Micro Enterprise Summit Afternoon Plenery - Building Wealth and Assets in Underserved Communities

Panel: Hon. Anna Escobedo Cabral (US Treasurer), Michael Barrera (US Hispanic Chamber), Leizhu Lui (United for a Fair Economy) , Regina Montoya, Moderator (New America Alliance)

Meizhu Lui is the author of the book
The Color of Wealth.

Notes from Michael Barrera's comments:

- Latino micro business is one the rise. 108k latino businesses in the US.
- Asset building is key, Latino's understand business
- SBA has been a key help
- Assets are a key determinant for loans since they determine lending criteria
- Example - working out, start with 5 lbs and work up to 200 lbs. Micro lending institutions are like personal trainers that help build up small business.
- IDA's are becoming more and more popular with lenders. Drawbacks are high admin costs and lack of interest.
- Black and Hispanic median met worth is currently flat. White median net worth gained 6%.
- Assets = leverage.
- Businesses with assets are able to build capacity
- 17% of US business meet the official definition of micro enterprise
- Many folks have the desire and skills to provide a service, but not to run a business. They require additional information regarding bookkeeping... (basic business skills)
- Real estate downtrend

• Many start ups leveraged homes
• lost tax revenue
• 10% decline in housing prices to come in the next year

Notes on comments from Meizhu Lui

- Race and gender matters (from her personal story)
- Middle class is losing ground

• Manufacturing jobs are gone
• micro businesses can make up

Income gap between rich and poor is growing. Racial income gap remains (quoted statistics)
Assets:

• Important - helps 'weather storms'
• 1:14 net worth ration between white and people of color
• Not having enough money to last three months if income is lost = asset poor if
• Minority households are far behind white households

How do people gain assets and wealth?

• Common perception is that there is a level playing field and is due to lack of initiative

There is a huge need for non profits to play a role in being a conduit for resources.

Notes on comments from Hon. Anna Escobedo Cabral

Remember: it's also about the children and families.

We have to help kids stay in school. It's the beginning of success. Even in the largest / most successful economy in the world kids (esp. Latino) kids are dropping out.

Financial education is ABSOLUTELY essential.

• Too many kids are graduating high school without basic knowledge. We have the highest amount of dropout rates for 18 to 29 year olds.
• It's also important to families... We must do a better job in educating the public
  

We must get the word out to people who will face a mortgage reset in the next 12 to 24 months

• Individuals were qualified at the 'teaser' rates they got at origination, not the adjusted rate.
• People have to reach out and call their lender to work out an arrangement
• Financial literacy and education coalition at Treasury
  
• 10 million unbanked in the US (many deal in cash only)
• Life is costly when individuals don't have a banking relationship
• remittances, bill pay, money orders, check cashing...

- Treasury understands the need to work internationally

Audience Q and A:

Immigration reform: those for comprehensive reform are being out witted. While we march, others are calling and writing. Congressmen are getting 20:1 letters against reform. We must get involved in the process.

Financial Literacy: President is considering financial education council. Bring together community based organizations and leaders to speak about issues and needs. Information is everywhere, intersection with individuals at critical times is paramount. Community orgs, government.. all have a role to play.