The Silver Rights Movement - The Unbanked as a New and Emerging Opportunity For You!

MS. GAMBRELL: Good afternoon. Well, we are coming to the end of this wonderful symposium. My name is Donna Gambrell. I'm the Deputy Director for FDIC's Division of Supervision and Consumer Protection. Like a worried mother hen, I was sitting, pacing and kneading my thumbs, and doing a number of things today, but I didn't have to worry because I had such a tremendous group of people, not only in you who are here, but certainly people who are working behind the scenes. Dr. Lyons, thank you so much for your comments.

We, at the FDIC, are always saying that we are continuing to learn always. And actually, it was the Chicago study that spurred us on to do even more in our efforts in the financial education area, to look even deeper, to work with organizations like Gallup, not only to identify the number of people who were forming banking relationships, but now moving to the next step in determining just exactly what behaviors are being changed.

Just for your information before you leave today, in the back of your notebooks there's a tab after that that looks at best practices, and asks for you to fax that form back to the FDIC.

Basically, what the form is asking for is your thoughts, examples, anecdotes, hard data on some of the best practices that you all have seen. And to be honest with you, I have to agree with my colleague from the Philadelphia Fed, who said that there has been a continuing theme today. And I think many of you heard that, and that is this real tension between using traditional approaches to bring the unbanked into the mainstream, versus non traditional approaches. And that includes partnerships, perhaps, with organizations that you may not have partnered with before. But I think it's an interesting question. I think it's a critical question that we have to put forward and think about how do we do that, and what's the most effective means to do that?

I now have the pleasure of introducing our last speaker today, and no matter what words I use, they will never be descriptive enough to describe John Bryant, who is the CEO and the Founder of Operation Hope, which is based in Los Angeles, California. So I will be very, very simple in my introduction. He is a good man. He is a good friend. He is a good partner. He has been working with the FDIC for the past year and a half on financial education efforts across the country.

He also has been able to extricate himself, and I don't even know how he did this, because I'm looking at his schedule. You don't know that I had your schedule in front of me, John Bryant, but I do, because he has been up since I don't know what time this morning. At 7 a.m. he had a talk show interview with a Cleveland television show. At 9 a.m. he was at the Cleveland Fed for a breakfast meeting. At 10 a.m. he was teaching financial literacy at the Cleveland Fed. I don't know at what point you got on a plane, but somehow he managed to get on a plane and get into Washington, D.C. on time to really just cap this wonderful symposium that we have had today. So without further delay, I'd like to introduce to you the CEO and Founder of Operation Hope, Mr. John Bryant.

JOHN BRYANT:Good afternoon. Hello, Ernest Skinner. First of all, I want to give honor to God who got me here somehow. Anybody who knows Atlanta to Cleveland knows it's not a very long flight. I left Atlanta at 4:00 yesterday, and I got to Cleveland at 3:30 this morning. The plane ran out of gas circling Chicago because they couldn't land. And I had and made a commitment to be in Cleveland at 8 in the morning. And I told them I was going to keep that commitment and asked God to help me, so I managed to get there at 4 this morning and do the T.V. show at 6 this morning. But I'm honored to be with you today. I'm honored that Chairman Powell is here, a true visionary, a good man, and I have some remarks for him in a second.

Now for all of you who may know me and are a little concerned that I'm your last speaker, no need for concern because I talked to my Reverend Cecil "Chip" Murray on may way here and he said adhere to the A.M.E. Doctrine of Public Speaking. Be good, be quick, and then be gone. So I know that brevity is the soul of wit, and I'm going to be brief. I've been told you guys are a little crispy. Hey, Linda Ortega. There are some incredible heroes and sheroes in this room. I know that you've had Ellen Seidman and a bunch of inspired speakers, so I'm just going to kind of try to wrap this up with a message about what we can do.

I call it the Silver Rights Movement. I'm not going to read a prepared speech. I'm just going to talk to you, but I'm going to go with an outline so I don't ramble. Item number 1, in order to do this work, I think you've got to have what I call an inspired perspective. The task you seek to undertake and master here is difficult and challenging on a good day with the wind blowing in your favor.

Someone once told me that success was going from failure to failure without loss of enthusiasm. Some of you will get that later. I think you've got to have a positive attitude if you're going to do this work. You've got to understand, you cannot have a rainbow without a storm first. It's a scientific fact that you cannot have a rainbow without a storm first.

Certainly, if you're going to be about this work, then you have to also be committed to what I call the three Ps; be positive, be proactive, and be progressive in your thoughts. Be positive, be practical, and be progressive in your thoughts.

Dr. Scott Peck wrote a book called "The Road Less Traveled." Many of you may know this book. It's been on the best selling list for 20 plus years. It's a 200 page book. The first line, the first sentence, the first page of this book states, "Life is difficult." Translation if you can't get with that statement, don't read the rest of the book, because no one promised you a rose garden. Nobody promised you that life would be free of grief or pain. Life is 10 percent what life does to you, and 90 percent how you choose to respond to it. Whether you believe you can or whether you believe you can't, you're right.

So first of all, with more than 10 million American households representing upwards of 65 million individuals outside of the traditional banking environment, the first thing I have to say is the obvious. No one of us here, no matter how smart, has the answer to this otherwise endemic problem. Otherwise, it would have been solved long, long ago. By the way, I'll start with myself. I don't have the answer.

Secondly, the reality of item number 1 should not mean that we don't try every ethical approach possible to get an answer, to get at an answer. And I don't know what your bible says, but my bible says where there is no vision, the people perish.

Third, you all didn't know you were going to have some church in here, did you? Third, let's all understand that moralizing and idealistic hand ringing alone, no matter how well meaning, will not I repeat, will not solve the multiplicity of chronic problems facing our under served communities like the one I grew up with, and grew up in, Compton, California and South Central Los Angeles.

Fourth, we have got to be about the business of doing something. It is with this in mind, and I commend my friends at the FDIC, including my hero, FDIC Chairman Donald Powell, the best dressed man in the administration. I'm going to get that tie before you leave, Mr. Chairman, who co taught a "Banking On Our Future" class with me in Anacostia last year, and will go back into a class with me and Mayor Anthony Williams later this year, who came to South Central L.A. with me over the summer on his vacation day and toured South Central Los Angeles with me, walked the streets, talked to the people, sat down with some bankers, listened to what they had to say, and encouraged them to do more. I don't know about you, but Chairman Powell certainly qualifies to me as an honorary black man.

I want to commend and thank my friend, Donna Gambrell, a true shero. And Nelson Hernandez, who I call Nelson Mandela, and Bob Mooney, and Judy Chapa, and all of the heros and sheros here, and my friend of the bible, Jodey Arrington, for all that you do.

And so the message here is to say thank you to the FDIC, for what? For doing something. To those who criticize what you do, I say I like what I'm doing much better than what you are not doing. I think we should stop at this moment and thank Donna Gambrell. This is hard work, folks. This is not easy. No good deed shall go unpunished, and Donna has done, and her team has done a great job in pulling this together, which leads me to my next, and probably most important point.

We should be about the business, I think, of delivering what I call practical hope. Within the framework of what's honest, ethical, and has integrity, and is doable, the question should be what can we do? Ph.D.s are good, but Ph.Dos are better. So what I have to offer to you today are models of the practical and the possible in an imperfect world.

Number two, believe in people. We don't do business with companies, governments, or organizations. We do business with people. Deepak Chopra has said we're not human beings having a spiritual experience. We are spiritual beings having a human experience. I believe that. There's not a welfare mother in this country in her right mind that doesn't want her child to grow up to be intelligent, hardworking, tax paying, if for no other reason than to feel proud of them. It's not a black issue, it's not a white issue, it's a motherhood issue. But you can't give what you don't have. In a blind town a one eyed man is king, when you don't know better, you can't do better than an old southern saying. Thank you for the charity laugh. No matter how much I love you, my son or my daughter, if I don't have wisdom, I can only give you my own ignorance. No matter how much I love you, my son or my daughter, if I don't have wisdom, I can only give you my own ignorance. The path to hell is paved with good intentions.

And so out of bad habit we pass down bad habits. Out of love we also pass down bad habits. Folks are not dumb or stupid. They're uninformed, or misinformed, and worse is what they don't know that they don't know, that's killing them. And when you come at this thing from a people place, you quickly really realize that the communities of the wealthless are different in this respect. There's a difference between being broke and being poor.

Being broke is an economic condition. Being poor is a disabling frame of mind, and a depressed condition of our spirit, and each of us must vow never, ever, ever to be poor again. My pastor has told me oftentimes it's not what people call you, it's what you answer to that's important, and never answer out of your name. And then I added, to argue with a fool proves there are two.

Number three, support an institution of change. The one that I decided to support was Operation Hope. I founded it in 1992 after the worst civil unrest in U.S. history. It was America's first non profit social investment bank, a budget of $61,000, one employee, and a vision to change the world and eradicate poverty. Linda was there with me. One employee, a vision to change the world, America's first non profit social investment bank, Michael Nathan, they said, non profit social investment bank? That's an oxymoron. And, John, you're a moron. I love when people dismiss me. I love when people suggest that the ideas have no merit.

Today we have nine non profit companies under Operation Hope. We have an annual budget of $6 million. This year we will raise $10 million cash, the best year of our history in the middle of a recession. We believe in a three legged stool of government, community, and the private sector working in collaboration and in partnership, because no one of these entities can eradicate poverty by themselves.

Supreme Court Justice Stephen Breyer said that our work that we are doing is the last most important piece of unfinished business in America today. If Dr. King was alive, this would be the work that he would be working on. It was the work he was working on in 1968 when he died. It was called the Poor People's Campaign. It was about poor blacks, poor Latinos, poor Asians, and poor whites, because there's more poor whites in America than poor anybody else. It was about moving them all up the economic ladder, because he realized you couldn't legislate goodness, and you couldn't pass a law to force someone to respect you. In a capitalist country, the only way to social justice is economic parity.

And so tying it from civil rights to silver rights, if the 20th century was about erasing the color line, the 21st century is going to be about class and poverty. So Operation Hope put together nine companies focused on poverty eradication. Today we have 130 bank partners with over $2 trillion in assets between them. We have funded $110 million in loans, creating 600 homeowners and 100 small business owners, and not one home loan has ever gone bad in nine years.

We focus on what I call the power of conversion. We convert check cashing customers into banking customers. We partnered with Union Bank of California to do something innovative. Now any of you who have heard me will know I hate check cashers. I think the morals of these check cashers are morally repressive. It's a morally repressive business. Every time you educate a customer, you lose them. You educate them, you lose them. I think it's a horrible business. I bought a check casher. If you can't beat them, buy them.

So we partnered with Union Bank of California, Rick Hartnack, and Navistar Financial known as Nix Check Cashing. Those of you who are familiar with California, they have 47 locations 600,000 customers, some of which are across the street, by the way, from banks. You figure that one out. And we bought 45 percent of Nix Check Cashing, and got them out of the check cashing business and into the conversion business, moving people up and out of poverty.

Last year, 2002 data showed 30,000 new accounts opened in a multi state platform from Union Bank of California, 30,000 accounts opened bank wide. We opened 3,000 of those accounts, or 10 percent of their entire account activity.

You can do well and do good. You can do well by doing good. And by the way, 30 ATM machines in the 46 or 47 Nix locations, the last time I checked were on target to have one million ATM transactions by the end of this year. Now you can't have an ATM transaction without a bank account.

We convert renters into homeowners. Do you know in South Central L.A. after the riot, 35 percent of the folks owned their own home, and 65 percent rented for the same cost of the mortgage payment. Isn't that interesting? If you knew better, you'd do better.

And guess what the voter turnout rate was in South Central L.A. in 1992 38 percent. It wasn't a black issue, or a brown issue. It was an enlightened self interest issue. It's called becoming a stakeholder.

My momma used to always say you better get off of my porch with that mess underline "my" to everybody hanging out on the street corner. The best policeman you can have is a homeowner. And so we have created Hope Centers, which is a cross between a Kinkos for empowerment and a bank branch. One Stop shopping for changing your life. And when you walk in the front door it says, "No loans denied".

Now the bank you can't do that. Let me tell you about the value of a partnership with a non profit. With the bank you can't do that. You must approve or decline day one. But as a non profit, I can do whatever I want, as long as it's legal. So we put up our own balance sheet. We approve you day one subject to the resolution of your primary denial factors. Translation Donna's cousin comes in. We pull her credit report. Whew, baby. It looks like a bus accident. Okay. But it's what you didn't know that you didn't know that was killing you, and I'm not going to judge you based on what you did yesterday, or your shopping spree with Donna last week. So it's from this day forward, you're going to take responsibility and you're going to move forward.

We then approve her day one, give her her hope back, subject to the resolution of her primary denial factors, which means credit counseling, case management, financial planning. We call it private banking for the working poor. We vertically integrate hope.

I know you have talked about going beyond economic literacy. This is what I'm talking about, making it practical. And so what we have done, 80 percent of what do at Operation Hope is education whether it takes us 30 days or three years, we don't give up on you unless you give up of yourself. So we give you credit counseling, and financial planning, and case management, and thick file underwriting, copies of utility bills, copies of rent statements, copies of phone bills. We'll give you financial CPR if you have to. If you don't have a downpayment, we'll open a savings account for you. For every dollar you put up, we'll grant you a dollar up to $5,000. As long as you buy a home, the money is your's.

Where does the money come from? Banks. Why did Hawthorne Savings with a billion dollars it had in assets at the time put up a quarter of a million dollars? Because they got charitable credit, they got CRA credit. They became a hero and shero in the community. They also go their $5,000 back. Why? They got the first right of refusal on that mortgage when they wrote the mortgage, after we did all of that credit counseling and case management. At the end of the day, Mrs. Sanchez became low hanging fruit. Everybody wanted to fund that loan. We had wrung all the risk out of it, so they funded the loan, and got $5,000 back from reasonable fees and interest on a $200,000 or a $180,000 mortgage. Doing well, by doing good.

So we funded $110 million plus. We have $170 million in outstanding lending commitments, 600 homeowners, 100 small business owners. We have 16,000 customers a month coming through three locations. And I'm proud to report, last year we became the first non profit in history to build a bank branch and sell it to a bank.

We are in the business of running ourselves out of business. You should not go to a Hope Center in Donna's high class neighborhood. You should not go to a Hope Center where Ernest Skinner lives. You should go to a bank, a Citibank, a Bank of the West, a Bank of America. We deserve those services, so as much as I love my model, we should be in the business of running ourselves out of business. And so, as soon as we could, we flipped it to a bank. Let them do the hard banking services. We stay there doing the soft banking services, so that our people will continue to be approved for loans.

By the way, we sold them for seven figures; the California National Bank, Hawthorne Savings Bank, Union Bank of California. We're now doing one in Oakland with Bank of the West and United Commercial Bank, and right here in Anacostia, a third world country in our nation's capitol, we're building one with eTrade Bank.

It is unacceptable in the wealthiest country in the world, we have a third world country right here in our nation's capitol. Four minutes from the White House, you have Pennsylvania Avenue with no sidewalks. We can do something about that. I'm coming home now.

The next thing we do is we convert minimum wage workers into living wage workers with new job skills. Greenspan once said that in the information age, the age we live in today, every economy goes through four ages; the agricultural age, the industrial age, technology age, and then the information age. In the information age, the irreversible asset is education and access, and information and access, because once you have those things, no one can take them from you.

I know that Chairman Powell in his opening notice, he said that someone once said if you open your brain and pour it in your purse, it was the best investment you could ever have, because no one can ever take that from you. Somebody once told me in a more crude way as I tried to get money out of them John, pick my brain, not my pocket.

So we partnered with UCLA Extension, Wells Fargo and SBC to create cyber cafes, in our Hope Centers because nobody ever drove by a bank branch and said ooh, a bank, to drive traffic into Hope Centers. We now have 800 students on backlog for 17 computer stations in three cyber cafes.

Finally, we convert the economically uneducated to the economically empowered. We call it Banking On Our Future. This is my proudest program. Banking On Our Future is the only national urban delivery platform for economic literacy in the country. We've educated 112,000 kids in checking, savings, credit and investment because kids are not dumb or stupid. It's what they don't know that they don't know that's killing them. It's what they don't know that they don't know that's killing them, so we have 1,000 Hope Corps members, bankers just like you in eight states across America, teaching children economic literacy. Even while we sit here, there are bankers around America in classrooms. And my mission to educate every child in an urban city before they get to the eighth grade in economic literacy.

Our partners are the FDIC and Money Smart, the Federal Reserve System, Department of Veteran Affairs, Citigroup, a national partner Wells Fargo online. You can go to bankingonourfuture.org. Check this out. They put up $1 million. You say oh, isn't that sweet. It is sweet, but they also got 2.8 million hits on that website this year alone. That's called a feeder, folks. It's called a feeder because it goes right into their website.

You can do well and do good, and do well by doing good. We include Banco Popular and Fleet Bank, and PNC Bank, and Citizens Bank, and Bank of the West, and others as our national partners. Working with Chairman Powell and others, we are now going on a marathon, two months, twelve cities to teach 20,000 kids with 1,000 volunteer banker teachers between October 21st and December 11th economic literacy. We will be here in your city December 11th. Meet us here. Come be a Hope Corps member. Come join the movement. You can do it. You can make a change.

As I close, I want you to do one thing be a little crazy. Here's to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes, the ones who see things differently. They're not fond of rules. They have no respect for the status quo. You can praise them, disagree with them, quote them, disbelieve them, glorify them, or vilify them. About the only thing you cannot do is to ignore them, because they change things. They invent, they imagine, they heal, they explore, they create, and they inspire. They push the human race forward.

Maybe they have to be crazy. How else can you stare at an empty canvas and see a work of art, or sit in silence and hear a song that's never been written, or gaze at a red planet and see a laboratory on wheels, or look at our depressed communities and see new markets. Because while some see these people as the crazy ones, other see genius. Because the people who are crazy enough to believe they can change the world are the ones who usually do.

Martin Luther King, Jr. was crazy. Jesus Christ, in some people's minds, was crazy. Nelson Mandela was actually out of his cotton picking mind. Goes to jail at 40 years old, stays there 27 years, come out, hugs the jailer, decides to become president of his country, becomes president of his country, turns around and makes his jailer his vice president, over mess and not in it.

We can make a difference. Each and every one of us can be a hero and shero. Watch how you live your life. It may be the only bible that anybody else reads. I'm going to leave you with one line. I want you to remember nothing but this Jesus is coming. Look busy.

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