.

You know as well as I do: small business is where the jobs come from. We estimate that between two-thirds and three-quarters of recent net new jobs are coming from that sector.

That’s why we want to make small business tax cuts permanent, and that’s why I want to commend the credit union community for financing America’s hard-working small-business owners!

There is something that is especially true when we talk about your lending activity to the entrepreneurial community… and that is the fact that, as a group, you really understand the value of relationships, and of working together… it makes you unique.

This quality makes you valuable to your customers, and over the last couple of years has made you valuable to your country… because you’re working so well with the Treasury Department… we’re partners, working together to fight the war on terror.

Out of the horror of September 11th, 2001, came a tremendous resolve in the financial community to cut off the terrorists’ lifeblood: their money.

Institutions large and small have committed themselves to the task.

America’s credit unions have done everything that the Treasury Department has asked of you during this fight, and I want to personally thank you for your efforts.  In a very real sense, together we have forged a partnership in this fight.

For example, your compliance with the information sharing provisions of Section 314 of the Patriot Act has been exemplary.

Under our 314 process, law enforcement provides the names of suspected terrorists or significant money launderers to Treasury’s Financial Crimes Enforcement Network (FinCEN), which scrubs the names and, if appropriate, sends them on to you. We’ve asked that you then search your recent account and transaction records for potential matches, and report them back to FinCEN.

You’ve done it, and our country is safer because of it.

We understand that the 314 process is an extraordinary tool… it is one that provides law enforcement with valuable leads to follow the money trail.  And without your help it would be useless.

We’ve also asked you to establish risk-based procedures to verify the identity of your customers who open accounts, pursuant to section 326 of the Patriot Act.   While we insist that you form a reasonable belief as to the customer’s identity, we have also worked hard to ensure that the regulation give you the flexibility to decide which forms of identification you will accept to verify customer identity.  This reflects our judgment that you are in the best position to make such decisions.  We believe this flexibility enhances the effectiveness of this regulation.

And we’re always looking for ways to provide you with more and better guidance concerning FinCEN’s regulations.  This is our part of the bargain, our half of the partnership.  So let’s keep up the dialog… let us know when we’re not clear, or when we can do better – because the better our regulations are understood by you, the more successful our critical enforcement efforts will be.

So please know that we appreciate our working relationship on the war on terror, and that we view you as a partner in other critical ways, as well.

You’re a partner in economic growth, as I mentioned before.

You’re also a partner in the effort to increase financial literacy in this country.

You are closer to your customers than a lot of financial institutions are. You therefore have an opportunity to contribute in a unique way to financial literacy efforts.

I’m pleased to say that a multitude of individuals and organizations like yours– across the many agencies of government, among members of Congress, and throughout the private sector – are dedicating major resources to improve financial literacy in America.

In other words, there is a serious movement afoot, and it is a good one.

President Bush is dedicated to this cause, which is why the Treasury Department created the Office of Financial Education in May of 2002.

Its work was then recognized by Congress in Title Five of the Fair and Accurate Credit Transactions Act, which the President signed this past December.

Treasury’s Financial Education Office now serves as the supporting office for a new Financial Literacy Commission, whose work is to complement, encourage and sometimes coordinate the work of the many individuals and institutions that are committed to greater financial literacy in America.

I would also like to see the Commission identify some areas that need the most help, the quickest… and credit unions can help us do that.

For example: I think we have a tremendous opportunity to start fresh with a new generation… to ensure that tomorrow’s young adults understand how important it is to save, and how to protect themselves from identity theft, in the same way that they understand the basics of physical health or road safety.

There is a tremendous interest on the part of high school students to learn the financial facts of life: how to manage a credit card, how to save and invest, how important it is to save for retirement at the beginning of a career, not at the end.

When you consider the fact that the financial tragedy of bankruptcy is growing fastest among young adults in their early 20s, it becomes clear that we must work to satisfy the natural desire of young people to learn now and therefore reduce this problem for the next generation.

Another group that has an immediate need is our population of new immigrants to this country.

Many new immigrants come to America from places where consumer financial services are not common, where checking accounts and credit cards and mortgage loans are virtually unknown, and where a bank is not seen as a safe place to put your money.  They do not know how to get involved in the financial mainstream here, and so they remain outside of the mainstream, prey to the loan sharks and the financial predators. 

You and your staff are uniquely positioned to reach out to these groups and others in need of financial education to help bring them into the financial mainstream, where they can safely build up their assets, invest and save for their futures and their children’s futures.
As with so many other things, we accomplish the most when we work together. Whether it’s fighting terrorists, or teaching teenagers about financial responsibility, or helping entrepreneurs pursue their American Dreams.

I’m glad to work with the nation’s credit unions on all these efforts.

I thank you for the work you do, and the chance to speak to you today.

Have a great conference.