White House Summit on Financial Capability and Empowerment: Best Practices Panel

Nancy Kopp: I'm Nancy Kopp.
I am the neighboring state treasurer.
My office is in Annapolis, Maryland,
the first capital of the United States before Congress
went to Philadelphia.
So we've been having a long time to learn.
I want to thank you all for inviting me to join,
because this is a very, very, exciting panel.
And the fact that we have gone beyond simply talking about
school classes, in financial literacy to understanding that
empowering the entire community and the individuals in the
community is a very important integral part of the program is
a step forward.
We have a panel, a first panel today of community leaders.
A second panel of business representatives.
And then a third presentation on education.
And as Gene Sperling said, it is all one,
it is all tied together.
It's all of the above.
And I hope that as we go through today we'll be able to see those
strings that run through everything and
tie everything together.
I will say only one thing about myself personally because we are
starting a little late and I want to hear from the folks
here, but my first experience in financial literacy was when
I was at the laboratory school at the University of Chicago,
about 60 years ago.
And I remember thinking as I worked at our bank in the 4th
grade, because there always was a bank in the elementary school,
and we were learning about bank accounts,
people wrote checks in those days,
I remember standing there and thinking how wonderful it was
that the kids from the second grade could start learning along
with the older kids.
So this is not a new issue, but never has it been I think as
critical as it is now, at least in the last 70 or
80 years in America.
I think you all know the members of the panel,
but let me just introduce them very briefly,
and maybe we'll go one by one and then maybe we could
have a minute to talk amongst ourselves.
Tanya Fiddler is a leader in the native community development
financial institution, and the executive director of the four
bands, she has actually taken concrete steps and initiated a
number of programs, including making waves,
which I've just spent some time reading about on the internet,
and it's absolutely fascinating to replace poverty and
unemployment with financial literacy and entrepreneurship.
And I was very pleased that Gene Sperling and John Rogers
all pointed out, we need both things.
We need literate individuals and communities with clear and
easily accessible information.
We also need a decent economy, fair wages,
and enforcement of the laws.
So this all works together.
And I think in either of the state level economy,
the city or the local economy.
It all has to be tied together.
So Tanya, tell us a little bit about your program, and then,
if you could, just tough on what lessons learned could maybe be
applied in a far broader community.
Tanya Fiddler: Okay. Thank you.
Well, we are a native community development financial
institution on the Cheyenne River Reservation and we started
this work, oh, sometime over a decade ago,
working to create a private sector,
build assets on the Cheyenne River Reservation.
Dewey and Ziebach counties are some of the highest
poverty counties.
And that isn't the end of the story, though.
We also have a lot of wonderful attributes and especially
traditional cultural and economies that we needed to
revive, Lakota people were strong in resource management,
planning, self sufficiency, and all of that.
And we wanted to bring that back.
It was very, very, important, we saw that opportunity with
the assets that we had.
So we needed to somehow revive people's understanding of that.
We have been working on financial literacy and
entrepreneurship with adults, since inception of our community
fund and realized that with 45% of our population under the age
of 18, about two or three years into our work that
we needed to target youth, and community partners and
our tribal governments.
So we created this making waves campaign.
We have a tool kit for teachers that integrates both concepts of
financial literacy and entrepreneurship into the
K through 12 school system understanding that school
systems are very stressed and teachers didn't need to be
teaching another class.
We looked at the core subject areas in addition to class,
arts classes, kind of what Mr. ordray's book, you know,
how do you put those principles back in?
So it took a comprehensive approach to doing that.
Meanwhile, enlisted the school system,
but the community partners, employers,
and currently our tribal government requiring for
its all tribal employees to be taking personal finance classes.
So it's, from all the way around the horn,
I do think you need to be doing everything.
Nancy Kopp: And do you have ways of measuring the progress
or the benefit?
Do you know when you're doing well?
Tanya Fiddler: We do.
I would give an example of 500 people completing personal
finance training, going further to take out credit building
loans that we offer as CDFI, improving their credit scores
within the first six months, by half of them improving credit
scores within the first six months, up to a year,
18 months out.
The majority of them improving credit scores.
And one of the phenomenon for our area was that 55% of the
people on Cheyenne River had no credit files which is a little
higher than the national average,
and those that had credit files were scoring 100% points lower
than the national average.
So we knew we had to be very, very,
aggressive as well and that's one of the better examples right
off the top of my head.
Nancy Kopp: I think that's a great example.
And one that I know across the country,
one major reason the people are not getting jobs is not
only that there are not enough jobs available,
but bad credit ratings have wrecked job applications;
and yet, I think until people really see it face-to-face,
we have not done a very good job of explaining
why it's important.
Tanya Fiddler: Credit identity is just another asset we need to
be building for ourselves.
Nancy Kopp: Let me ask Mary DuPont from Delaware.
You too have created a number of programs with both the public
and the private sector, and again people throughout their
lives and throughout the community.
Can you tell us a little about your model?
Mary DuPont: (low audio) I think it's on now.
Well, thank you for having me here today.
It's really an honor to be able to share our work.
I'm working with the State of Delaware and when our governor
was elected in 2008 --
Nancy Kopp: Former State treasurer, Jack Markell --
(laughter)
Mary DuPont: State treasurer definitely have big roles and add big
stake in this work as Jose will tell us.
He's not a state treasurer, but city treasurer.
And he led the charge in the State of Delaware around this
issue of financial literacy and financial capability.
And, when he was elected governor,
at the time I was in the nonprofit sector,
and there's so many amazing people here in this room who
have inspired the work that we're doing now in Delaware.
And among them is Cathie Mahon with the -- New York City
official of financial empowerment.
Because what we started to see is that there is a role for
government to play in bringing people to the table and in
promoting awareness and integrating the whole issue
of financial empowerment into all of what we do.
And it seems like everyone's been saying the same thing in
all the comments here, but through education,
in the workplace, in government, in government we are working
with so many people and we are affecting so many lives every
day, and, so Mike Bloomberg I think was kind of a champion
in this work and he definitely inspired Jack Markell who was
already there, and now we are working at the state level.
We started a partnership with United Way of Delaware and my
partner Michelle Taylor is here today.
And we formed a joint venture, a public private partnership and a
program called stand by me which offers one-on-one financial
coaching, access to consumer friendly financial services
and products.
Some of which we design and others which are offered by
credit unions and banks.
And we also work with students and families around accessing
post-secondary education, financial,
all the financial aspects of that financial planning, FAFSA,
managing student loan debt.
So, that's what we do.
So we take this package and what the methodology
is that we co-locate.
So we are working with supermarkets,
we are working with Walgreen's, we work with hotels,
and we are talking to hospitals.
And in terms of the employers, and I guess I am most proud
because my own department, the Department of Health and Social
Services which is the largest agency in state government is
hiring two coaches for our own workforce.
And we also work with --
Nancy Kopp: A role model.
Mary DuPont: Yes. I mean our secretary said wait a minute,
we are working with the supermarkets and
the drug stores.
We have so many employees who can benefit from this,
who need this help, so I'm really happy to see that we
are doing, walking the walk.
And then we are working with community colleges.
And we just formed a partnership with a school district that has
five high schools and four middle schools.
So we are putting together a plan to connect those dots,
working with students and families.
Nancy Kopp: It sounds clearly that one of the lessons is
linkage and not reinventing wheels because we don't have
time to do that.
Mary DuPont: I think one of the big things that I'm
recognizing after doing this work my whole life,
from the nonprofit side is that the empty seat at the table was
government, and I sort of knew that intuitively.
But now that we are here doing this work,
it's amazing how everybody that I just referred to is saying
yes, we need this.
So there's no arm twisting or you know,
sales pitch or anything.
Everyone wants -- I mean we are in a time now the moment
has come, I think.
Nancy Kopp: It seems to me, clearly all over the country people are
talking about financial literacy and making significant,
creating significant programs, but one of the things you're
absolutely right is how to bring everybody to the table
at the same time and build on each other through synergy as
opposed to just repeating.
Jose, you've done a lot in this, not only in San Francisco,
but with cities across the nation in many different areas.
Why don't you tell us what you've learned.
Jose: Sure. Thank you so much for having me here.
And as a city treasurer I do want to note I think I see a
little bit of a theme going on out there.
In fact, I'm not sure that everybody knows if everybody
knows that Director Cordray is a former county treasurer,
I believe, and state treasurer, so you know, I don't know.
Sounding like a pattern here.
I'm excited to be here today to talk about what you're doing in
San Francisco, but also about what a number of the cities
across the country are working on when it comes to what we call
financial empowerment.
We have a dozen cities already in our coalition of cities doing
this work, and I really want to build on I think what everybody
has said.
Local government is I think where we are seeing some of the
most innovative programs being created and being implemented.
And I think there's good reason for that.
Local government is our community groups and many
of our private companies right there at ground level.
We are right there with your communities.
We interact every day with the people in our cities.
We see the folks who are being taken advantage of, frankly,
and we see how folks could be benefited in their everyday life
if we could find a way to give them better tools,
better information, and better access to the products they want
to use.
Let me describe a couple of things that some of the
cities have done.
Probably one of the most widely implemented programs is a
program that we launched first in San Francisco to help get
people connected to bank accounts.
It was simply to reach out to folks who were unbanked who had
nowhere to go with their paychecks and anything else
that they received, but these check cashers where we know they
would get over charged if not even ripped off and offered even
more predatory opportunities.
We launched a program we call Bank on San Francisco now over
six years ago.
We partnered though with everybody already
in our communities.
We partnered with our banks and credit unions in the city.
We partnered with employers and nonprofit groups and community
groups to help us get the word out.
We partnered with literally everybody we could find.
And to your point a minute ago, I think one of the most
effective things the city government could do is it
could convene all those players.
Believe me, when the mayor of the city or better yet,
the city treasurer, calls all the financial institutions in
town and says I'd like you to come down and meet with us and
consider working on this problem with us,
financial institutions tend to show up.
And then frankly they did more than show up.
They participated.
They even changed some of their product offerings.
They did a lot of outreach.
They educated their own staff.
And what we saw in San Francisco was that each year those banks
and credit unions we worked with reported opening over
10,000 accounts each year for folks who had
previously been unbanked.
That's an exciting result for San Francisco.
But today, over 100 cities across the country now have
either launched their own bank program or are in the process
of doing that.
It wasn't an expensive program to launch.
It wasn't an incredibly difficult program to launch if
we got the partnership's right and it's clearly made a lot of
impact in our community.
Across our dozen cities and our coalition,
we are seeing a variety of different programs.
Again, reaching out at all age levels, many of them to youth.
Across all sorts of goals.
Both financial access, like getting people connected to bank
accounts as well as financial asset building, savings,
saving for the future.
Learning the power of savings.
Realizing goals and making the most of our money.
I think that's what was important.
And cities are in a unique place to be able to do that.
Nancy Kopp: I think one of the clearer lessons is the need to have
a site, have a convener, have a site,
and then have people share information.
Let me just say for Maryland, that we had a driver,
a person who was absolutely dedicated to this,
a former regulator, banking regulator in Maryland,
who decided about ten years or 15 now,
that she was going to pull everybody together.
And it really took that, and she reached out to
the private sector.
She actually went back to banking,
but reached out to the private sector to banking, to law firms,
to financial investors of course,
and to the schools and to the public agencies,
to the Social Security service agencies,
actually to everybody she could think of.
And then started convening meetings,
quarterly meetings that went on for a number, still go on,
went on for a number of years and the coalition builds up.
It however did take a significant push to break
through and then bring the schools in with the -- with
the private sector.
This was -- this was something rather new,
and I know the schools feel that so much is being demanded
of them that this is just one more, one more add on.
But it sounds to me like you all in fact have done that,
have brought in both the Social Security service providers,
the nonprofits, the schools, and the private sector.
Do you have any pointers to people throughout -- who are
trying to do that, to bridge that gap?
Tanya Fiddler: I would say once you provide teachers in the
system with viable tools, we invested in training in the
up front, this was part of sustainability and long-term
thinking for us.
So engaging with the school system in the beginning,
giving them a good tool and supporting them in the
implementation, today we don't go back to the schools.
There are five schools on our reservation.
We don't go back in every year and say now you have
to teach this.
You know, they run our making waves curriculum.
They use it for their summer school activities.
So it's about getting buy-in, you know,
on a community level on a personal individual change
level, and when you start so see the positive effect of kids
being encouraged or some of our kids starting businesses you
know, those types of things, the increase in savings accounts in
our communities and that type of thing,
we don't go back out and tell them.
But now, throughout our reservation and spreading to
other reservations that are partners within our networks,
more folks are doing that.
So I think providing the hand-holding up front, you know,
we talked about, it's not labor intensive cost,
intensive maybe in the beginning,
but once you get it and get the buy-in and every body agrees and
places those values and holds those values up,
especially in our communities, it takes off.
And we don't go back to it again.
You know, people are sold.
Part of it is getting the teacher's financial literate in
the system.
Jose: One thing I wanted to mention is in San Francisco,
we have a strong partnership with a new program we've
launched in, new partnership with the school district.
This is one to promote college savings for every
child in our city.
There's a recent study that shows if a child grows up
with a college savings account in the child's name,
you've heard of this, that child is many times more likely to go
to college compared to a child without a similar account.
We know, we know full well that many of our low-income families
were not for a long time, maybe never going to get around to
opening up a college savings account for their child.
And we know full well that in our public school system
the majority of our students are low-income,
are eligible for free and reduced priced lunch.
We wanted to bring that kind of success to our -- all of our
students in San Francisco.
So we partnered with the public school district in San Francisco
and we launched a program we call kindergarten to college.
It is a first of its kind.
We the city open automatically for every
child entering that public school at kindergarten,
we open up a college savings account.
Again, I want to say automatically,
no signature required by parents, no paperwork, nothing.
The child enters kindergarten and literally a few weeks later
an envelope arrives at the house,
welcome to your kindergarten to college account.
Here's your account card.
Here's your account ID number.
Here's how you make deposits.
And by the way the City has put the first deposit,
$50 into the account.
The account is now real and it's important and it's there
for every single child who enters the public schools.
(applause)
But we all know that $50 is never going to add up to enough
money to go to college, right.
I mean, obviously.
So we know the success of these accounts really relies on the
family's getting engaged and finding a way to save.
So we raised in addition to what the City was putting into the
investing in these accounts in terms of the initial deposit,
we raised private money.
With those private funds we offer two important cash
incentives to the families.
The first says we'll match dollar for dollar everything you
save in this account up to the first $100 to get you motivated
to start saving in this account.
And then secondly we say if you'll make an automatic
transferring to the account, say,
direct deposit from your paycheck or automatic transfer
from another account and keep it in place for at least six
months, another 100-dollar cash incentive goes into the account.
In less than 12 months we've seen a significant portion of
our families already start to save.
But what I think is even more exciting is that when we look
at those early savers, those first families to save,
the majority of them are free, reduced price lunch
eligible family.
They are the lowest income families in our city making
up the majority of the population,
of families engaging with this account.
Not only do we think that's important to build financial
assets for the kids, but we partnered with the school
district to say now that you know every kid in the classroom
has this account, we can work with you to build some financial
education curriculum into the everyday conversation
in those classrooms.
And they have been excited and committed to doing exactly that.
So we've developed grade level appropriate financial education
including kindergarten level that they are actually
implementing in the classroom.
So we are very excited to see where we can go
with this program.
Nancy Kopp: That is a great program.
And I chair the college savings program in Maryland,
so I know the statistics you're talking about.
And there is no doubt that one, when a kid and a family know
that they are saving for college,
they know that they are expected to perform and to go to college,
graduate from college.
And that consciousness of expectation,
propels -- and you can see it throughout their school career,
it also inspires the teachers by the way and the entire
educational community because they know something is expected
of them too.
So I think the lessons that I have heard thus far is that you
have to go one-on-one and community wide,
that you have to get people where they are and understand
what particular issue or challenge is facing them.
And we say as an older person, I hope you're reaching out to
those who are not prepared to retire at all,
but may not be able to continue working,
a whole new group of problems that we have not yet been
consciously addressed, I think.
And the strain of being in the community that is having
all of the members of the community pulling together,
whatever the community is.
Now one of the interesting things about talking about this
now as opposed to 20 years ago, I think you all have facebook
pages and websites; is that right?
So people can find out more information about your programs,
but also -- I'm interested still, Jose,
it's not a league of cities, but coalition,
because one of my questions is I know my city, Baltimore,
does not seem to be a member.
How do we get people to join together?
Jose: Well, we are excited to see more cities join our coalition.
And what we are doing is we are creating exciting models to do
exactly what you're talking about,
to provide financial education.
But even more importantly I believe financial access and
real opportunities to allowing people to get ahead.
It's great.
It's so on point that you brought up the internet and
online presence.
Actually our colleagues in New York,
champion an effort around financial education
opportunities, where they and a number of other cities,
ours included, have launched websites where we actually put
together all the resources around financial education
in our cities and make them available to our folks through
one unified resource, namely these websites.
We also do some interesting events throughout the year to
kind of publicize this new resource.
Again, following New York's great lead we did a phone-a-thon
last year to have people call in and ask financial advice,
give financial advice for free.
A number of our cities, if not almost all of them have worked
with our local chapter characters of certified
financial planners.
And we in San Francisco and many of the others have hosted what
we call financial planning days where during one day,
a Saturday during the year, anybody can come down,
sit down for free with a certified financial planner,
not a cheap thing to do most of the time and have a half hour to
talk about whatever they want to talk about financially.
We've had between three or four hundred people show up on any
given Saturday that we hold that event.
And that is something that we do intermittently throughout the
year to let people know that we have these resources available
in our community so they can go out,
reach out to them and make sure they are getting access.
Our coalition is called the cities
for financial empowerment.
I encourage people to read out and get in touch with us,
if there's this kind of work going on in our city we'd like
to know about it and we'd like to talk to you about joining our
coalition, because we see a lot of value in getting our cities
together, being able to trade best practices and support each
other and learn collectively how we can do more and more
in our communities.
Nancy Kopp: And I will say that the National Association of
State Treasurers, just to put in a plug, working with a broad,
broad, coalition also is setting up these pages and actually is
working with our fellow state treasurers in Mexico because
many of us have Spanish sites, Spanish language sites,
and they are actually just taking -- the relevant
information from the Spanish language sites and putting it
on their own sites.
The question of the coalition is growing and growing,
and I think this event and John Rogers and your work and your
colleagues to be a point for gathering information and
bringing people together and being able to help people who
want to link hands but don't know how to reach across and
join together.
It's a wonderful opportunity.
We have about four minutes I think for questions if anyone
out there has a question of these folks,
including maybe just repeating what their websites are.
Speaker: (inaudible)
Nancy Kopp: If any of you have any questions for each other
this is a great opportunity.
Mary DuPont: I would just say as I said before,
there is a lot of great work that's going on in the country,
and you don't have to figure it out.
I think that you know by going to cities for
financial empowerment.
People are invited to visit our website,
standbymede.org and just, you know, talking to people,
I think I can really get a lot of ideas,
and a lot of inspiration.
And, I think that you know the inclusiveness that I'm seeing
now, with everybody coming together,
this is going to be the way we are really going to be able to
have that impact.
And we are just a year old, but you know,
we've already served over a thousand people in Delaware
through our partnerships that I talked about,
and I think that you know we need to really weave these
concepts into the fabric of what we all do every day.
So I guess that --
Nancy Kopp: And just one step more broadly, I think it is fair to point
out that an enlightened and empowered consumer makes for
a better market.
And maybe what we need is not just government and looking at
whether regulations are being observed or laws are being
followed, but the consumers to know what they are entitled to
expect and then to demand.
(inaudible)
Marianne Campbell: I'm Marianne Campbell from the family consumer science
Department of the University of Central Arkansas.
And I'm very impressed, Jose, with what you're doing with
the kindergarten to college, that's just so exciting.
I have a question about it because we've done some things
where we've put money into accounts, and so forth.
How do you keep people from pulling it back out?
What is your ratio?
What is going on there?
Jose: Excellent question.
That was of course a concern for us to make sure that this money
would be used for its intended purpose, right,
that kids would be able to have, be assured the money is there to
go to college.
The way we've structured this work,
and I have to acknowledge the great partner we have city,
Citibank who is our account holder in this program,
is we actually open up what is called a custodial account in
the name of the City and County of San Francisco.
And all of the children's kindergarten to college accounts
are technically subaccounts to the custodial account.
What results with that is then once the money goes in it cannot
be withdrawn without the approval of the City being
the custodial account holder.
So our message very clearly to all of the families is this is
strictly a one-way account until your child goes to college.
The monies go in, they stay there.
We'll provide matches.
We'll provide opportunities.
We are going to provide financial education.
But that money is intended to stay there until your child
needs it to go to college and it is absolutely safe.
Nancy Kopp: Very good and pointed question.
And with that I want to thank you all very much.
It's been a wonderful education for me.
I feel much more literate now than I was.
And Raquel, back over to you.
(applause)