1
Money Smart News January 2004
IN THIS ISSUE
Message from the Chairman
FDIC Conference: Tapping the
Unbanked Market
Photo Essay
Money Smart: Get Involved!
Partner News
Message from the Chairman
The FDIC reached another important milestone recently when
the 100,000th copy of the Money Smart curriculum was sent to
the New Asia Bank in Chicago. The bank plans to teach Money
Smart classes in both Korean and Chinese in the New Year.
This accomplishment fits in well with this issue of Money Smart News, which fo-
cuses on outreach to the unbanked or underbanked. Recently the FDIC held a
conference at the National Press Club in Washington, DC, entitled: “Tapping the
Unbanked Market: Helping People Enter the Financial Mainstream.” This event
was an important first step in helping the industry reach out to an estimated 10
million American households that are "unbanked" or "underbanked"; they do not
have accounts at banks and other mainstream financial institutions. As a result,
these cash consumers – many of whom are recent immigrants -- pay excessive
fees for basic financial services, are susceptible to high-cost predatory lenders,
or have difficulties buying a home or otherwise acquiring assets.
These unbanked and underbanked consumers are the reason the FDIC intro-
duced the Money Smart curriculum two and a half years ago. They are the rea-
son we translated Money Smart into Spanish, Chinese, and Korean. A Vietnam-
ese version will be rolled out in February 2004.
A recently completed survey shows that at the end of 2002, more than 100,000
students had received instruction from the Money Smart curriculum. I feel certain
that the 2003 end of year survey will show that Money Smart continued to reach
the communities that need it most in 2003.
The interest and feedback we have received on the Money Smart curriculum has
been tremendous. Thanks to the help of organizations like yours, we are seeing,
and hearing from, people who have been able to enter the financial mainstream
and begin to develop more secure financial futures for themselves and their fami-
lies. We are hearing from bankers that offering outreach and education isn’t just
the right thing to do, it’s also the smart thing to do for the growth of their busi-
ness.
There are many ways financial institutions can attract and retain customers from
the unbanked population. Presenters at our Washington conference discussed
the issues and provided examples of practical solutions, which are summarized
in this issue of Money Smart News. A full transcript from the conference and a 10
-minute video produced for the conference, called "A New Opportunity: The Un-
banked" will be available shortly. We will notify newsletter subscribers via e-mail
with a link that will enable you to download the transcript and order the video free
of charge.
Last year was a banner year for Money Smart, and with your help I look forward
to communicating continued success of the program in 2004.
Money Smart News January 2004
IN THIS ISSUE
Message from the Chairman
FDIC Conference: Tapping the
Unbanked Market
Photo Essay
Money Smart: Get Involved!
Partner News
Message from the Chairman
The FDIC reached another important milestone recently when
the 100,000th copy of the Money Smart curriculum was sent to
the New Asia Bank in Chicago. The bank plans to teach Money
Smart classes in both Korean and Chinese in the New Year.
This accomplishment fits in well with this issue of Money Smart News, which fo-
cuses on outreach to the unbanked or underbanked. Recently the FDIC held a
conference at the National Press Club in Washington, DC, entitled: “Tapping the
Unbanked Market: Helping People Enter the Financial Mainstream.” This event
was an important first step in helping the industry reach out to an estimated 10
million American households that are "unbanked" or "underbanked"; they do not
have accounts at banks and other mainstream financial institutions. As a result,
these cash consumers – many of whom are recent immigrants -- pay excessive
fees for basic financial services, are susceptible to high-cost predatory lenders,
or have difficulties buying a home or otherwise acquiring assets.
These unbanked and underbanked consumers are the reason the FDIC intro-
duced the Money Smart curriculum two and a half years ago. They are the rea-
son we translated Money Smart into Spanish, Chinese, and Korean. A Vietnam-
ese version will be rolled out in February 2004.
A recently completed survey shows that at the end of 2002, more than 100,000
students had received instruction from the Money Smart curriculum. I feel certain
that the 2003 end of year survey will show that Money Smart continued to reach
the communities that need it most in 2003.
The interest and feedback we have received on the Money Smart curriculum has
been tremendous. Thanks to the help of organizations like yours, we are seeing,
and hearing from, people who have been able to enter the financial mainstream
and begin to develop more secure financial futures for themselves and their fami-
lies. We are hearing from bankers that offering outreach and education isn’t just
the right thing to do, it’s also the smart thing to do for the growth of their busi-
ness.
There are many ways financial institutions can attract and retain customers from
the unbanked population. Presenters at our Washington conference discussed
the issues and provided examples of practical solutions, which are summarized
in this issue of Money Smart News. A full transcript from the conference and a 10
-minute video produced for the conference, called "A New Opportunity: The Un-
banked" will be available shortly. We will notify newsletter subscribers via e-mail
with a link that will enable you to download the transcript and order the video free
of charge.
Last year was a banner year for Money Smart, and with your help I look forward
to communicating continued success of the program in 2004.
2
Money Smart News January 2004
Tapping Into the Unbanked Market
The National Press Club in downtown Washington was the venue, the FDIC was the sponsor and "Tapping Into the Unbanked
Market" was the topic as more than 300 bankers, bank regulators, congressmen and their staffs, and community leaders gath-
ered to examine ways to improve bank services to the millions of Americans who do not use traditional financial institutions or
services-the "unbanked."
Panels of experts examined a variety of topics, including identification of exactly who the nation's
estimated 10 million unbanked are, the role of financial education, how best to attract the un-
banked to banks, recent work in the Congress to address the issue and the role of community
leaders in working with financial institutions, regulators and Congress to improve the delivery of fi-
nancial services.
Michael Zamorski, Director, Division of Supervision and Consumer Protection, opened the sympo-
sium by introducing Chairman Powell. "A lack of financial education is one of several reasons why
10 million people in this country may be unbanked," Zamorski said. "That's why Chairman Donald
Powell is leading the FDIC in efforts like Money Smart."
Chairman Powell addressed how important the question of the nation's unbanked is to the FDIC.
"This issue is vital to the FDIC, to banks, to Congress, to our communities and to me," he said. The
Chairman noted that the topic is a complex one. He recalled stopping in a small town in rural Texas
on a recent trip. He noticed a number of people waiting in line at a check-cashing facility, a typical
financial services alternative. Casually dressed, Powell chatted with the people in line without iden-
tifying himself as a bank regulator. "I pointed out that there was a bank just down the street," the
Chairman recalled. "But they all had reasons for not wanting to go to that bank. Some of them did-
n't feel welcome, some wanted to remain anonymous, some didn't fully understand what banks do.
But a lot of persons who are unbanked know more about financial institutions than we think they
do. Banks need to do everything they can to meet these people on their own terms, answer their
questions, address their concerns. There are many ways banks can make money working with the
unbanked, but it's up to them to go out into the communities where people work and pay taxes and
buy groceries and teach Sunday school-you have to be in their community to get to understand
what they need."
Panel 1: Financial Education and Reaching the Unbanked - Perspectives from Congress
Panel 2: Laying Out the Welcome Mat: How to Attract (and Retain) the Unbanked"
Panel Three: Beyond Toasters: Account Incentives That Really Work, and Why"
Luncheon Speakers: Congressman Michael G. Oxley and Kelvin Boston
Panel Four: Thinking Outside the Bank: How Groups in Your Community Can Help You Reach the Unbanked
And the Survey Says?: A Case Study of Financial Education in Chicago
Concluding Remarks
Money Smart News January 2004
Tapping Into the Unbanked Market
The National Press Club in downtown Washington was the venue, the FDIC was the sponsor and "Tapping Into the Unbanked
Market" was the topic as more than 300 bankers, bank regulators, congressmen and their staffs, and community leaders gath-
ered to examine ways to improve bank services to the millions of Americans who do not use traditional financial institutions or
services-the "unbanked."
Panels of experts examined a variety of topics, including identification of exactly who the nation's
estimated 10 million unbanked are, the role of financial education, how best to attract the un-
banked to banks, recent work in the Congress to address the issue and the role of community
leaders in working with financial institutions, regulators and Congress to improve the delivery of fi-
nancial services.
Michael Zamorski, Director, Division of Supervision and Consumer Protection, opened the sympo-
sium by introducing Chairman Powell. "A lack of financial education is one of several reasons why
10 million people in this country may be unbanked," Zamorski said. "That's why Chairman Donald
Powell is leading the FDIC in efforts like Money Smart."
Chairman Powell addressed how important the question of the nation's unbanked is to the FDIC.
"This issue is vital to the FDIC, to banks, to Congress, to our communities and to me," he said. The
Chairman noted that the topic is a complex one. He recalled stopping in a small town in rural Texas
on a recent trip. He noticed a number of people waiting in line at a check-cashing facility, a typical
financial services alternative. Casually dressed, Powell chatted with the people in line without iden-
tifying himself as a bank regulator. "I pointed out that there was a bank just down the street," the
Chairman recalled. "But they all had reasons for not wanting to go to that bank. Some of them did-
n't feel welcome, some wanted to remain anonymous, some didn't fully understand what banks do.
But a lot of persons who are unbanked know more about financial institutions than we think they
do. Banks need to do everything they can to meet these people on their own terms, answer their
questions, address their concerns. There are many ways banks can make money working with the
unbanked, but it's up to them to go out into the communities where people work and pay taxes and
buy groceries and teach Sunday school-you have to be in their community to get to understand
what they need."
Panel 1: Financial Education and Reaching the Unbanked - Perspectives from Congress
Panel 2: Laying Out the Welcome Mat: How to Attract (and Retain) the Unbanked"
Panel Three: Beyond Toasters: Account Incentives That Really Work, and Why"
Luncheon Speakers: Congressman Michael G. Oxley and Kelvin Boston
Panel Four: Thinking Outside the Bank: How Groups in Your Community Can Help You Reach the Unbanked
And the Survey Says?: A Case Study of Financial Education in Chicago
Concluding Remarks