"We propose that every American child, at birth, receive an electronic debit-card accessed, FDIC or NCUA (credit union) insured bank account, no different from how to you are assigned a Social Security Number, at birth."
"We propose that every American child, at birth, receive as a right, financial literacy education as part of their core studies in K-12 public schools."
As the nation mark's the 50th anniversary of President Lyndon Johnson's War on Poverty on January 8th, 2014, I cannot help but reflect upon the little known and even less talked about Civil Rights Act of 1968, popularly know a s the Fair Housing Act, which President Johnson signed into law on April 10th, 1968.
The Hair Housing Act was fast tracked through the House and Senate and sent to President Johnson's desk to be signed, six days following the assassination of civil rights leader Dr. Martin Luther King, Jr.
That said, both President Johnson and Dr. Martin King’s work and bold vision around poverty eradication was cut short. For President Johnson, the Vietnam War sapped his Presidency of the energy and moral authority it needed to fulfill the dream of the War on Poverty (even though very noteworthy advancements were in fact made by him), and unfortunately for Dr. King, it was an assassin's bullet.
50 years later, we are still asking some of the same questions as a nation, and there seems to be very few answers, and even less action.
Ambassador Andrew Young was senior strategist to Dr. King in the civil rights movement, and was the lead negotiator behind closed doors for Dr. King with the business community in the southern states during the movement; helping them to see for themselves the error of not allowing black patrons and customers to have a sense of colorless dignity, at leasy while in their stores. Years later, Ambassador Young was heard telling me and others, often, “…we succeeded in integrating the lunch counters, but we never succeeded in integrating the dollar.”
Or yet another poignant Young statement, when he said, “to live in a system of free enterprise, and not to understand the rules of free enterprise, must be the very definition of slavery." Or as I have said, "to not understand the language of money — financial literacy — and to not have a basic bank account, is to be a slave (in today's society)."
What we need to do to honor the life and legacy of both President Johnson and Dr. Martin King, Jr., is not to simply salute their past accomplishments, which were numerous and noteworthy, but to let their work live today through actions we can all take now to liberate the poor from the suffocating stench of poverty, and the depressing reality that accompanies financial illiteracy.
Ambassador Andrew Young and I propose the idea of a new Silver Rights Bill, which would give each and every American citizen a federally authorized bank account, at birth. Or more simply, A Bank Account for All.
According to the FDIC, approximately 40 million Americans are either unbanked or under banked in the riches country in the world. That means there are more Americans who don't have a bank account than didn't have the right to vote in 1962 (approximately 26 million).
We propose that every American child, at birth, receive an electronic debit-card accessed, FDIC or NCUA (credit union) insured bank account, no different from how to you are assigned a Social Security Number, at birth.
Right now a bank account is not a right, it's a privilege, which can be revoked at any time based on a subjective evaluation of that person as a risk profile. And while the risks of offering bank accounts to the poor and underserved have not disappeared, and yes, costs are real, most of the rules surrounding bank accounts were put in place during an era of paper checks, which were easy to float and even easier to bounce. And all of this then introduced the era of NSF (non-sufficient funds) charges, overdraft fees for debit cards, and the inclusion of countless millions on something called Chex Systems. Chex Systems (one of many services that catalogs the sins of bank account holders) is a list that is much easier to get on, than to get off. We can work through these challenges, and find mutually agreeable solutions, together.
We propose that every American child, at birth, receive as a right, financial literacy education as part of their core studies in K-12 public schools.
I recognize that there is a growing body of broad based support for financial literacy in public education in our states, and in the House and Senate, but more needs to be done. The House of Representatives has a Financial Literacy Caucus, and the U.S. Senate even issues an annual proclamation, recognizing April every year as Financial Literacy Month (our Gallup-HOPE Index results has even been sited in both Senate Resolutions, in 2012 and 2013), but more needs to be done.
Our President, President Barack Obama, a Democrat, has taken very concrete and criticially important steps to advance this agenda, establishing amongst other things the U.S. President's Advisory Council on Financial Capability, for which I was honored to sit and serve on.
And the president before him, President George W. Bush, a Republican, inspired by the on-the-ground work of my organization, Operation HOPE, signed a first ever executive order establishing financial literacy as U.S. federal policy. I considered that the very first silver rights bill of my generation.
Since that time, HOPE has educated more than 2 million adults and young people in financial literacy, financial capability and financial empowerment, all leading to financial dignity — but more needs to be done. More, even by ourselves, here at HOPE.
This global financial crisis was caused, yes by financial charlatans on Wall Street, but it was also aided and abetted by the financial illiteracy of you and me, on Our Street. Otherwise educated and smart Americans, who asked 'what was the payment,' when we should have been asking 'what's the interest rate.'
We must make sure this Great Recession never happens again, and that means partnering the power of consumer protection, as led by my friend a Director Richard Cordray at the Consumer Financial Protection Bureau, with the enabling power of consumer financial empowerment.The answer is not one or the other, but both. We are all in this thing together.
Finally, the question of how do we pay for all of this.
A bank account for all, and financial literacy education for every child. The answer lies in a lost opportunity behind us, and one sitting at our door, right now.
When TARP was first put into place by the Bush Administration, to stabilize the banking industry immediately following the financial crash, we had a once in a lifetime opportunity. Policy makers could have simply added a modest repayment protocol, adding as little as 2% of the principal repaid balance (from the banks back to the federal government), towards the creation of a new Federal Fund for Financial Literacy. To most people's amazement, financial literally is not federally funded in this country. I raise 90% of the funds needed to run Operation HOPE from private sources.
Doing this would have created hundreds of millions of dollars, for the expressed and exclusive benefit of generations yet unborn. To insure that this crisis of virtues and values happened again. But we missed this mark. In the midst of an all consuming and evolving crisis, we all simply missed the mark. We walked right by it.
But we have that opportunity once again.
JP Morgan Chase just paid a record $13 billion fine to the federal government, tied to financial crisis, and other major banks are in the midst of paying some that I have heard if between $20 million to upwards of $200 million, and more. Some of these funds will rightly go towards restitution of and for borrowers who were wronged in the mortgage crisis. But the question today remains the same. If we think it is a priority, for generations yet unborn, can we carve out what would actually be a fairly modest component of these federal fines, and refashion it as an investment in and for our nation's future? A Federal Financial Literacy Fund benefiting generations of American youth, yet unborn. Talk about legacy.
Dr. Martin Luther King, Jr.’s last book in 1968 was aptly entitled WHERE DO WE GO FROM HERE: Chaos or Community? These are the same questions, we are forced to ask ourselves today, on the cusp of the 50th anniversary of Johnson's War on Poverty.
The answer, is up to us. Let's go.
John Hope Bryant is founder, chairman and CEO of Operation HOPE