as i went to the process of listening to the millions of comments, the forms we had, the private conversations, i increasingly came to see the story of harry tubman -- harriet tubman being a similar story and also being the american story at another level. a story of independence, current as one person in a system that made it almost impossible to achieve. a reminder that each of us has a part to play. it contains the system. it is something i will always be and lookbe part of forward to finding the -- >> this has been a pleasure to have this conversation and the

talk to youu -- about financial inclusion and moving financial education forward. >> fetches a much. [applause] -- thank you so much. [applause] >> thank you again, mr. secretary. this is been terrific. it is my pleasure to move us forward and to introduce roger ferguson junior. his illustrious career and a competence -- accomplishments speak for himself. federal reserve system employee. he served on the president's economic recovery advisory board and council on jobs and repetitiveness. -- competitiveness. ceo of piab. allows them to have unique authority on issues of wealth

building and had to provide financial services. his contribution to our country and the private sector have been recognized many times. he's recognized more time. [applause] -- one more time. [applause] >> thank you for that kind introduction and good morning, everyone. the sun is to be here. i commend the secretary and the department for hosting this forum. and for paying tribute to friedman's bank. all of you know that friedman's bank was founded to create opportunities for african-americans to build financial security. color communities of continue to face the range of challenges that hinder their ability to achieve this important goal. my organization has been focused on helping people prepare for

secure retirements for nearly a century. believe strongly that it is achievable for all americans. we also know it can be harder than ever to reach into demographics, economic and other trends that are reshaping our world. in my brief remarks come i want to outline some of the challenges all americans face in achieving a secure retirement and highlight some of the unique challenges and difficult experiences. i will discuss why financial literacy is so important. weally, i will share what have learned about the best way to get to and through a secure tyrant. -- retirement. landscape. the challenges we face here and financial security generally are driven by three factors. talked about, or lack of

adequate savings by all individuals. i will talk about that separately. secondly, the decline in traditional insurance plans of the private sector. and already touched on, the aging of the american population. the u.s. alone, the federal reserve has estimated that one third of american workers have literally nothing at all save for retirement. that is concerning. the average life expectancy has hit an all-time tie -- hig meaning many americans will spend longer in retirement than previous generations. theifespans have risen, earth rate has fallen. together, these two trends have produced a steadily aging population. it is predicted that the elderly will make up nearly 22% of the population by 2040. the resulting strains are already well-documented.

statistic, in 1950, they were seeking .5 workers for each retiree, there are only 2.8 workers. shoretel three. -- short of three. the ratio is forecasted to drop 2-1. the second challenge is that individuals bear much more individual responsibility for ensuring their financial security. were able to rely on company pensions, but since 1980, the share of private sector workers drawn solely on company pensions for retirement has fallen from 62% down to 17%. what is happening is that the 401k and defined contribution plans nominate in the private sector with more than two thirds of workers relying on them.

able evident that the current retirement model is not getting the job done in terms of preparing workers. distance six -- statistics. over 67 million americans lack access to a retirement plan at work and those who do, many choose not to participate and even when employees to participate, they and their employers often don't contribute enough to their investment accounts. ze of thete on the si balance without considering income flow. other thing that we will touch on is that many feel to preserve their assets for retirement, rather they borrow. you heard the secretary much his story about how he was sure not to touch his ira.

that the overall landscape. given the topic of the day, let's focus on communities of color. challenges number of of community of color. one is that the unemployment rate for black americans is nearly double that of whites. the median income of african american households is behind white house holds by nearly $24,000. the wealth gap. to give some statistics.

no assets in a retirement account. among those who do have retirement accounts, the amount saved is far lower among households of color and white house holds. the working age population, three out of four black fiveholds and four out of latino households have less than $10,000 in retirement savings. you can understand what the secretary put such weight on saving early. among households, one out of to have savings.

thatrchers also showed african-american workers are less likely to invest in stocks. a situation that may limit the long-term growth potential for their account since stocks have historically been the highest yielding investments over the long-term. there is volatility. people ofow that color are more likely to take him on from their 401(k) account and more than twice as likely to take a hardship withdrawal. hispanics also borrow their account from harwich. it is both black and hispanic. all of these factors lead african-americans and hispanic workers less. a financially>> secure future. another area of challenges financial literacy. you are you artie heard that touched on. far too many americans lack financial knowledge that they

need to make a saving decisions that will get them safely through retirement. we know that financial knowledge makes a huge difference. with a high degree of financial literacy have a number of things in common. more likely to plan for retirement. in turn, any for retirement is a powerful predictor of what the chelation. a positive reinforcing cycle. there,e statistics people plan for retirement have more than doubled the wealth of people who do not plan. conversely, people with a lower degree of financial literacy tend to borrow more interestingly less wealth and select investments with higher peers. a downward spiral. folks with a lower degree of financial literacy are less likely to invest in stocks and more likely to experience difficulty with debt and less

likely to know the terms of their mortgages and other loans. national jubilee study has shown that financial literacy rates among americans are low with the but those lowest rates are african-americans and hispanics. the study showed that financial literacy is -- has declined slightly which is disturbing with americans having increasing responsibility to it secure their financial security. dour and sobering assessment of where we are today. about what we can do to make this a better story. possiblee that it is to prepare people at all income levels to achieve financial secure retirement. why do we believe that?

in thisiction is rigid simple fact. we have been helping people of all incomes get to seek and secure retirement 1918. that is when we were founded. that was 17 years before social security. today, we provide retirement plans they range -- and a range of other services for people in the nonprofit sector across all asset classes and incomes. we estimate that on average, which is a pence are on track to replace more than 90% of their income average -- at retirement. that figure covers a range of incomes. all races, income level, professor to doctors, to gardeners, custodians and ground folks on campus. what are some of the elements that work? there are number of them. first, employee participation is

mandatory. you must get everybody participating. you heard the secretary talk about automatic enrollment. employers and and -- and employees contribute to savings. joint effort. employees have access to an appropriate mix of diversified investment options. reflecting diversification being important. employees typically have access to a source of lifetime income. this is important. the defined benefit plan or an annuity that provides a level of guaranteed income. the risk of longevity is spread to the insurance company. finally, they provide access to a robust program. this is important. education and advice to support clients in this complicated set of financial decisions. this advice is available to

everybody. the matter how much or how little they make. we think that this approach offers a strong model for the nation as a consider how to strengthen our retirement system in the 21st century. as weespecially relevant consider the key challenges of the day which is lifetime income. you must assure that as americans live longer, they can retire with a piece of mind that comes from not worried about running out of money. you've heard a comment the black enterprise leader. i continue to believe that education is the key. the u.s.trengthen educational system so that communities of color have the same economic opportunities as their peers. the on that, we must strengthen financial education and enhance financial literacy among committees of color. we must ensure that they understand how to manage their

financial lives in a way that prepares them for mitchell -- financial secure retirement. we must broaden access to retirement plans across the community. we believe that everyone should have an opportunity to save for retirement at their workplace. these issues have a profound impact for economic progress as a nation and for the long-term well-being of all americans. we have a long way to go. we believe that we can overcome the challenges we face. we must make retirement and national priority. we have been heartened to see -- administration take number of members measures to enhance financial security. a rule which we think is important that will make putting customers first including the ira role decision. we think that is an important industry standard.

we support the department of labor role. -- rule. the state-based retirement plans are another good step forward. they will get many americans an opportunity to save for retirement. you artie heard the secretary talk about the myra -- already heard the secretary talk about the myra program. the importance of taking advantage of compound interest. are important initiatives. we applaud the government for doing that and recognize that both the government and business and not-for-profit sector have a .ole to play a couple things we have done, we are partnering with the council graduate schools on initiatives to boost financial literacy among college students of all colors and ethnicities. givene launched --

historically black colleges and universities, talking to many of those leaders and starting the process. advisinged hispanic counsel to guide us in serving spanish-speaking participants. we offer counseling and education in spanish as well. letpite of the challenges, me close by saying we are challengeson the that i've outlined today. if we work together, we can make fearement a time not to that of financial security as it should be for communities of color as we can for all americans. let me close by thanking you for giving me this opportunity to speak. i hope you enjoy the rest of the form. -- for him. thank you very much -- forum. thank you very much. [applause] >> thank you again. it is my great pleasure to

introduce our first panelist. let me bring them up to the stage. our panel will be moderated by deputy secretary raskin. he has been a leader in our effort here and efforts of the federal reserve board and the state of maryland. we are pleased to have her engaged on this topic. soon be joined by professor rocksteady of stanford. blackan of the board, 100 men of america and john rogers junior. please join me in welcoming them to the stage. [applause] >> good morning. thank you for introducing this panel. today joiningfor

us for this forum for what promises to be an enlightening discussion by the spinal. we will be talking about building jobs and opportunities for communities of color. we know that the challenge of building jobs and opportunity for communities of color is related to the challenge of access to our financial system that is designed to foster inclusion. hence, the name of today's form. the freedmen's bank form. think about it, more than 150 years ago, the friedmans savings and trust company was founded at the direction of president lincoln next door to where we are gathered today. ofs company was born out recognition of the need for

financial infrastructure that was inclusive of our newly emancipated people. place where the poorest and most disappointed individuals -- disadvantaged individuals can access basic financial services. it was a door and served as a door into the formal economy and a pathway for people who had none. startowed people to getting credit, to start businesses and get opportunities to say. it was an early institutional response to the challenge of creating opportunity for the newly emancipated american. more than a century and a half later, i think it is fair to say that our nation has made enormous progress. the critical importance of

financial inclusion the building jobs and opportunity for communities of color has not changed. how we foster such financial inclusion so that it unlocks opportunity to participate in economic gains is what we are going to discuss on this panel. experiencedhas large improvements if we look at the macro in the comic -- economic indicators. nine years ago, the worst financial crisis since the great depression plunged our economy into a recession. we know that when president obama first took office, the economy was losing more than 700,000 jobs every month. since then, the administration progresstremendous rebuilding our economy. if you look at the macro indicators, the unemployment rate stands at 4.9%. u.s. businesses have added 15.1

million jobs since early 2010. showingensus data is income growth between 2014 and 2015 as being the fastest on record. this is good news. what is encouraging is that household at the bottom of the income distribution are finally seeing some of the largest growth. specifically the bottom 10% of households saw their incomes increased nearly 8% over the past year. despite these gains, we know that there is a danger in focusing only on these macro indicators. they can often obscure whether underlying data points and trends that we know are important to understand and important to address for sustained economic growth. backyou pull the curtain over the aggregate macro data,

you see what is at stake. of2013, the median net worth white households by some surveys was $144,200. 13 times higher than the median net worth for black households. which was only 11,200. as we dig into the data, we see other things. for communities of color, many gains on the macro level are not being told. americans report that they could probably course of 20 not come up with $2000 in the next month for an unexpected expense. 34%. among african-americans, if you look just at african americans, it is higher. 48%. consumers which

represent 50% of african-american our credit and physical me they have no records et al. at the major credit bureau. they are unlikely to be able to access credit on good terms and more likely to have to turn to high cost wealth stripping lenders in an emergency or for day-to-day expenses like fixing a car to get to work. we know financial emergencies are often unpredictable and unavoidable. a market that have the income or financial access, they have to be forced into higher cost on x and making these impossible decisions like choosing between food and paying for rent. immediateling with expenses, when consumers don't have the income or financial access they need, they are put significantt --

disadvantage if they want is start a business or buy a home. if they want to do anything to begin creating a cushion for long-term financial security. in other words, the very lubricants of opportunity began to evaporate. these barriers to an inclusive financial system are consequential for individuals and ultimately consequential for being able to be on a path to an economic growth that is sustained and not sporadic. usay, we have joined with three esteemed panelists who are going to help us address some of these questions. they're going to help us explore what factors within our economic and financial systems can help and a moreortunity inclusive economic growth. the panelists are going to help

us understand these questions and think about what else we can be doing to build jobs and opportunities for communities of color. thet, we're joined by professor of economics at stanford who combines comparative evidence in economic theory to design more effective policy. policy toenough for a sound good at meetings or forums like this, we need to be designing and implement an evidence-based solutions. -- he brings a suspected -- prospective to identify dissociative we will also hear from the chairman of the 100 black men of america to talk about his role in transforming the lives of youth and improving communities through their mentorship. he has boots on the ground

experience and his expertise is relevant as we focus on policies that affect people at the individual level communities of color. design a more successful financial infrastructure, we turn to curly for answers. aswill hear about his role president of the georgia pacific foundation and better understand how philanthropic investment can help build meaningful communities. in finally, john rogers. we'll hear his perspective as the chairman, ceo and chief investment officer of aerial investment. and his experience working in the south side of chicago. as you will help us better understand the role of the private sector as well as the critical role that education place in broad-based prosperity. he has been a great advisor to

us at treasury, particularly in his role on the president's advisory council. we are pleased to have you back here. turning to our questions, i will start with rahj, we're going to talk about some of the factors that foster economic mobility. economists model, they often 12 on labor, capital, natural resource endowment. there areso show that institutional factors at stake. things like accessible and affordable education, accessible and affordable say financial services. these are all critical as well as factors such as a fair legal system or appropriate regulation, sufficient government investment, vibrant private sector.

i want to start by asking you what factors you look at? what do you see that helps explain whether the engine for economic mobility are producing opportunity for all and what can we be doing to increase the mechanisms for social mobility, particularly for communities of color? >> the me say it is a pleasure to be a part of this event. let me start by describing data that we use to analyze this topic that comes from the treasury. we tracked the lives of about 10 million kids looking at where they grew up and how that affects their economic opportunity and when we look at that data set, what we find is that there is tremendous variation in economic opportunity across the communities. there are some parts of america that can be described as land of

opportunity consistent with the traditional american ideals of kids being able to move up in if they werebution part. there are many other committees in america that are better described as places a persistent poverty where did you grow up in a low-income family, you don't have very good chances of climbing the income ladder. some examples, parts of the west coast like the bay area or salt lake city offers americans tremendous opportunities for succeeding relative to places like atlanta, georgia or milwaukee, wisconsin or indianapolis. there are three or fourfold differences of your chance of the climbing the ladder. question, what are the systematic differences between places like the bay area or salt lake city in places like atlanta or charlotte?

we have looked at a brightly of factors and i will describe some of the most strong patterns. we find that cities that are more segregated by race or income from residential segregation, those types of cities have much lower rates of economic opportunity then more integrated communities. it incredibly segregated aires. cities that look like that in terms of residential structure tend to have much lower economic opportunity. second, we find that places with more social capital, places where some else is likely to help you out even if you are not doing well, salt lake city with the mormon church is a classic example of a city with a lot of social capital. those types of areas tend to have high levels of upward mobility. capitaladitional labor kind of factor but other types of factors that seem to affect

economic assets. the third is the quality of public schools. places with better public schools seem to have dramatically better incomes. let me relate this to our topic today thinking about opportunities for communities of color. what we find is that areas with inger african women -- american publishers have less economic opportunity. the examples given like atlanta or charlotte with large african american population, the city's tended to score worse on all of the factors that i have been describing. they have more segregation and weaker public schools and this amplifies racial gaps. we estimate that something like a quarter of the gaps in income between blacks and whites or gaps in wealth we have been talking about are due simply to the difference in the

communities where blacks grow up and wear white girl. if we were able to get after americans the same opportunities in terms of what we see in places like sully city and san francisco or if we were to move a child from a community that looks more segregated to a community that is more integrated, we will ultimately wipe out roughly a quarter of the black-white income gap. i do think we need to be thinking about the roots of these problems as going back to childhood and not just picking about differences in the labor market. think about factors like segregation, education, social capital. >> thank you. let's go down the education piece. john, i would like to hear from you. knownk one thing that we as a precondition for growth is having a perspective that is long-term.

let me focus on education, we think of something that is going to be an investment where there are some costs in terms of investing in the education of a child and moving them to the educational system. i know that you have an important perspective here. the role that educational institutions can play in cultivating a long-term perspective. what i think we would like to know is, what institutions you think are important to having at the committee level to foster financial inclusion and how is the private sector engaged at the committee level to foster a long-term perspective -- community level to foster a long-term perspective? >> i will try to blend two

things. about the things i talked for young americans was the having financial institutions and local businesses partner with urban public schools and get that professional expertise involved. that is what we have done with our community academy that is 20 years old. we started with arne duncan and we worked with young people who can get to our offices and learn to take stock and use real money . then he been exposed to the financial services career path. it was important. they are learning about how to save and invest and at the same models for's role them. they can go home and talk to their parents and aunts and uncles about how to save and the importance of this economically

viable career they had not thought of. it is important. they will be more likely to become entrepreneurs and start businesses that will last because they had this long-term financial curriculum they have been exposed to. education is a part of the solution and we need to get our financial summit solutions -- institutions into public schools. the second example is not far from the economy, the university of chicago. one of the things i talked about there is that the income institution in chicago where i've been a trustee for the last 17 years, they have been working with local minority owned businesses in a meaningful way and a particularly with professional services. over the last 8-9 years, they have gone from zero to have an relationship with 60 professional services. caterers,lk to local

local photographers, small businesses and they are able to survive the financial crisis because the university of chicago. you can talk to the head of the african-american registration where they made payroll because the chicago hospital was advertising. we need our income institutions to work with local minority businesses because the local minority businesses will hire local people of color. the people who have a chance. the university of shock cargo -- chicago has done that externally well. -- externally well. extraordinarily well. >> from your experience, what have you seen that makes the biggest impact on helping create economic opportunity for people in these communities? >> before answer that question,

let me crazy topic that plays a role --. -- players-- raise a topic that plays a role. we gathered honest conversation about race and history of that. the progress that we have made, but we also have not talked the way wealth was destroyed in communities. that is created and when you talk about cities like atlanta and others, it is not just the segregation, it is the poverty that goes along with it. that isirement necessary to impact those poverty neighborhoods requires a great deal of of the resources. we have to have those conversations to understand that it is more than just segregation . it is how we deal with the issues of poverty. least 80%obably at

80%-90% on free and reduced lunch. that has an impact on their ability to learn and be motivated to learn. and other competing issues. to what communities that majorhave seen sectors need to come together and focus on key issues and do that over a sustained time and make sure equity is an adequate part of the discussion. if you bring public-private partnerships, basing to be effective and impactful. when you look at the sectors, whether corporate or private, government sector engages well with that. and institutions as well. they sustain themselves for a long time. intersectionthis

between these various sectors can really create opportunity for people in those communities. we have seen that happen. now tiedam and atlanta to the new falcons stadiums. it is bringing together a lot of the sectors together. trying to make a transformational impact. we can invest in over $1 billion in building a new stadium tickets are 22 a lot more to help the community adjacent to that. -- and we can do a lot more to help the community adjacent to that. let me drill down a little bit more on her that, one of the points that you make is that we actually have to drill down, we

start when people are young and that we figure out how to engage them at an early stage to bring workforce and the into an adult economy. we have seen this and john has highlighted a lot of the work on the president's advisory council. how we foster financial inclusion from a young age, that is something we believe is a challenge that still has a lot of work to be focused on. consequences argued because young people are making decisions about higher education and making decisions at an early age about how they're going to plan for their retirement. any parent in the room struggles with this idea of how to

actually engage children and young point and what that right point of time and how best to do it in a way that starts to of financialabits inclusion. >> two examples that john mentioned. we have a program with entrepreneurs. it is an initiative that we target ninth and 10th graders. it is a for your business elective course that we fund in addition with the public school system. they confirmed back the curriculum matches. that, weram allows for bring each student working on the economic way of thinking and learning the understanding of financial literacy and also how to become an entrepreneur and the potential to become a entrepreneur.

we teach them all those fundamentals. whether they choose to go into a business or whether they go to work for one, they go with the mindset of thinking like that and they can take on a job or position it can like an owner as opposed to just going in as an employee. ,ne of the things we try to do one element of the program is we have market day. midway through the curriculum, we will give the kid's five dollars each and they get to use those resources and got to the market and determine where the sellct service is to through the school and they find oute funds and what they will need to do to make a profit. what do they learn in the process if they don't make a profit and we seek kids being very entrepreneur.

they see how to make midmarket of -- adjustments. at the end of the process, they have to pay back the money and they get to keep whatever the profit is. we found that the students really resonate to that and it to all students be oftentimes we see that the marginal students are more likely to drop out and they also take the altra newer skill sets and apply them in appropriate ways. sets andreneur skill apply them in appropriate ways. hopefully enticing them in the process they will remain in school and have the drive to graduate which is another issue we have with high dropout rates. mentoring our program, one of our place we have the dollars intense competition.

-- they have to do and they have to tell the person what the recommendation they have and give them a product from -- they may have to determine the money needed to buy the car and pay for the education and they have to bring investment recommendations. these competitions take place around the country and they culminate in a national conference with the top 20 teams competing. they can get money for scholarships and money to invest. that is something we have been doing. making sure they start to get the early part of the financial literacy. that is part of the economic development that we use.

a big part of this is providing exposure for kids. a lot of these kids have not had the opportunity to really understand these things. when we given that exposure, we are releasing how they resonate. part apartment and program says that what they see is what they will be. oftry to provide that level role modeling. a big role for mentorship. soundograms themselves promising. is this scalable? is what really talking about in terms of the mentorship, the heavy one-on-one focus as well withe instrumentation

attributes, is this something that we could see as a broader based solution to some of our challenges? >> i think mentorship is an important part of that. role models for the sugar folks. an important part of what we believe in strongly. it at the try to do top level because we think the tone starts at the top and leadership matters. reynolds was a partner in now devoid, -- deloitte, we bring in latino directors. a fantastic role model for all of us. the idea is to remind people of color that when you get into corporate boardrooms, you have is possible to fight for inclusion when you are there. and to make sure that your organization is spending

philanthropic dollars on the kind of issues that we talk about today in supporting those institutions that need the support, not just the opera or things that have all the glitz but to support his agency that matter. you also have to make sure those andanies on the board -- giving them real opportunities. we need access to customers. time, ifamples all the you support a substitution -- they not only off the job, they are highlighting the successes of minority business people. by the way, they put it out that silicon valley is not have very many advocate americans on the board and all of a sudden, a couple years later, there are people of color on apple's board and hp's board. it is important for us to educate our leaders to fight for

these issues to do the right thing to have inclusion everywhere and have people have an opportunity to succeed in every aspect of american life. proud of some of the research and studies that have been done that there are 9 million youth today who feel they don't have somebody they can go to. this is why the mentorship is so important as part of the effort because the research has shown that with the mentor program, whether it is one-on-one or peer to peer mentoring, they could to participate learn more, earn more, less likely to get involved in negative activities and more likely to graduate. there has been some real data around that aspect that i think would help.

the -- 65% more likely to graduate than those not involved. 130% more likely to lead an initiative or effort and 81% more likely to actually participate in sports or some other extracurricular activity. involvedlikely to get with volunteer work. it makes a big difference in impact on students. there is a demanding need out there. when you talk to this kids, they will tell you. they are looking for someone who can help. they may now have a leadership role. instances, one example, one young lady, when we adopted the first class of ninth-grade, we asked the

question, what you want to be when you grow up? the highest aspiration was to be executive secretary. that was as far as anyone in the class could see. andr this mentoring program they graduated, she went on to that only graduate but that class went on to graduate at a rate higher than the district. a rate higher than the southeast and the nation. to those high school and went to syracuse university and studied abroad and today she is a city councilwoman in connecticut. her of --ure helped give her an example of where to go. she is just one example. the involvement of an adult who tells a person that i believe in

you and i care about what you are doing and i care about your attention and believe it. >> i wonder whether this emphasis on mentorship, fixed it within any of the data points you look at? >> it is borne out in the data. when people think about improving education in the united states, there's a lot of focus on the dollars that we draw the problem. i think that is probably not the right way to look at it. it is how you spend the money that is extremely important. the u.s. actually spends more per student in terms of dollars in many other countries like sweden or finland that appear to have much better educational outcomes. the issues are more related to things like mentorship or teachers or the way in which schools are set up that have important consequences. for example, in the u.s., one of

the struggles we have in the public schools is to keep teachers in the classroom because oftentimes those highly successful teachers can have very attractive careers and get paid much more and have more stability in other professions. working hard to keep teachers who serve as critical mentors, one possible set of mentors is extremely important. exactly as we, were hearing from curley, the were exposedpeople to in childhood have a dramatic influence on your career prospects. we had done a study of where inventors in america come from looking at people who have patents and we see that if you happen to have grown up in an grown-ups whot of are innovative, who are much more likely to innovation yourself.

the way that you can see that mentorship seems like a pathway is that the exact fields that you going to is very closely influenced by where you grow. if we take two kids who are in boston and wonder about in silicon valley -- one girl up silicon -- grew up in valley and the other in minneapolis which has medical devices, the child in minneapolis will have a patent in medical devices when they adult and inall -- silicon valley, computers. there are precise the terms that pathways that people follow. it also speaks to some scalability issues because it shows that at the national level, the pathways that people are choosing art influenced by who they are exposed to. are influenced by who they are exposed to. the data that shows that

children do just as well as -- black kids do just as well as grade art in third 10-40 times less likely to become mentors and have patents than white kids with comparable ability. mechanism youthe have a big gap in innovation is precisely because of exposure. what are the internships? role models? connections? when looked at from that perspective, these issues of opportunity that connect to the broader picture, it is not nearly about giving kids of color better opportunities and they can succeed which we think is important, but even for the rest of us, that might be the next person who develops an important blockbuster drug or

something you're missing out on because we don't have the right set of mentors because we don't have the right system. we were fortunate in atlanta to have as one of our members, the inventor of the super sucker. -- soaker. has several hundred patents himself. organization, the he took it out and created a robotics program. there and heids has been working with those kids and got them involved in those competitions. and then went to the first robotics and they won first place in the category. students who had never been exposed. not only has that worked to the

skill building, it is now a program we have replicated. more chapters are picking up on the robotics as part of the effort. we did have -- >> i believe in all the things we have talked about. i would hope that it does not give the large financial institutions, banks, insurance companies, the big fortune 100 companies and excuse to not do their part. to hire people of color, give them career paths to get to the top levels, become role models. knowsure the institutions to hire them. it is coupled mentor. if we believe in a model of strong mentorship, gifted but people of color and those physicians -- positions.

>> if you look at the private , he don't see people of color as executives let alone partners in the vast majority of these institutions. your critically right. truly -- we create the philanthropy for our own communities made a difference in our own communities. that is a critically important and that gets lost in the moment of folks who say we will do the education piece but not think any of us are good enough to work with them they after day to give a real opportunity to work with businesses at the same time. we have to create more of that possibility and mindset of the money managers. i see it every day in the corporate perspective where if you bring a proposal and create division, the whole issue of

efficiency and the fact that -- we have to create the same kind of opportunities for communities of color and workers. companies take experience all the time -- instrument -- experiments all the time. with a challenge these organizations to do that. organization when we had some very successful programs that we had to hold an endowment to fund scholarships, we challenged the banks in our community to say, we have been putting these funds in here but now we need to create our own rnc. we want you to bid for this. we had enough money to entice the banks to come after us. as part of that, we got several offers for private banking

services. become --an option to offered any private banking services until this came out. that helped save a lot of money. options that the broader community had were not available to them in the same context. if we had not taken that initiative, this kind of opportunities would not have gone to our membership. that is a big part of how we create wealth. we often don't get the same opportunities >> that is an excellent example of why diversity is not at odds with the maximization of shareholder value. i argued that they are absolutely come from entry. you need to diversity and diversity of thought bringing

new ideas into the boardroom, into the senior executive suite so that you are creating opportunities for marshall helder's -- shareholder value. these are a critical mechanism for bringing in new ideas, unlocking new potential wealth. to not think of these at odds. you talk about the spirit, it may not work, it might be not a good use of corporate funds. i think the example you have given is an example where value is added by virtue of the fact that they were people of color in the right place at the right time making the argument in a compelling way to try something new. >> a couple quick examples, on brownsilon board, eddie

been around for over 30 years, a top performer two of the last three years, mutual fund manager of the year. people some work to get to think about getting people of color in this management position. he is done in a further job. -- and extort our job. -- extraordinary job. for example, baseball became a better place when jackie robinson started to play. show that they could help the team win and more african americans played. the talent is out there. he was a state senator, he fought hard to make sure that people were included in everything because he knew they had diverse talent. diversity of thought at the same time.

goes together for a winning strategy. >> i apply this to the basic role of how we engage in the treasury department. one thing we have struggled to do and to do well is come up prescriptions to some of our hardest problems that actually require people around the table who have something to offer him from diverse perspectives. lose out if we don't have diversity in terms of bringing analytical andt experiential forces necessary to make a decision. from the boardroom to the where we need this diversity. we got into this discussion

because it is related to the mentorship piece. creekmore mentors and the mentorship piece a piece of what started the conversation as having to do with the important factors that are at play that are necessary for thinking about how we bring about greater aclusiveness and participation into the vehicles of opportunity. that i wantvehicles to close with and get a sense from each of you as to what you think we can be doing better but that the private sector level and at the government level to be enhancing those opportunities to access the tools that provide opportunity that are the .obility factors for our people

>> there are a number of policy areas we can focus on once we recognize that community and a set of factors really seem to matter for opportunity. one example, housing policy. spent about $45 billion in the affordable housing programs. housing vouchers, affordable housing, provision by the government. when we are thinking about those policies, and his extended -- extremely important think about -- it matters for long-term success areas are children. emphasized poverty in atlanta, these communities of concentrated poverty of the places where we are seeing the least opportunity. at the practical level, what might you do? section eight housing

voucher program, 80% of people who have those vouchers are poverty, low high opportunity areas. working to develop a set of pilot programs that tank that number so that people can find affordable areas that deliver much better opportunities for their kids. using the same system stays in from the government. you increase integration and improve outcome without greater expense. opportunity bargain that can be achieved. that is one example of a simple change that does not require additional expenditure, figuring out how to get families better information in areas that will provide better opportunities. another example, the big tax

credit in the u.s. for long-term housing. credit to build affordable housing. the way it works is that developers get larger credits to build in areas with lower levels of income. what that entity is that it becauses segregation rather than having more formal housing and mixed income areas, you have additional affordable housing in what are already high poverty areas. your further segregating communities by income going in the opposite direction. thinking about some changes in the housing policy context can be quite valuable. i think there is a changes in the context of school trying to make our ability to retain and pay themchers

higher salaries and make them want to stay in the public school system. that can make a big difference. there are certainly try to schools that have been shown to be extremely effective in producing outcomes for kids. picking out what they're doing it has fortinet to the school system or scaling the schools of another area. thinking specifically about these areas in concrete ways and long-term outcomes offers a lot of opportunity. on the education piece, i think the private sector is a big deal in helping with the improving outcomes of the educational system. we started back in the mid 90's, we took a school in atlanta doing initial testing, only 24% of those kids were meeting standards. over that tenure investment, we

employees who200 agreed to go to that school everyday and tutor the kids. third and fourth grade level. the school system provided the buses and got them to the school and brought them back. after five years, they went from 24% to 70% and now does consistently in the high 90's. this can make a big difference. particularly for youth try to benefits for the future. can grow the products as opposed to just exporting them. grow them as we have a community. , the privatecale

sector can learn from what government has done. i can the days when they started the initiative, been able to create a lot more women and minority -- the private sector has much more possibility in their ability to make dispositions. i think adopting this mentor smallms with other business organizations will give them a chance to grow. i understand the global economy is dependent, at the same time we can do more than what we have been doing. i think the private sector can learn from that respect. things started with 15 -- the same earlier, the -- in chicago, we used to have academic and owned businesses that were anchor institutions. companies like johnson products

that have character -- hair care products. first public we traded african american business. over 500did they have employees on the south side, mr. dawson port with law firms my cutting firms come up like , he startedagency an independent bank that help to give loans to local communities and civil rights leaders like dr. king. he even started so train -- soul train it advertised -- and advertised. made a difference in the communities where they could hire people have exponential benefits of a strong increase in institution making a difference.

a closing,, speaking of dr. king quotevesting, he had this that i keep in my phone, 1967, he said, i cannot see how the new growth would be totally liberated from the crushing waves of poor education, squalid housing, and economic strength struggle until we have integrated with power into every level of american life. that is the theme i've been thinking is so important. we integrate from every aspect of american life and make a difference and committee of colors. colorthe communities of we care so deeply about. [applause] >> those are eloquent words. i want to thank the panelists for the important and precise perceptions that you have shared

with us. i think that the challenge of bringing about a more inclusive growth is going to depend critically on our being able to unlock these opportunities that have begun to be unlocked but still require significant attention, significant work by both the private sector and the government as well. we are aided by a significant research which drives us in moving forward and we are inspired by the work that has been done and the work that lies ahead. let me think the audience also for listening to this panel. and i want to thank the panelists for the time and insight. [applause]

we will hear from the mayor of atlanta, the founder of a group called operation hope and u.s. ambassador andrew young. this is just over one and a half hours. [ambient noise] >> thank you everyone for rejoining us. welcome back. i will quickly introduce myself. i am melissa, the secretary for consumer policy.

it is a pleasure to introduce our next panel where we will focus the conversation on financial inclusion. boss,l be moderated by my our acting assistant secretary for financial institutions, and other participants on the panel include ken saunders, founder, president, and ceo of e-group. joined by mayor reed of o'brien,nd john founder and ceo of operation hope and also a very active and ,ngaging friend and colleague as well as prior member of our presidents advisory panel on capability. please join me in welcoming them to the stage. [applause] thank you again, thank you

melissa and to all of our panelists. the macropick up from question on the economy to the personal question of the interaction between regular people and financial institutions. i think in light of the name of this forum and the building across the street, today's namesake, the freedom and trust fund, talk about the role of financial services and institutions in building prosperity. for individuals. >> first of all, i want to say thank you for this opportunity to participate on the panel. it is an honor. the history and purpose for aich it was created, it was response that was needed to

address the people at that time and give them a safe lace to keep their resources and a way to actualize some kind of dream of economic prosperity. likewise, financial services today continued to serve that role. if you think about it, as we listen to deputy secretary the macro economic -- economic changes that have occurred for the broader part of our population, that was driven, in my opinion, by the administration and the treasury department response by providing capital when the economy was in a freefall. it is about a capital for the bank, because banks are blessed with the charter to give a powerful leveraging factor. perspective, having

mbi's,ore than 20 years, i liken them to the navy seals. my dad was a navy guy so i am partial to them. they are the specialized forces and tactical operations that need to be dispatched in order to actually deal with the disparity that we discussed between mainstream america and the minority population. financial services have served a role of providing safekeeping of the financing dream. people's ability to buy homes, building business, create job creation. from cradle all the way through in end with their partner the financial dream and process of enjoying prosperity in the

country. it is a privilege, a joy, and one that we need. when we think about the role of institutions, sometimes we think of them in terms of links and networks, but in fact, as a mayor, you oversee a huge network of people that are interacting with your citizens every day. how do you think about your own citizens financial lives from the perspective of a government? >> from the perspective of city we have a sense of a fair shot and a pear-shaped. just yesterday i was in the bank and i saw someone withdrawing money and getting a cashiers check to go and buy their first check -- home. it brought everything back to publicfor me from his service standpoint.

number ofwe have a leverage to make sure that people have an opportunity to be a part of the economic mainstream. and we have the ability to quickly act when we see programs or initiatives in other cities and states that are relevant to our citizens. for example, we are partnering with operation hope, our own did -- police department to send out police officers for financial literacy initiatives because a number of our police department were experiencing economic stress. now we are going to be with going through a program that is going to make them more financially resilient and make them become better officers because the stress that comes from financial mismanagement, and you have 2000 police officers policing your city to the extent that we can

improve their lives, make them it is probably going to be a better officers when they are on the street. cityy to make sure the remains affordable, which also creates stress and tension and we are able to leverage a like the atlantic fault line. featured on the front page of the new york times as one of the most transformational projects in america and the world. thereested $480 billion -- 480 million dollars there. 40,000 housing units we are going to build on the atlanta fault line. more than 5600 of them will be affordable and that is going to be financed in partnership with many of our local banks.

are working hard at in the city of atlanta is to make sure that we do not lose the equity argument and that we work with our banks as we recover from the great recession. the other thing i have done is -- of a cabinet number level officials. you need someone in the room who is arguing for the person, who are very goodhearted, don't talk -- stop to think about. expansion, because we have a chief equity officer 94% of thee us, people of atlanta will be touched by the upcoming referendum on insert -- infrastructure. if we would have had somebody advocating for people who

traditionally do not have an advocate in the room, even when they are goodhearted, there needs to be someone who is in to financers, developers, the mayor, what about those folks over there? all of that comes back to the financial system. finally, i would say this. that wery important understand that there is a different level of experience with the financial institutions and really enjoy the process of educating folks who may not be as comfortable in banks as with investments. -- and with investments. i was thrilled with the treasury department half leadership on my ira, which is a program being talked about. it is a very simple message where everyone has the opportunity to start an ira that is portable.

initiativenched that , i was thrilled to know, because it is another landmark that america used to create a which istable city going to be the big debate in america over the next 10 years. people are moving from the suburbs into cities at a moment that is unprecedented in the last 40 years. we are going to have to have a big national conversation about how we poll that off. .- pull that off people who are already in the city get to stay in the city and welcome the people who have decided to make the city home. i think atlanta can be a national model because inclusion dna,quity is a part of our

primarily because of leaders like dr. martin luther king and ambassador andrew young and other civic and business leaders. i >> i think it is striking that in this conversation about financial inclusion, we have talked about comfort and stress. so john, i want to turn to you to talk about these two sides of the coin and i think it is so notable how many of our financial decisions are driven by stress and how much we see when we talk to low income americans across the country that their decision not to use baking products is driven in .arge part by lack of comfort so john, you have spent an enormous amount of time thinking about how financial stress operates in communities and

individuals, finding ways to build bridges between that place of financial stress and discomfort, discomfort with the that goes into banks, credit unions, talk to it -- talked to us about these levels of stress and comfort and how they operate. what we can do to bring more people in. >> first and foremost, i must say that for the record, the treasury is amazing. you don't often hear that. but in the meantime, let me say that we are sitting in a moment of history right now. but history never feels historic when you are sitting in. it just feels like another day.

dr. king went to the grocery store. kidsnt to his kickoff -- baseball game. but in hindsight, thanks for putting your foot into the cap, your shoulder into the wheel. left, young said your last name sounds familiar. that is because your grandfather stood next to dr. king marching. in those southern towns. no wonder he is a public servant. the mayor has a history of public service. it goes deep into his family's bones. my guess is you have a history of public service that goes deep in your bones. , secretarycknowledge lou is probably one of the most

progressive secretary of treasury. the most progressive since alexander hamilton. we named the treasury annex building, that was extraordinary that he did that and forever more, that will be our history. and you stop and think -- you have to think -- thank people for doing the right thing. because they did not have to. can we just say thank you? [applause] >> you are all heroes running policy office, we have one of the most progressive mayors in the country. the most effective mayor in the country. this is all the same conversation, goes back to your point.

the campaign for respect and dignity. this is not about financial literacy, per se. this is about respect and dignity. we just have to live in an economic age. i think that while all of our policies are the same. after 250 years of slavery, 1870, 1970, it is not fair to say that african care -- african-americans might be diagnosed depressed. self-esteemhe case, is critical to success, then without self-esteem and a good environment, you don't see opportunity without that. it has nothing to do with money. you have to wrap the issue with dignity, reach these people

because people are brilliant. they do not know they are brilliant. that you know what is killing you. so, we've got some work to do and that work is not just analytical work. that is why i commend you for doing this forum. it is aspirational work that reintroduces people back to their human potential and that becomes economic energy. that economic energy turns into jobs. we just have to find them. and, that is not going to happen without an economic system, banking system that can meet them halfway.

when i discovered the friedmans bank -- thank you for but a meet in the right direction, my life changed. all of my work and all of my dreams clicked and i finally figured out that poverty amongst people of all races made sense to whether you are white, and economically depressed, there are more poor white americans than anyone else. if you are black and urban, you are under the same stress. what we think is race is not. underneath class is poverty. that, weody was doing would not have the problems we have now. everybody would get along just fine. se so-called problems are not red, white, black problem -- they are green. it is economic.

those rural small towns, mostly caucasian, high school educated, we let them drift and now they are upset. black and brown people have the same issues. what the mayors have done is take the emotion out of it. i'm going to actually solve the emotional issue by being nonemotional. we have to take the emotion out of the issue to solve it. this is an emotional issue, issue of dignity, issue of fair play, but if you get emotional, i guarantee you will lose. you cannot react, you have to respond. the mayor, who i'm sure wants to curse every other day because somebody is doing something irrational, is smooth and balanced and reasonable and listens to everybody.

just like dr. king did. the president does the same thing. they are able to find this common ground. the is like atlanta is eighth largest economy in the country. we have problems, challenges, yes, but we are addressing those. think that we have to respond and not react to the inequalities, unfairness, on balance and we had to do something about that that addresses the emotions, the inequalities, but gives people a legitimate place to stand. what i have done is taken the race out of the issue, the motion at of the issue. these communities they are part

of the neighborhoods. every place where we have and nothing will change your life more than to move your credit score 120 points. it is of any race. we can get the credit score up and finish with lincoln did -- we will come back to this later -- i've created my own model that takes the inequality and these emotional sense of unfairness, turns it on its head and makes it something that is measurable that you can build your self-esteem and will -- wellness. when your credit score goes up, your self-esteem is going up, yourself -- your sense of well-being, your options. now you want to be a homeowner. job, you want to get a

want to create a job and be a small business owner. we get the memo on money. that is what happened when the friedmans bank failed. we didn't get the memo on money and free enterprise and that gives me so much hope. it is not like the government was stupid, we just didn't get the memo. if you give 100 million people in the memo, the gdp will go through the roof because it it is the poor people pain, the injustice that gives the opportunity because you cannot have a rainbow without a .torm first >> you referred a lot to the power of symbols. to understand the economic mechanisms and connect them to symbols that allow them to connect themselves to some of

the financing systems of opportunity. in your business, when you were giving out mortgage loans or financing small businesses, now today, when you are acting as an investor in my doherty -- minority owned institutions, how do you connect those individual stories to the powerful symbol of a bank that is whose ceo is an african-american woman, or the columns that sit in front of bank buildings -- how do you connect the raw economics of a job, small business, how it is going to make money as a symbol of a story of one person's empowerment or the role an institution like a minority owned bank places? >> it is really through our customers. if we are able to -- when i

became the ceo, it turned 100. we had customers that were in place for generations. that is not just us. many of our banks have been around for decades. the work is not new. one member of the audience is third-generation ceo. when you are actually able to show people, show them, men and women whose lives have been able to transform, there is nothing more powerful. often times, even we would go through our audit process, i would say we would look at these numbers but they don't really tell the story. of story is in the faces young saving students, the kids that were brought into the banks and open savings accounts. you see them smiling and now when they are sleeping, they are understanding compounding interest.

they are making money while they are asleep. you can share those stories with them and allow them to become excited about money and transforming their lives as they grow up. so many of our customers have been with us a long time. that has brought this new movement and it is so exciting for a bank. >> how do you cross that story -- if you talk to someone who is interacted with operation hope and they come and sit with one of your bankers and it turns out the plan does not make sense to them. how do you help them make that transition from a person who has person and a dream to a who is actually ready to start a business? the role of the banker in doing

that and how does it work? >> i'm so glad you asked that . specialized,s, customized every day. sitting down with the individual and once they have developed their plan, actually rolling up your sleeves, being able to take the time to sit with them through cash flow productions -- projections, maybe get them an accountant by providing the resources, pulling together the things that are practical to allow them to go from a to b. again, why our banks are so important is we are nimble enough, entrepreneurial enough. we know what it is like to actually grow our businesses. so, we have a unique understanding of that individual sitting across from us.

large --are very, very there is a limit for all institutions and sizes, but ours is very specialized and unique and necessary. when you are very large, scale is critical. the routine, the rochus of it -- ropeness of it is how you make money. it is sitting down with that individual, being willing to roll up your sleeves, spend nights. many of our customers come in, we help them balance their checkbook. we are showing them how to write their first check. we are doing whatever is necessary to help them become engaged and involved and successful in the financial and banking system. one of the things that is interesting to us as we look across the country, especially when we talk about financial empowerment, is the role of partnership, especially

between cities and financial institutions. it has been more individualized and general develop its. how do you think about managing and developing your set of partnerships, whether it is in direct service or broader product with financial institutions, and what has that been able to drive in that relationship? >> i think leading cities in america and the world have great banks. i was actually in washington -- i cannot even remember where i was flying -- just the other day, suntrust bank celebrated its 110th anniversary. wherever i was in america, i was in atlanta, it used to be big t bank. there were a series of mergers and it became suntrust. the bottom line is the city of atlanta is unique in the south because we have a banking

institutions. when ambassador young was mayor, we had first atlanta, citizen and southern which is now part of bank of america. really because of what the georgia legislator made, the city of charlotte got the banking industry that atlanta had. we ended up being fine anyway. our legislature did not change charlotte, north carolina was changing theirs. that said, i think that, in atlanta, i have a group which are the 25 largest that i meet with on a quarterly basis. it includes the leaders of our leading banks. in order to create synergy in terms of the direction of the city, and it also allows you to make a request and have a

terrific relationship. i think increasingly, businesses understand that with health and prosperity comes a social demand. it does not have to be hostile or overly aggressive, but you do have to act because leaders of banking institutions are frequently preoccupied with running their businesses. ant i found is i have initiative in atlanta where we pay for the college tuition of kids who graduate from our high schools. i have to raise a pretty significant amount of money to do that. i pick up the phone to call of issues.n array i think great cities have great banking relationships. you have to keep the lines of communication open. you do need to make a demand around equity. i find that as long as you work

at the relationship -- i think being mayor of the city like gardening. you don't really know when you will need to have a mutual an official relationship -- beneficial relationship but it really is like gardening. you have to get the weeds out. that is how i look at our relationship in the city and atlanta -- in atlanta. that is how we built the economy from a sleepy town that now has $305 million in the atlanta metro and our gdp is larger than 30 states. look at where the city of atlanta came from from the time ambassador young was mayor, it is definitely one of the most significant economic stories in the life of america. i think that ambassador young is right that it really does follow bank motto that

actually got done. the what have been impossible without the political relationships and business relationships working hand-in-hand. and it would have been impossible without strong banking systems. finally i want to say this -- i think leaders of major american cities need to be far more conscious of our role of making sure that america has greater gdp growth. that is something that more and more sophisticated mayors are thinking about. if you believe in america's unique role in the world, you need to have cities that are well run. so, in order to meet our obligations, the u.s. gdp is around 22%. the question is how our population will maintain that.

to the extent that we meet our obligations around the world, it is because we have healthy cities. accounts for more than 75% of our gdp growth. i think all of this increasingly will fall on us and the mayors of our cities. if we don't continue to focus on this equity issue like a laser, we will continue to see incidents like we are watching right now in charlotte. let me tell you, when you have these moments of controversy, you had better be a mayor in a city that can calmly explain what you did before the moment of tension. banks, what with you did on housing, what you did on transportation, what you did on having a police force, what you did on officer-involved shooting's, what you did on a number of incidents with officers.

rigtht? one of the best quotes i heard recently -- i was talking to a banker about gdp growth -- i was talking to secretary lew about it. we would really like to be at 3%. it would be helpful if we were at 4%. he said the problem when you talk about gdp growth is somebody says what is the difference between 2% and 3%? people frequently say it is just one point. the banker said to me, but his hand on my shoulder, he said it is actually 50%. [laughter] this is good stuff. it really does make sense. 2% to 4% is not to points. it is 100% growth of america's gdp. it was a special moment for me. that was as well put as i have heard why i need to do a good

job at running the city of atlanta, right? so, i think it really does bring a mission to focus and understand why you are not doing people a favor to get these issues of equity right. as a result, last year, the city of atlanta had $2.2 billion in new construction permits, the highest construction activity in the history of the city. including the olympic games which was the previous gold standard. >> i think the concept of touch point. you went through the number of mayor, you need to be representing to your citizens that you look out for the riches -- further interests -- for their interests. how many different touch points there are with the city or

financial systems. i know in your work with operation hope, you are constantly thinking about those touch points. concepts.urial whether you are able to walk into the bank branch, even though it is not ready to serve, to be able to refer to an open side. how do you think about constructing an ecosystem where there are enough positive touch points that if somebody tries to construct their financial lives, they are getting lots of opportunities and positive outcomes? we know it is not that there is one lonely hope -- if i learn about compound interest in the fifth grade, after that, i'm fine. that is not how anybody's life works. it is constant exposure, constant guiding people back into the right place. how do you think about constructing these touch points

in making sure they are all pushing individuals in a positive direction and giving them positive feedback to transform their lives? that if you want to put a kid to sleep, give them a financial literacy course. [laughter] i will remember that for my 2-year-old. [laughter] >> a financial literacy course. >> a traditional, left brain, analytical program -- it will put a kid to sleep. but, it would put anybody to sleep. you cannot have education without aspiration. it is not more complex than that. i think if we get every kid a job out of high school, the dropout rate would go away because what kid would not want

a job? we are thinking in some ways too hard about this stuff. people mean well. thinking -- speaking to them in a language they can actually hear you. i think ambassador young taught me something. desen without being sitive. even leave your adversary with their dignity because if you don't, it will make you miserable. when we deal with the issue of north carolina, whatever, the minute you start giving out blame, you are done. by reactingsponds the neck up. you have to think about these things and then you have to make it relatable. it takes 20 years to change a culture. i think we have made dumb

decisions. the way we have done that in the invent opportunities to uplift into something that is viewed as really out of touch which is the banking system. i think it has become a moral calling. banking has to become once again a moral calling, not just the place to make money, because even a uplift the gdp of a city without an ethical banking system. now, that is the freedman's bank. connecting it to where we are today, to me, is hope. because banks traditionally discriminated 30 years ago, i know the occ is in the room, we have some bank ceo's in the room, the ceo of suntrust is here, i know the ceo is

watching. they won't say this, but almost by law of statute and for good reason, but almost have to say no to somebody they think is a nice person because if you get a credit score that is 500 or 550, they check your application and know they cannot approve the. you. the entire process, 45 days and it will give you a no. now the person is upset. they will say i know this is a waste of my time. inside with suntrust. you see target and then starbucks on the right. you go into suntrust. person takes the application. it is not going well. just trying to buy a home. $140m,000 mortgage is the number in this example. she gets declined.

she goes to work. we tell her why she was declined. do that report with her permission. that must be in error. you should dispute that. why? you have a right. and theispute that three credit bureaus cannot confirm under 30 days, by law, they must remove it. nobody knows that. we do what bankers cannot do, we dispute it with them. it gets removed, she comes back in 45 days. credit0 points on my report. now, you got from 560 to 600. what else can we do? that was my phone bill, $1000 -- divorce. that was 10 years ago.

hsbc communications, the bail by at&t. the financial company owns the debt. let's call it. call -- what do you want for the debt? $100. ok, i will about $200? no, $100. the client is with me. is it ok if we give them $200? sure. why would you pay double what we are asking for because if i give you $100, i want your e-mail address, i want your boss's name and i writ want you to write a letter to mrs. jones to say this is clear and satisfied. you have to let me call you back and remove it again. he says deal. we got an 80% discount, he got a 200% profit on his investment.

everybody wins. her credit goes up 30 points. we mover credit score 80 points in three months. her confidence, or belief in her self. she walked across the hall and gets approved for a mortgage from suntrust. she becomes a homeowner in tennessee, a taxpayer. you think she will vote now? i think so. you think she has more dignity? i think so. we have to bank out of the no business and put them into the yes business. we will put it at scale. my goal is 1000 locations because i think 1000 locations is enough to create a starbucks experience for most communities. it is financial inclusion. that was funny. otter know about you. [laughter] wherever you are, starting in

atlanta, i wanted to become the best practices. wherever you are -- we are doing this in rural areas. cafe just came on board. we want to go where people are struggling with their financial stress and turn that into economic promise. it creates gdp, entrepreneur's, small business owners and all the lights go on. basically, driving business of every working-class family and make it common sense. a concierge for your life. right now, i don't need a private banker. we are fine. we do it over our cell phones. i do everything on the cell phone. the person who needs a private banker today is a single mother with two kids and a job. somebody who is working for her. they need a private banker

because they don't understand the system. life is complicated. they are stressed out. the husband and wife are arguing which means the kids are dealing with that stress and that environment. tipping think this is a point and a rippling point where we get people out of the protection, which is not doing well, and move them into consumer empowerment so the mayors can turn that into gdp. we are waking up america all over again. >> you talk about really investments of people investing in other people. turntalk to me about your projects where you are really trying to turn equity investment into enabling the kinds of empowerment that john is talking about. >> one of the things the national bankers association did

was conducted survey of our members. as we looked at where were the greatest challenges and what is the greatest needs for minority depository institutions in the country, it is access to capital. certainly with capital, those banks can be strengthened. they're dwindling in number. the focus of my current project is really to do all that we can to provide resources to strengthen the sector so it can continue to do the work and can continue to partner with institutions like operation hope, banks like suntrust. like the chase project. that is really what we are focused on because we know if we are able to strengthen from the bottom, strengthen america and to lift all of us up, we can do a better

the fdic did a study in 2014 that showed the impact and significant social roles that m bi provide in terms of financing and providing home mortgages. in terms of locating a branches -- there branches. we know that if we are able to thengthen and provide sector with the resources it needs for technology. to be all to engage in a powerful way with millennials. to be able to strengthen and broaden and product offerings, then it is so much easier as we talk about all of the benefits, that the entire country will experience by all of us becoming more prosperous. >> mayor reed, how do you think about this concept of investment? when you think