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Remarks by FDIC Chairman Sheila C. Bair at the 75th
Anniversary "Face Your Finances" Road Show Event

San Franciso, CA - July 22, 2008

Good afternoon and thank you for joining us today. 

Thanks, Stan, for that wonderful introduction, and for your great work at the FDIC.  Stan is one of our long-time veterans at the FDIC, and San Francisco is lucky to have him.

I hope all of you enjoyed your lunch and had a chance to chat with the other folks at your table about what's happening these days in the world of money and personal finance.

There are a lot of great folks here today, and we have an excellent panel to guide the discussion.

Before we get started I want to take a moment to recognize our local community affairs staff.

They're our boots on the ground here in San Francisco.  They've been very involved in the planning of this event.  I thank you all for your hard work.

Scene setter

We meet at a very critical time for the American economy.  There is a lot of uncertainty out there. 

People are worried about their jobs, paying their bills, and keeping their homes.  Higher prices for food and gasoline are making it harder for families to make ends meet.

On top of that, while the overall banking system is sound, some banks are under stress.

As you are very aware, the latest example of this came just a little over a week ago here in California.

While IndyMac may have been one of the largest bank failures on record, FDIC staff worked around the clock to reopen it on Monday morning for business as usual.

But let me be honest about the IndyMac closing.  It could have gone better.  No one should have to stand outside a bank branch worrying about their money.

Closing a bank is no easy task.  It can be a very complex process, especially for a bank as large as IndyMac.

So we're constantly striving to improve the process, and to make it as seamless and painless as possible for consumers.

There are lessons to be learned.  In particular, we're redoubling our efforts to make sure that bank customers know their rights, and fully understand them.

On the plus side, they had uninterrupted access to their accounts through ATMs, debit cards and check writing.

Not one of IndyMac's more than 200,000 customers lost a single penny of their insured deposits.

And the small number of customers who were over the limits are still covered for insured amounts, and had immediate access to half of their uninsured money.  And as assets of IndyMac are sold, they may receive even more.

IndyMac is a reminder to all of us that every consumer … young or old; rich or not so rich … needs to know about deposit insurance, and needs to know how to handle their money wisely.

They need to know how to access safe, traditional banking services - what types of accounts suit their needs the best, how to avoid high fees, and how to save to buy a home and to build wealth.

Today there is a tremendous thirst among consumers for knowledge.

• The calls to our consumer hotline are double from a year ago, with many people calling about whether their money is protected by deposit insurance.
• As you would expect, calls spiked the weekend of the IndyMac failure.  When told that her money at IndyMac was insured, one relieved caller said: "You mean I don't have to do anything?  Now I'll have a better weekend."
• I was in Los Angles a few months ago at a workshop for people facing foreclosure.  The people were lined up around the block waiting to get in and to talk to credit counselors and lenders about how best to fix their mortgages.  These were working families … homeowners who needed more information and a little educating about what makes for a sensible and affordable mortgage.

75 years of success

This year is the FDIC's 75th anniversary.

We've been protecting people's money since the Great Depression.  And like we saw with IndyMac, because of what we do - not a single penny of insured deposits has been lost during those 75 years.

We're the oldest and largest deposit insurer in the world.  And our system has worked so well over the years that today 100 nations now have some form of coverage.

We thought that our 75th birthday would be a very good time to renew our message of confidence and stability, and to reacquaint the American people with the virtues of deposit insurance.

One of the ways that we're doing it is by holding town-hall style panel sessions throughout the country.  We had a very successful kick off last week in Chicago, and I'm delighted that we're here today in San Francisco. 

San Francisco has a long and storied history as the financial capital of the West.  Some even call it the "Wall Street of the West."

San Francisco is one of the most diverse and active communities in the country.

People from all over the world come here to do business.  And in the process, they sustain the many small businesses and entrepreneurs that make up the local economy.

So I expect to walk away from here with a bundle of new insights and innovative ideas for bringing more consumers into the financial mainstream and teaching them how to do it.

Key questions

We'll be asking you to consider a couple of key questions during the discussion. 

• What are the obstacles to opening a bank account?
• Which kinds of bank accounts can best maximize wealth accumulation?
• What kinds of financial education can best help people make good judgments about taking out a mortgage or saving for retirement?
• What are bankers saying about the biggest roadblocks that consumers face in building assets and tapping mainstream banking?

We want you to think about solutions to these problems not only for San Francisco, but also for the rest of the country.

75th Anniversary campaign

Before we get to the panel discussion, I want to explain why and how we're marking the FDIC's 75th anniversary with a series of national news events and projects.  All are aimed at protecting our economic democracy for the next 75 years.

We're very proud of our history and what we've accomplished.

We've built confidence and stability into the American economy by keeping the banking system stable and secure, and by making sure there's a safety net for the average American in the form of deposit insurance.

Everyone who walks into a bank that displays a "MEMBER-FDIC" sign knows that an FDIC-insured checking account, savings account, or individual retirement account  - is the safest place in the world to put your money. 

On June 16, 2008 we launched a NATIONAL campaign to raise public awareness about deposit insurance.  We picked June 16 because it was 75 years to the day that President Roosevelt signed the law that created the FDIC. 

The campaign includes advertisements in major newspapers, magazines, lifestyle publications and on the internet.

The ads are designed to help explain how basic deposit insurance works - what the limits are, and where consumers can get additional information.

I hope everyone here today will visit our new 75th Anniversary web site to get all the details.

You'll find information on many other aspects of the campaign, including:

• For consumers, a new, easy-to-understand, one-page rundown on how deposit insurance works, and what the limits are.  This is a work in progress so we'd like any comments you might have.  I hope that when you leave here today, you'll take a look and then go to our anniversary website and let us know what you think. 
• I encourage you to also learn more about a new consumer education awards program for the best new ideas for expanding financial literacy. 
• The award's primary purpose is to recognize individuals and organizations that have succeeded in reaching consumers, from every background and in every neighborhood, in their community.  
• If there's someone you feel should be recognized, I hope you'll go to our anniversary website and nominate someone today. 
  
  Nominations are being accepted through the end of September.  The awardees will be announced at a final event in Washington, D.C. later this year.

• All these materials are included in the packet you received today.  And as I've said, they're also available through our anniversary website.

With that, let's get started with the panel discussion. 

Panel intro

We're privileged to have a panel rich in knowledge and experience in banking and personal finance.

I'd like to take a moment to introduce each of the panelists, and as I do so please join me on stage. 

• José Cisneros is San Francisco's Treasurer.    He was appointed to his post by Mayor Gavin Newsom in September 2004, and elected to a full-term in November 2005.  As Treasurer, he serves as the city's banker and chief investment officer, managing all tax and revenue collection. 
  
  Under his leadership, the city's tax delinquency rate is now the lowest-ever in the history of San Francisco.  This means more public services for the people in the Bay Area, and less pressure to increase taxes.
• Kathleen Pender has been writing the "Net Worth" column for the San Francisco Chronicle since 2000.  Her three-time-a-week column covers investing and personal finance.  She's been with the Chronicle since 1985, working as a reporter, assistant editor and business editor.

• Eric Weaver has spent his entire career as an advocate for low-income communities.  He is the founder and CEO of Opportunity Fund … an innovative, not-for-profit financial institution.
  
  The Fund uses market principles to help low-income people bridge the gap … in his words … between mainstream banks and people who had not been comfortable using a normal bank.  (He also has an MBA from Stanford, so he knows what he's talking about!)
• Victor Ramirez is a Community Relations Officer for Citibank.  He is responsible for developing and managing relationships with non-profit organizations in underserved areas of Los Angeles County … from the San Gabriel Valley to Long Beach, and from East Los Angeles to parts of the Santa Monica Bay. 
  
  Victor works closely with the Citigroup Foundation, recommending grant funding to local organizations for affordable housing, economic development, financial education, and community development.  

• Martha Lucey is the President & C.E.O. of ByDesign Financial Solutions.  As a strong advocate for personal finance education, Martha strives to ensure that Californians have access to high-quality, ethical counseling services and education.
  
  Most recently, Martha has been advocating for homeowners facing foreclosure.  She's been raising public awareness about the difficulties in finding workout solutions, and the need to find effective strategies to preserve homeownership.  

[Panel discussion begins.]

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