At a news conference in Chicago, FDIC Chairman Don Powell launched the Spanish language version of Money Smart, the agency's popular adult financial literacy curriculum. "Financial education-particularly of those who are outside the financial mainstream-is one of the most important things which we, as Americans, can be engaged in today," Chairman Powell said, noting that 10 to 13% of U.S. households, primarily low- to moderate-income, minorities, and recent immigrants, do not have bank accounts. Unbanked Americans use "fringe banks" at excessive costs. And they are more likely to be the victims of predatory lenders.
Sixty percent of Latino immigrants are currently unbanked, Powell said. More than $18 billion is wired annually to Latin America, $9.5 billion to Mexico alone. Many immigrants pay high fees to wire transfer companies and check-cashing operators. Latinos' disposable income is projected to be $600 billion this year. Banks that accept Individual Taxpayer Identification Numbers issued by the IRS, or the Matricula consular card issued by Mexican consulates when opening new accounts have been able to tap into this market, Powell noted. Five California banks took in $50 million in deposits, and one California bank opened 25,000 accounts in seven months. "Figures like that spell out 'good business' to me as a former banker and 'good policy' to me as a regulator," Powell said.
The FDIC has set a goal of establishing partnerships with 1,000 organizations and institutions in all 50 states to distribute 100,000 copies of Money Smart and expose one million consumers to the financial education program over the next five years. Korean and Chinese language versions will be available in 2003. To date more than 9,000 copies of the program have been distributed, and the FDIC has announced additional partnerships with HUD, SBA, United Way of Greater Los Angeles, Texas A&M University, and the South Carolina Dept. of Education. FDIC had previously announced partnerships with the Dept. of Labor, the Neighborhood Reinvestment Corporation, the Mississippi Housing Initiative, and the IRS's Voluntary Income Tax Assistance (VITA) centers, among others.
"Financial education can be the building block to establishing banking relationships, opening a checking account, managing and saving money, owning a home, building wealth, and increasing assets," Powell said.
Bankers can obtain copies of the Money Smart program from the FDIC. The materials are easily reproduced, have no copyright restrictions and are free to the user. For more information, visit www.fdic.gov/consumers/consumer/moneysmart/index.html.