Educating the Unbanked

To achieve universal financial participation, we need more than smartphones, apps and always on Wi-Fi. The real answer lies in good old-fashioned education.

Thanks to the digitization of transactions and the proliferation of mobile devices, more and more people have access to cheap and convenient financial services, which makes them more likely to start new businesses, build their credit and invest in their families and communities. A growing body of research suggests that financial inclusion – defined as having a bank account for storing money and for making and receiving electronic payments – reduces inequality, strengthens economic growth and even improves physical health.

We are on our way to achieving universal financial access. Right now, 85% of global commerce still runs on cash. Two billion people are bankless (don’t tell Wells Fargo) but according to the World Bank, every adult on the planet could have a bank account by 2020, which is critical to ending global poverty. This is why finance, accounting, IT are the fastest growing higher education programs.

But having a bank account doesn’t guarantee financial participation – access to a full range of services such as credit, savings, remittances and insurance. For the affluent, checking is free and credit is cheap. For everyone else, being poor is expensive. In the U.S. alone, underserved consumers – the 68 million Americans who lack access to mainstream financial products – spend $138 billion a year on basic money-management services that many of us take for granted and spend next to nothing on.

Technology will continue to provide a pathway toward universal financial participation. Biometrics will provide digital “passports” for identity verification, a critical prerequisite for financial services, and new data sources, such as phone and utility payments, will make it easier to establish credit.

Not all answers like with technology, however. All the financial apps in the world mean nothing if consumers don’t know they exist, let alone how to use them. The biggest barrier to full financial participation is not a lack of Wi-Fi – it is basic lack of knowledge about digital services. We need to increase financial literacy. Equal access to safe, affordable and easy-to-use financial services should be a right, not a privilege. When our approach to education and financial literacy is as innovative as our apps, it is a right that everyone will be able to exercise.

This article is taken from an editorial by Daniel Schulman, CEO of PayPal.

GOOD READ -  "America's Dazzling Tech Boom Has a Downside: Not Enough Jobs," in  The Wall Street Journal: "Hiring in the computer and chip sectors dove after companies shifted hardware production outside the U.S., and the newest tech giants needed relatively few workers. The number of technology startups fizzled. Growth in productivity and wages slowed, and income inequality rose as machines replaced routine, low- and middle-income, human-powered work."

MANAGEMENT 101 – How to blow crisis management:  It was clear John Stumpf, chief executive of Wells Fargo & Co., was in trouble on Sept. 20, when senators from both parties castigated him over the bank's sales practices. ... The bank could have been better prepared. Summoned for hearings in Washington, Mr. Stumpf and other executives didn't answer many questions from legislators - in public or private - about sales practices that had led the bank to agree to a $185 million fine and regulatory enforcement action. ...

Even before the hearings, Wells Fargo had been slow-footed in responding to outrage over employee behavior that included opening as many as 2 million unauthorized accounts without customer knowledge. It misjudged the significance of firing 5,300 employees over five years for related bad behavior, failing to tell its own board of the number before regulators made it public. The botched response, a textbook example of how not to handle a crisis, reached a peak when Mr. Stumpf stepped down.

KRAUTHAMMER WATCH -- "It's not the 'locker room' talk. It's the 'lock her up' talk": "Such incendiary talk is an affront to elementary democratic decency and a breach of the boundaries of American political discourse. In democracies, the electoral process is a subtle and elaborate substitute for combat, the age-old way of settling struggles for power. ... Vladimir Putin, Hugo Chávez and a cavalcade of two-bit caudillos lock up their opponents. American leaders don't. One doesn't even talk like this. It takes decades, centuries, to develop ingrained norms of political restraint and self-control. But they can be undone in short order by a demagogue feeding a vengeful populism."

BIRTHDAYS THIS WEEK – Birthday wishes and thoughts this week to Mike Barnicle (63) Boston, Mass.; Jimmy Breslin (86) New York, NY.;  Rep. Cheri Bustos (D-Ill.) (55) Springfield, IL.; Carrie Fisher (60) Malibu, CA.; Wynton Marsalis (55) Brooklyn, NY.; Juli Roberts …famous educator; Lindsey Vonn (32) Vail, CO.

COLLEGE CHRONICLES – Sign of the times: Students at Humboldt State University are feeling the effects of budget cuts, down to the last roll of toilet paper.

The California institution is no longer stocking toilet paper in four of the six student-residence buildings, according to Humboldt State's housing office. The university said the cost and the staff time spent restocking the paper were the main reasons the paper was pulled.

The change has driven students to desperate measures, like hoarding toilet paper. Now they're petitioning to bring it back. But will it work? Perhaps.

Back in 1998, Harvard University switched from single-ply to double-ply toilet paper following student complaints and a column in The Crimson suggesting that the university was — like its low-quality paper — going down the drain.

One-ply or two, Humboldt students just want their paper back.

NEW NATIONAL STUDENT DEBT FIGURES: Students from the class of 2015 who took out loans to pay for college graduated with an average debt of $30,100, according to an analysis released today by The Institute for College Access and Success. The widely-cited figure, which is up 4 percent from the previous year, captures the average debt of students who received a bachelor's degree from either a public or private nonprofit college.

Nearly seven in 10 graduating seniors in 2015 used student loans to finance their education, TICAS's annual report found. The group's analysis shows that while most students took out federal loans, only about one-fifth of students borrowed private or state-sponsored loans.

SYLLABUS - Average student debt for the Class of 2015 increased by 4 percent, to just over $30,000, compared with the year before, according to a report out this morning from the Institute for College Access & Success.

-          One-third of the very poorest student-loan borrowers who got out of default through a rehabilitation program will "re-default" in the next two years, the Consumer Financial Protection Bureau projects.

-          A study out of Occidental College found that 45 percent of employees in the University of California system go hungry at times.

-          In a new report on faculty diversity in STEM versus non-STEM fields, there’s good news and bad news: The professoriate nationwide is getting more diverse, but the pay gap for female and minority faculty members is still significant.

OVERTIME - The new federal overtime rule, which will open up many more college employees to overtime pay or the prospect of reduced hours, is poised to have an especially profound effect on admissions offices. Those offices, which rely on a cheap work force to carry out time-intensive recruitment campaigns, are grappling with whether the new rule will upend this "all-hands-on-deck culture”.

HARD DRIVE - The 8,000 mile internet cable: Facebook and Google, along with partners in Asia, plan to build an undersea internet cable stretching from Los Angeles to Hong Kong. The so-called Pacific Light Cable Network will have an estimated capacity of 120 terabits-per-second - about twice that of the "Faster" cable Google and others recently launched. It's expected to go live in 2018.

TOP THREE – Political campaign movies:

            1). The Candidate (1972)

            2). The Last Hurrah (1958)

            3). The War Room (1993)

Days until the 2016 election: 18.

It's going to be a long 18 days. This whole thing almost makes you miss the trainwreck that is Capitol Hill.

RINK RATS PRESEASON NATIONAL BASKETBALL ASSOCIATION PICKS –

WEST-           Pacific: Golden State Warriors

                        Northwest: Utah Jazz

                        Southwest: San Antonio Spurs

                        Conference Champs: Golden State Warriors

EAST -           Atlantic: Boston Celtics

                        Central: Cleveland Cavaliers

                        Southeast: Atlanta Hawks

                        Conference Champs: Boston Celtics

                        NBA Champs: Golden State Warriors

NFL GAME OF THE WEEK – Sunday 10/23, 1:25 PM ET, CBS; New England Patriots (5-1) vs. Pittsburgh Steelers (4-2)  Pittsburgh without Big Ben is like The Donald without hair, trouble. Pats win 28 – 14.  Season to date (5-1)

COLLEGE FOOTBALL PICK OF THE WEEK – Saturday 10/22, 12:30 PM ET, CBS; #6 Texas A&M Aggies (6-0) vs. #1 Alabama Crimson Tide (7-0). Bama cruises 30 – 17.  Season to date (6-1)

SMALL COLLEGE FOOTBALL PICK OF THE WEEK – Saturday 10/22, 1200 PM ET, HGTV: #11 Hardin-Simmons Cowboys (6-0) vs. #3 Mary Hardin-Baylor Crusaders (6-0). Crusaders win in a tight one, 17 – 14.  Season to date (4-3)

COLLEGE HOCKEY PICK OF THE WEEK – Saturday 10/22, 7:00 PM ET: #4 Quinnipiac Bobcats (3-1-1) vs. #8 Boston University Terriers (1-2). BU is overrated, Bobcats win 5 – 2. Season to date (1-1)

THE SWAMI’S WEEK TOP PICKS –

(NFL, Oct. 23) New York Giants (3-3) vs. Los Angeles Rams (3-3), London is calling for the Giants, 24 – 14.

(NCAA D-III, Oct. 22) #16 St. Lawrence University Saints (6-0) vs. Merchant Marine Mariners (4-2), Mariners will test the Saints, but SLU wins 35 – 28.

(NHL, Oct. 22) Montreal Canadiens (3-0-1) vs. Boston Bruins (3-1-0), Bruins win 3-2.

Season to date (79 - 67)

WORDS OF THE MONTH –

Bailiwick

\BEY-luh-wik\

Noun:

1. a person's area of skill, knowledge, authority, or work: to confine suggestions to one's own bailiwick.

2. the district within which a bailie or bailiff has jurisdiction.

“Arguing cases in front of the Supreme Court isn't Hamp's bailiwick. He's an old-school criminal defense attorney.”

-- Paul Beatty, The Sellout, 2015

raza

Noun: race; breed

El Día de la Raza is a holiday celebrated in Latin America on October 12th to commemorate Columbus’ arrival in the Americas. It is also a holiday in Spain, where it is called El Día de la Hispanidad.

MARKET WEEK - Tesla (TSLA) said all of its new vehicles will be equipped with hardware that enables fully autonomous driving, with the electric automaker planning to have a vehicle drive itself from Los Angeles to New York by the end of 2017.

Wells Fargo (WFC) is the subject of a criminal investigation by California's attorney general, centering on whether the creation of new accounts for unsuspecting customers by the bank's sales staff involved identity theft.

Netflix (NFLX) and 21st Century Fox (FOXA) are in a court battle over alleged employee poaching. Fox accuses Netflix of illegally hiring two employees who were under contract at Fox, but Netflix filed a complaint questioning the legality of those contracts.

Alphabet's (GOOGL) Google unit reportedly reached a deal with CBS (CBS) to carry the network on a soon to be launched online TV service, which is likely to premiere in early 2017.

TAX - Paychecks for the top 7 percent of earners will be a little lighter next year, due to an increase in the cap on the payroll tax.

After staying flat this year, the cap will rise from $118,500 to $127,200 in 2017, a change that will affect about 12 million of the U.S.'s 173 million strong workforce. The hike comes as the Social Security Administration will also be tacking a 0.3 cost-of-living adjustment on top of beneficiaries' checks next year.

Next week: Jack Ass of the Month.

Until Next Time, Adios.

Claremont, CA

October 21, 2016

#VII-20-322

CARTOON OF THE WEEK – Paul Noth, The New Yorker