April 7, 2003
·
As the President and CEO
of the Statewide Hispanic Chamber of Commerce of New Jersey, I am honored to be
part of this First Annual Financial Literacy Summit and to sit with such a
distinguished panel. This is indeed a
historic initiative that will have positive ripple effects for many, many years
to come.
·
On behalf of the
Statewide Hispanic Chamber of Commerce of New Jersey, I want to thank Sen. Jon
Corzine for sponsoring this event and I also want to thank him for his
continued support of issues impacting our Latino community.
·
I am particularly
excited about today’s program because financial literacy is a key component of
the Statewide Hispanic Chamber of Commerce’s economic development strategy and
I am pleased to share our ideas, our dreams and our vision with all of you
today.
·
As we know, literacy
efforts – the ones tied to reading books – abound. These are indeed worthy efforts and my organization heartily
supports them. Latinos and others learn
about the importance of reading books to their children and children learn the
power of the written word.
·
But today’s summit is so
exciting because all of us here – each and every one of us – understands that
financial literacy – an unknown term and concept for so many Latinos –
translates into power. The power to
open the doors of economic opportunity.
·
Why is financial
literacy so key to the success of Latinos?
Simply put, it provides the tools taken for granted by millions of other
Americans: Cashing a paycheck, opening up a checking account, buying a car,
purchasing a home and saving for their future.
·
Here are some numbers
that are startling and that help to illustrate the challenges facing those of
us at this summit to address financial literacy. The Hispanic’s buying power is estimated at $580 billion in 2002
and a projected $940 million in disposable income in 2007.
·
And yet Ladies and
Gentlemen, more than a third of Latinos recently surveyed reported they did not
have a bank account. That number rises
for Latinos born in foreign countries to 42 percent. For immigrants with incomes below $20,000, 62 percent did not
have bank accounts.
· The other day,
a friend’s sister found a wallet on a Paterson street. Inside, there were immigration papers for a
South American gentleman – and $1500 in cash.
How many of us in this room carry that amount of cash? If you’re like me, you carry a few dollars
to perhaps buy a newspaper and a coffee and most of us carry an ATM card so we
can quickly access our money in our accounts.
· Luckily, in
this instance, the woman who found the wallet was honest. She located the owner of the wallet and
returned it to him along with the cash.
But how many other Latinos are doing the same as this gentleman?
· Go drive
through any urban neighborhood and what do you see? Businesses that cater to those who don’t have banking
accounts. Payday lenders and
check-cashing outlets – the latter being an industry that has doubled over the
last decade. Incredibly, four out of
five persons without banking accounts use these check cashing places.
· So, yes, it
sounds impressive that Latinos have this immense buying power and yet – isn’t
it almost ironic? - Many don’t possess a simple tool such as a checking account
to pay their rent or phone bill, much less all the other products available in
the financial services market.
· Here’s another
startling fact. In 1998, the financial
net worth of the median Hispanic family was ZERO. Yes ZERO. Compare that to
$37,000 for similar non-Latino white families.
· Unfortunately,
given all that we know, that really comes as no surprise for a community that
has limited access to formal savings tools.
· In New Jersey, our Latino population is forty
percent Puerto Rican but in recent years immigrants and their descendants from
Mexico and the Dominican Republic are replacing Cubans as the second largest
Hispanic group. We also experiencing
growing numbers from Colombia, Peru, Ecuador, El Salvador and other countries
from Central and South America.
· These new
arrivals are often unaccustomed to tools and practices such as checking and
savings accounts and mortgages even though we know that a relationship to a
mainstream financial institution benefits the workers, the families, and their
communities.
· For example, in
many Latin American countries, a checking account is viewed as something only
used by those who are financially well off.
So if you’re poor, a checking account is not a reality. Indeed, it isn’t often even a dream.
· Additionally,
in such countries, business is conducted on a very personal basis. You know who you’re dealing with. You have a personal relationship with those
you conduct business with to the point that you deliver a check – NOT mail it.
· Then they come
to this country and encounter mainstream financial institutions that are not
sensitive to their needs or cultural background. Perhaps, if they’re lucky, there’s a bilingual teller at their
local bank who may take a minute to assist them with a simple transaction. But, in reality, some banks employees have
no interest in assisting persons with no established credit history who they
may perceive as a flight risk.
· Financial
literacy affects another area of our lives: housing. In 2002, national homeownership was 68 percent – a historical
high rate. Hispanic homeownership was
at only 48 percent. There are many,
many factors that contribute to this dismal number: Language; lack of access to
financial institutions; lack of income and down payment and so on.
· That’s why so
many fall prey to predatory lending and I want to take this opportunity to
applaud Governor McGreevey, legislators and organizations such as the AARP and
Citizens in Action for their efforts to take on those who prey on those who can
least afford to lose one dime to unscrupulous practices.
· We at the
Statewide Hispanic Chamber of Commerce view homeownership as a key to - and as
a measure of - our fellow Latinos economic track record. And we view it as a key component in our
organization’s financial literacy plans.
· Financial
literacy is also key to ensuring that Latinos have the means to retire and live
comfortably. What we’re finding is that
many elderly members of our communities can’t afford to continue to live in the
United States after they stop collecting paychecks. It’s a very sad thing to see.
· Many of them
came to this country years ago, leaving behind their families in pursuit of a
better life. And years later, after
raising families and planting roots in New Jersey and elsewhere, they are
forced once again to abandon all that is familiar to go back to their native
countries. And why?
· Because here
they did not have the knowledge – the tools – to make plans for their later
years. No 401Ks. No IRAs. They are forced to depend on Social
Security and – if they’re lucky – a small pension. If they remain here, they struggle to survive. But – back in Bolivia, or Nicaragua, or Dominican
Republic – they can live comfortably with just a small pension.
·
I believe – and I know -
Latinos have the hunger to learn about the tools that will help them achieve
the American Dream – or perhaps that will simply allow them to sleep peacefully
through the night without having nightmares about poverty.
·
The Hispanic population
in the United States is young; about two-thirds are 25 or younger. They have a long future ahead of them and I
believe it is our responsibility to ensure they become financially literate.
·
But here’s another
reason we need to get out there and do what we can. You know as well as I do that we learn from our parents. Each generation passes on to the next the
tools of Life. Now is the time to
strike and teach our children and their parents and their grandparents that
economic security is not only within their reach – but also their absolute
right to obtain and grab onto with all their might.
·
Senator Corzine, I
applaud you for all your work to raise public awareness about the need for
increased financial literacy in our schools.
Your work will have positive repercussions for generations to come and
for that the Statewide Hispanic Chamber of Commerce thanks you.
·
Of course, financial
literacy is not the magic answer that will address the economic gap between
Hispanic and non-Hispanic persons.
·
Hispanics earn only 64
cents for every dollar earned by other Americans. And, census results released last month show that, on average, a
white man with a bachelor’s degree earned about $65,000 in 2001. Similarly educated white women made about 40
percent less, and Latino and African-American men earned 30 percent less.
·
But financial literacy
is a necessary piece of any anti-poverty and asset-building strategy.
·
As I said earlier, financial literacy is a
main component of our agenda for the Statewide Hispanic Chamber of
Commerce. We are in a unique position
to play a large role in this regard for a number of reasons.
·
We have been advocates
for economic development for our Latino communities. We just held our 12th Annual Convention and Expo, last
October, which celebrated the theme “Enduring Prosperity.” Hundreds attended our workshops and panels
on business development, marketing federal home programs, homeownership and
more.
·
My organization also has
a longstanding relationship with financial institutions, which play such an
important role in what we are discussing here today. We have an ongoing dialogue with many of them about why they
need to be leaders in supplying financial services to the Hispanic community.
·
The Chamber also has an
unparalleled network to institute federal literacy initiatives. We already have partnerships with other
advocacy groups – including many who are represented here today – and we have
working relationships with government agencies at all levels.
·
And, of course, we have
direct and personal knowledge about the most important piece of the equation:
The Latino communities in New Jersey.
·
The Chamber plans to
seek financial support from the public and private sectors to institute
programs, activities and other efforts to make financial literacy a reality not
just for Latinos, but for all who have a need.
·
Not only will we
continue our dialogue with the presidents and CEOs of major financial
institutions, we also want to send representatives to speak at schools and to
community groups.
·
Beyond my organization,
one area that we all need to take a good close look at is the use of the
Internet to reach Hispanics. I just
read a January 2003 study that showed there were 12.4 million Hispanic users in
the United States that accessed the Internet from either their homes, work or
at a university. Clearly, we can reach
Latinos through this avenue, especially the younger Hispanics. The study showed the Hispanic online
population is 34 years of age or younger.
·
The Statewide Hispanic Chamber of Commerce is
committed to working with each and every one of you on financial literacy,
which is certainly one of the most important efforts in this new century.
·
We offer our assistance,
our knowledge, our resources and our support.
·
And, once again, I want
to thank Senator Corzine and his staff for this tremendous event. We already look forward to next year’s
Financial Literacy Initiative Summit where we will share stories about our
efforts and our successes.
· Thank you.