Ownership_1The National Summit on Economic and Financial Literacy

Keynote Remarks by

John Bryant

Founder, Chairman

Chief Executive Officer

Operation HOPE, Inc.

Sponsored by the National Council on Economic Education

March 3, 2005

National Press Club

Washington, D.C.

Needless to say, I am honored to be with you here today — but I didn’t really have a choice in the matter.  Dr. Duvall simply called my office and told my communications department that he needed a photo for the speech — he simply knew I wanted to give! Well, as usual, he was right.

I am indeed honored to respond to your call to action Dr. Robert Duvall, a true champion in the march for social justice in an economic era.

I want to commend NCEE for hosting this vitally important summit on economic and financial literacy. NCEE is a national leader in the area of policy development and a premier source of K-12 teacher training in economics and personal finance.

I would also like to commend some of my heroes and sheroes in the room today. People such as; Federal Reserve Bank of Boston President Cathy Minehan, a VIP Banking on Our Future HOPE Corps member with me in Boston, MA.; Laura Levine, executive director of the Jump$tart Coalition, who I quote endlessly and without shame; Professor Lew Mandell of the State University of New York at Buffalo; U.S. Senator Daniel Akaka of Hawaii; U.S. Treasury Department Deputy Assistant Secretary for Financial Education Dan Iannicola; Dara Dugay, director of financial literacy for Citigroup; Rhonda Mims, president of the ING Foundation and a regional board member and major partner of Operation HOPE.

I am here to speak on the topic, “the necessity for financial literacy in an Ownership Society.”

As you well know, the President has recently called for “an Ownership Society,” — and basically I agree with him.

I agree with him because even when good people hit bad times the government should be at most a springboard and not a mattress. People need the dignity that comes from achieving something through their own efforts.

At Operation HOPE we have learned that, given an informed choice, people really do want a hand up, and not a hand out.

We have learned through our work in more than 10 states, 16 cities, and right here in the District of Columbia, that there isn’t a welfare mother in America in her right mind, that doesn’t want her child to grow up to be intelligent, successful, hard working and tax paying, if for no other reason than to feel proud of them.

But you cannot give what you do not have;

…in a blind town, a one-eyed man is king;

…if you don’t know better you cannot do better;

…and it is “what you don’t know, that you don’t

know, that is killing you!

There is an old southern saying; “no matter how much I love you my son and my daughter, …if I don’t have wisdom, then I can only give you my own ignorance.”

I can only give you what I have.

The path to hell is paved with good intentions.

If I don’t know better, …I cannot do better. Education is the ultimate poverty eradication tool.

I agree with him because black America is the only modern race of people in the world today, that created a political powerbase, before we created an economic one. Ready, fire, AIM.  This done in a democracy, rooted in capitalism.

But this choice by black America was literally due to a lack of financial literacy.  Black America is not dumb nor stupid —- again, it is what you don’t know, that you don’t know, that’s killing you.

Following the civil war, blacks were promised 40 acres and a mule. After Lincoln’s assassination, this promise was revoked, by the same government that made it.

The legacy here is this — with respect to government; black America today tends to respond to government proposals not with a dose of some skepticism, which is actually healthy, but rather with cynicism, …which never is.

People often say that some blacks today lack a work ethic. Absent 40 acres and a mule, or the true American inspiration fueled by owning, working, and building something of your own, where exactly was this work ethic supposed to come from?

One could actually argue that there was a case to be made for sitting on one’s hands, at the time. From slave to share cropper, no one saw the fruits of their labor, and so many decided to not offer any; labor — I mean.

But the problem is that as a race of people some of us never stopped making the point, and then later, others forgot we were making a point at all.

Worse still, we never got a pick up course entitled “the necessity of financial literacy in an ownership society!”

Interestingly, was I talking about the 19th century of yesterday, or the 21st century of today?

Or maybe I was talking about 1968, because it was 1968 when Dr. Martin Luther King, Jr., the leader of the civil rights movement, said, “you cannot legislate goodness, nor pass a law to force someone to respect you.” He continued, “the only way to social justice, in a capitalist society, is through economic parity.”  Was this not a call for ownership, in an ownership society? Dr. King was assassinated three weeks before his march on Washington for what he called, the Poor People’s Campaign.

A campaign made up NOT of exclusively the black community, as was the early civil rights movement; but poor whites (there are more poor whites in America today than poor anybody else), poor blacks, poor Latinos, poor Asians (yes, there are poor Asians) and poor Indians. Moving them all up the economic ladder in America.

Or maybe I was referring to November 16, 2004, when I sat down over a long lunch with Ambassador Andrew Young, the former chief aide to the late, great Dr. King, who said, and I quote, “Dr. King and I, along with others, succeeded in integrating the lunch counter, the public building, and even the public school house — but never the dollar.” And “capitalism in a capitalist society, with no true access to capital and the knowledge to utilize it, is nothing more than a sophisticated form of slavery.” He closed by saying, “if Dr. King was alive today, THIS is the work that he would be doing…”

If you don’t know better, you cannot do better.

That is why Ambassador Young, our new national spokesman, and I will co-host A Day of HOPE with Andrew Young on April 12th, 2005, in Atlanta, Georgia, inclusive of a Banking on Our Future financial literacy teaching session at Jean Childs Young Middle School in Atlanta, a press conference announcing our commitment to educate every low wealth child in Atlanta in financial literacy, before 8th grade, over 5-years using a network of volunteer professional HOPE Corps members. Volunteers from institutions such as Citigroup, ING and Bank of America.

Thereafter we will host a forum at the Andrew Young School of Policy Studies at Georgia State University, with leaders from government, community — including the civil rights community, and the private sector, entitled “From Civil Rights to Silver Rights; The Dawning of a New Movement in America.”

We believe that if the civil rights movement was about race and the color line, all over the world, and the first civil right was the right to vote, then the silver rights movement of the 21st century, an economic era, will be about issues of class and poverty, and the first silver right — will be financial literacy!

And so, we must DO SOMETHING —-now.

Like yours, our conference will be focused on action.

In the words of Dr. Dorothy Height, “Ph.D’s are good. Ph.Do’s — are better!”

And so yes, I support the tenants of the President’s Ownership Society, …because it seems to be a first cousin of what we at Operation HOPE call the silver rights movement.

But with every opportunity there are challenges.

And because the President’s proposal has great potential, it also possesses potentially great risks, and challenges, if not carried out correctly. I am working with the President and the Administration in a genuine attempt, to “get it right.”

Yes, you can put someone into a new home, as the President has boldly proposed increasing minority homeownership by more than 5 million; a noble goal indeed. But you cannot keep them in a home, unless they are financially literate; particularly in light of rising interest rates and the risks associated with adjustable rate mortgages.

And then you have health management accounts; another name for a self-managed wealth account of sorts.

Or Social Security reform. As I told the President when I met with him, along with 20 other black leaders at the White House on January 23, 2005, private accounts could be a real boon for black and brown America, offering all an unprecedented opportunity to build a private wealth account AND PASS IT ON TO THEIR HEIRS. 

But here’s the rub; “how can we ask someone to manage their own Social Security account, when we are fairly sure they cannot manage their own checking account.”

As I said in the March 1st edition of USA Today on the issue, in order to be successful “Social Security reform will require a massive injection of mandatory, employer supported financial literacy education.”

If I don’t know better, I cannot do better.

Like the President, at Operation HOPE we beli
eve in the power of conversion.

Like converting check cashing customers into banking customers; in 2000 we partnered with Union Bank of California to acquire a 45% ownership interest in the largest check casher in South Central Los Angeles, Nix Check Cashing, with more than 600,000 customers PER MONTH. Many of them across the street from a bank! This was not simply an issue of market prices. There is a difference between being broke and being poor.  Being broke is a temporary economic condition. But being poor is a disabling frame of mind, and a depressed condition of the spirit, and we must vow never to be poor again. Education can make a difference. Education is the ultimate poverty eradication tool. When you know better, you tend to do better.

In 2002 UBOC opened 30,000 deposit accounts in six states, and Operation HOPE opened 3,000 accounts in South L.A.

In 2003, UBOC opened approximately 40,000 deposit accounts in six states, and Operation HOPE opened 4,000 accounts, in South L.A. And the bank had 1 million ATM transactions in these same part-nership locations with Nix. Last time I checked, you needed a deposit account for an ATM transaction.

Financial literacy was the grease on the gears of economic conversion.

Or converting renters into homeowners, and small business dreamers into small business owners. In 1996 we opened our first HOPE Center — a cross between a bank branch, and a Kinko’s for empowerment. One-stop shopping for changing your life. When people walk through the door they see a sign that says, “No Loan Denied.” That gives them their dignity back, and their hope. We approve you day one, subject to the resolution of your primary denial factors. Then together, with the client’s permission, we pull their credit report.

To date, Operation HOPE has funded more than $130 million in loans, from our partner pool of more than 250 banking, insurance, credit union and financial service industry partners, creating more than 850 low wealth homeowners and small business owners, and in 11 years of lending, NOT ONE HOME LOAN HAS EVER GONE BAD!

That is not magic, that is the power of financial literacy education. When you know better, you tend to do better.

Financial literacy is the grease on the gears of economic conversion.

P.S. In 2002, Operation HOPE became the first non-profit in U.S. history to build a bank branch, and sell it to a bank! A transaction valued at more than $1.8 million, with all proceeds reinvested in the mission of financial literacy, economic education and economic empowerment.

We now have seven HOPE Center locations, including one recently opened with Bank of the West in Oakland, California, and one recently built in that third world country called Anacostia, right here in Washington, D.C. —- on Good Hope Road.

A genuine, “ownership society” collaboration, between a non-profit organization, E*TRADE Bank, which made a multi-million dollar commitment, the Bush Administration, which made two significant program grants, the District of Columbia, and even companies such as Microsoft and Dell.

Or converting minimum wage workers into living wage workers with new job skills, which we do through our national network of Inner City Cyber Cafes, located within our HOPE Centers.

We have stopped calling people in minority communities low-income, because we have found in many cases, “income” or the lack thereof is but one of their challenges.

Rather, we call them “low wealth,” because according to a recent report by the Pew Center, African-American middle class had an average net worth of approximately $8,000, while white middle class had an average net worth of more than $88,000. The difference maker was homeownership, and stock ownership.

No, the issue was not making more money, but making better decisions with the money they made!

Once again, financial literacy is the grease that oiled the gears of economic conversion.

And finally, converting the economic uneducated into the economically literate! With our Banking on Our Future program, the only national urban delivery program for financial literacy education in the nation, having educated more than 145,000 urban youth, 35 youth at a time.

We are teaching youth the basics of a checking account, a savings account and the importance of credit and investment in their young lives, with 2,000 volunteer professional HOPE Corps members, teaching financial literacy in 750 schools, in 10 states, 16 cities and the District of Columbia.

Yes, financial literacy is the grease that oils the gears of economic opportunity for America’s next generation of leaders.

This said, unfortunately there is ample evidence that we have more of a current crisis, than a current opportunity, around an “ownership society” which places more decision-making responsibility on the average American.

And I mean the average American of any race.

When mainstream America has a headache, black America has pneumonia…but we are all sick!


80% of the U.S. economy is consumer driven, 80% of the government receipts for the State of California, are generated from income and sales tax, and yet no one is teaching our children Life 101 skills — the basics of a checking account, a savings account, and the importance of credit and investment, insurance, and the history of banking and financial services in this country.

According to 2001 CNN special report, half of all Americans live from paycheck to paycheck, and by 2004, according to the Wall Street Journal, that number was up to 70% of all Americans.

Middle class 30 years ago was one parent working, while one parent stayed home as a domestic engineer. Today middle-class is two parent’s working, the television and popular culture is raising your child, and you aren’t making any more money!

If you are living in a major city such as Los Angeles or New York City, and make less than $50,000 annually, you are struggling to make ends meet!

Nearly a quarter of Americans would be late on mortgages, rent or other bills if a single paycheck were even delayed, according to a 2003 poll by Automatic Data Processing.

The proportion of disposable personal income that Americans are putting into savings was about 8% in the 1970’s but has tumbled to less than 4% today, according to the National Center for Policy Analysis.

The number one cause for divorce in America

— is money. And according to the ABA Education

Foundation 58% of teens get their lessons about money from home.

According to the U.S. Department of the Treasury, more people filed for bankruptcy in 2002 than graduated from college in 2002 — a shocking statistic.


Many rightly put our hope in our kids — the leaders of tomorrow.

Impressively, American teens spend $172 billion annually, or more than $100 per week on average. (Los Angeles Times)

Well positioned teens stand to inherit $12 trillion over the next 20 years.

But wait. According to the Jump$tart Coalition, more than one million Americans filed for bankruptcy in 2000, and according to government statistics there were more than 1.5 million non-business bankruptcies in 2003 — the highest on record — up from 289,000 non-business filings in 1980 (American Bankruptcy Institute); and in prior years, the fastest growing group of bankruptcy filers are (consistently) young adults, between 18-24 years of age.

We are talking about a 50% increase in bankruptcies among young people age 25 and under. The fastest growing segment!

One-third of all college seniors have no idea how they will make the first payment on their student loans.

The average senior in college has four credit cards, approximately $7,000 in consumer debt and no job!

The average college junior receives numerous unsolicited credit card offers in the mail annually and has approximately $3,000 in college debt.

The average college student graduates college, according to Jump$tart Coalition, with an average of $20,000 of combined consumer debt and student loans.

In a year 2000 study conducted by the Jump$tart Coalition and the National Endowment for Financial Education, students in all fifty states were asked 30 multiple-choice questions on money management, savings, investment, and credit. The compiled results confirmed an average failing score of

51.9 percent. Of all students polled, only 6.7 percent achieved a “C” or higher.

Based on the results of the test, it was concluded that the majority of America’s young adults are not prepared to make sound financial decisions.

According to the Jump$tart Coalition for Personal Financial Literacy, 90% of high school graduates receive no personal finance education.

Against this backdrop you have schools such as Grossmont High School in El Cajon, California, where administrators have purchased and installed an ATM machine on campus. Principal reason — convenience for youth, and more than $2,000 in bounced checks from parents.

One-fifth of teenagers have debit cards. That’s 4% of students 12 to 15 years old that have cards, compared with 57% of 18 and 19 year olds (USA Today).

But let’s bring this even closer in view.

Just this week I taught a Banking on Our Future financial literacy course in a Detroit public school, and following the session a 10 year old boy walked up to me proudly to tell me about the $537.00 check he received every month. I asked him did he mean $57.00. He said no. He knew how much money the check was for — $537.00, he repeated. Naively, I said “this is great, where did you get this sort of money from and what are you doing with it?”

This kid looked at me with a smile on this face and said, “my daddy left it to me when he died, …and mommy uses it sometimes to pay the rent.”

I told this young man to go home and lovingly tell his mother that they needed to start saving at least 10%, and hopefully more like 25%.

This was this child’s college fund, or down payment on his first home — being flushed down the toilet of current day financial illiteracy.

The Bible says, “where there is no vision, the people perish.”

And I say, “watch how you live your life, it
may be the only Bible that anyone else reads…”

Or the young Hispanic young lady in a Banking on Our Future class in Maywood, California, which is a city of 30,000 which had no financial services at all, beyond an ATM machine in a 7-Eleven store, and a check casher, until we built a HOPE Center there — now a full service bank branch for California National Bank.

She came to the first class and sat silently, but by the third class she seemed agitated. By the forth class she was asking our volunteer HOPE Corps member to follow her home…

This story, I am told, is common in the Hispanic, Spanish speaking community. A 12- year old as “head of household.”

Postscript: she actually thought Bank of America, was the Bank —- of America!

Financial literacy is the grease oiling the gears of economic conversion.

Or the story of a group of parents in a city I promised the mayor I would not mention.

Several years ago, the parents and students got together to raise $100,000 to take the kids to Disneyland. As I understand it, they wanted to take approximately 100 students and chaperones, the trip would include airfare, hotel stay, food, entrance to the park and bus transfers from all locations.

The principal begged the parents not to spend this kind of money on a trip to Disneyland. Too many of the students did not have computers in the home. Too many of the students had no savings for a col-lege education. The school itself was in need of new computers and more high tech educational equipment.

The parents would not hear of it. They were upset and got offended that the Administration would even suggest such a thing.

The parents and students came together and worked hard. They sold candy and had other fundraisers to finance the trip. They successfully raised the money and spent every penny on the trip.

It is my understanding that during the first few days of their arrival, a number of students (not all of them) were caught shoplifting at one of the stores at Disneyland. It is my understanding that the group was asked to leave the Park, and were requested never to return.

This is a true story, unfortunately.

Financial literacy is the grease that oils the gears of change in an economic era.

If you do not know better, you cannot do better.

Ladies and gentleman, with the “ownership society,” we have both a challenge, and an incredible opportunity.  Together, we will decide which one remains.

Our five year goals are to:

Educate 5 million children in financial literacy; 1 million face to face, and 4 million online.

Recruit and train 25,000 HOPE corps members to teach financial literacy.

Fund $1 billion dollars in low wealth homeowner-ship.

Attract 1,000 of America’s leading private sector brands to our movement.

Spark a movement — a silver rights movement: a movement for financial empowerment

In closing, Federal Reserve Chairman Alan Greenspan said at the 2001 White House Conference on the New Economy, “there is only one irreversible asset in the 21st century; education and access, or information and access. Once you have these things, no one can take them away from you!”

Education is the ultimate poverty eradication tool.

Because when you know better, you tend to DO better.

Onward, with HOPE

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