December 4, 2006
HP-185
Remarks of Anna Escobedo Cabral
U.S. Treasurer
U.S. Department of the Treasury
Before the Southwest Regional Conference on Reaching Unbanked People at the Border and Immigrant Communities
Edinburg,
And of course, thanks so much to all of you for taking the time out of your schedules to join us to talk about a topic that is critical to enhancing quality of life in our communities. And that is, how do we reach out to and improve financial service options for communities that have been traditionally underserved? In essence, how do we improve financial education at a variety of levels, and in particular for those who do not have an established relationship with a traditional financial institution, like a bank or a credit union? As you know, this is what we all commonly refer to as "banking the unbanked.
Well, a key way to do this is by convening like this and forging – or in some instances solidifying – local partnerships. These partnerships are the only way we can be successful in reaching out to people and helping them obtain the knowledge and skills they need to save money, buy a home, plan for retirement and to take a number of actions that will help create a better life.
This conference presents an ideal opportunity to tackle the reality that an estimated 10 million individuals in the
But the reason I think it's important that we're here in Texas is because border communities face particular challenges when it comes to helping their citizens take advantage of the wonderful opportunities our strong economy has to offer.
For example, we know border communities generally have lower incomes and higher unemployment levels than our nation as a whole. In fact, an estimated 23 percent of families living in rural U.S.-Mexico border communities are unbanked.
That number is more than twice the national average. And it represents a large number of people who don't have the tools they need to stay ahead when it comes to managing their personal finances.
All of you here know the pitfalls to not having a relationship with a financial institution. And while some may belong to a bank, we still face the challenge of helping them understand the multitude of services and resources available.
The fact is it costs more to be poor. I can tell you I know that from personal experience – from growing up in a family of very humble means. When you're in that type of situation, you really don't always know all of your options and sometimes don't have a true sense of how to take that first step to exercise those options. That is why I am also so personally concerned that left and right individuals who operate outside the financial mainstream face less secure, less convenient, and more expensive methods of carrying out their everyday transactions.
For example, low-income immigrants in this area may rely on wire transfer companies and currency exchanges to send money to their families. In addition, steps like securing a loan and navigating the system overall can be very difficult and very costly to low-income individuals.
All of these factors combined make it extremely difficult for those who are unbanked to save and accumulate wealth. As a result, they end up stuck in a standstill, unable to move out of their situation and into a world of more opportunities. This is really at the heart of what we're trying to do by working together – create more opportunities for people to save, invest and grow their wealth. Because if we can promote economic development for families and individuals, we can essentially raise the standard of living for the entire community.
Without question, reaching these communities to overcome these challenges is no simple task. In fact, much work lies ahead for us. But I think this issue is a critical one, and one that we can and we must confront. Because what we're really talking about when we talk about reaching the unbanked is creating opportunities. We're talking about improving quality of life and enabling people to participate in our mainstream economy. That, after all, is what the American Dream is all about. At the end of the day, we all strive to create a better life for ourselves and our children so that generations that follow will have even more opportunities.
So we really need to ask ourselves how can we do more to help these communities, these families, and these individuals open the door to opportunities and better choices? How can we work together better to reach the people who need this information the most?
That, quite frankly, is what this conference is about, and it's why I'm so grateful that all of you are here. Fortunately, we know at least part of the answer rests in pursuing those important partnership opportunities and expanding on existing ones. Again, it's about bringing together organizations with the resources and organizations with the distributions channels. It's also about drawing on personal experiences and success stories to inspire people into action.
The good news is that we are indeed well on our way. See when Congress established the Financial Literacy and Education Commission under the FACT Act of 2003, 20 different federal agencies came together to collaborate on this very issue and to determine what more needs to be done to improve financial education.
But we understand that the federal government can only do so much alone. We rely on the close partnerships we build with the private sector, with our state and local partners, and with community-based organizations to help us accomplish our goals. We value your advice, we welcome your insights, and we appreciate the expertise that each of you brings to the table. It's only by working together and listening to each other that we can achieve positive results.
We've already seen some good progress in this area that has been the result of working together. For example, Credit Unions have done a great job in partnering with Federal agencies to tailor resources to serve underserved areas. In addition, programs like the Department of Health and Human Services' Assets for Independence Program, which provides grants to support more than 300 Individual Development Accounts. These are savings accounts that offer matching funds to enable low income individuals and families to save enough to acquire buy a home, invest in a college education, or start a business. This is a wonderful program that helps low-income individuals take that first step.
But the success of this program is largely a result of community-based organizations or state and local governments partnering with private banks or credit unions. These are the types of partnerships that we aim to foster through this conference.
Throughout the day you will hear from a variety of experts, and you'll have the opportunity to share ideas and best practices. It is our hope that together we can identify new and creative approaches based on these discussions that will have positive implications on policy. I want to challenge you to think creatively on how you can develop innovative partnerships that can help open doors for individuals and enhance quality of life in our communities.
In addition, all of you here serve on the frontlines in your communities when it comes to delivering this message. You know how best to meet the needs of your communities. That's why we also hope this conference will provide a springboard to specific partnerships between some of you so that you can take what we discuss here and apply these ideas to your communities. That's how real change is affected. First and foremost, it begins here with all of you.
Again, I thank you for coming here today. This is an issue that I know is truly important to me and to Dan and his office at the Treasury Department as well as the Treasury as a whole. It's a true pleasure to be here with my colleague, JoAnn Johnson who will also share some insights with you.
I know you'll find the rest of today productive and valuable, and I look forward to our continued work together.
Now, I'll turn this back to Dan. Thank you