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Second National Latino Credit Union Conference

Remarks as prepared for delivery
by Secretary Mel Martinez

San Diego, California
Friday, April 12, 2002

Good morning. I appreciate your warm welcome, and Clifford's very generous introduction. Thank you, Clifford, and thank you for your leadership of the Federation. I am honored by the invitation to join all of you here at this important conference.

I also want to acknowledge Dennis Dollar. After several years of tireless service on its Board, Chairman Dollar was appointed by President Bush last September to head up the National Credit Union Administration. Thank you very much for being here.

By bringing together credit unions united behind the goal of service to the Latino community, the National Federation of Community Development Credit Unions has created a unique forum. The strategies that you develop and exchange here have the potential to benefit communities across the country. Thank you to the Federation for sponsoring this conference. As HUD Secretary, I appreciate your focus on Latino housing initiatives and financial literacy.

I understand that I am the first Cabinet Secretary to address such a gathering. Your invitation - and my acceptance - says something powerful about the growing importance of the Latino community.

As our population grows, so does our influence on American culture and our impact on the economy. President Bush recognizes this. Every department in his Administration is focused on giving Latinos new opportunities to achieve success for themselves and their families.

I will make a bet that while I may be the first member of the Cabinet to visit with you, I will not be the last.

This is a remarkable and challenging time in our country.

We find ourselves in the middle of a war that we did not ask for, but a war that we are committed to winning. And through the firm and principled leadership of President Bush, we will. The turmoil in the Middle East only complicates an already difficult situation, and we hope Secretary Powell will succeed in his mission.

Above all, the President is doing everything he can to keep Americans safe at home. The new Office of Homeland Security is coordinating the efforts of federal, state, and local governments in defending against attacks. Our work together at all levels of government and volunteers will make our country safer every day.

The President recently traveled to Mexico, Peru, and El Salvador to discuss the war with our allies in the anti-terror coalition. Because our nations have so much in common, the discussions went beyond the warfront and touched on many of the interests and concerns we share.

In Mexico, President Bush and President Fox talked specifically about the importance of modernizing our border. We need to make sure that the legal commerce that passes between our two nations continues. And we need to make it easier for families to cross the border when they go to visit one another.

President Bush considers our neighbor to the south to be a good friend, and the relationship between our two countries is built on the idea that prosperity on one side of the border encourages prosperity on the other. The warm, personal relationship between President Bush and President Fox will pay dividends for both countries.

The discussions in Peru centered on illegal drugs - how to choke off the supply in Peru and how to curb the demand in the U.S.

In El Salvador, the leaders talked about promoting free and fair trade between our countries. They also discussed El Salvador's recovery from the damage caused by a pair of severe earthquakes last year. President Bush sent me last June to see the damage and report back on the relief effort.

The United States has already contributed millions of dollars to El Salvador's reconstruction effort. And we will spend even more this year.

While the President's work here at home touches every American, many of the accomplishments of the past 15 months have special significance to Latino families.

The President's education legislation will help our children get better grades by boosting funds for disadvantaged students. The President's tax cut is keeping more dollars in the family bank account. His plan to explore a free trade agreement with the countries of Central America will encourage additional trade and investment in the Western Hemisphere.

I am proud to serve a President who has such a great appreciation for the Latino culture and the contributions we make to American society. This is reflected in the diversity of his Administration, which features many Latinos in high-ranking, policymaking positions, like U.S. Treasurer Rosario Marin and Hector Barreto, who heads the Small Business Administration - both Californians and both great people.

The President has set some clear priorities, and two of the most important ones have passed the House but are blocked in the Senate.

The first is an important provision in the border security bill that would extend the window during which qualified immigrants can obtain legal residence in the U.S. - without first being forced to leave the country and their families. This is the 245(i) provision.

The Mexican government considers this legislation a top priority, and the Administration believes government policies should help to strengthen families, which this provision would clearly do. You should encourage the leadership of the Senate to move this important legislation.

We are also disappointed that the Senate is holding one of the President's judicial nominees hostage, and is refusing to even grant him a hearing.

Miguel Estrada is an immigrant from Honduras who taught himself English and worked his way up to become a lawyer serving in the first Bush Administration and Clinton Administration as assistant to the U.S. solicitor general.

President Bush announced a year ago that this very distinguished and qualified lawyer would be his nominee to the U.S. Circuit Court of Appeals for the District of Columbia. Even though Mr. Estrada would become the first Hispanic ever to serve on the Circuit Court for the District of Columbia - and be well positioned to become the first Hispanic ever appointed to the U.S. Supreme Court - Senate Democrats are blocking his groundbreaking nomination from moving forward, and I think that is wrong!

Mr. Estrada deserves a hearing and a vote, and we need to deliver that message to the Senate.

Another of the President's priorities - and a top priority for me at HUD - is to help more Latino families achieve the American Dream of homeownership.

The idea of homeownership as a key to strong communities and a strong nation is not new. The lure of a plot of land and home of one's own has drawn immigrants to America for hundreds of years.

The Latino population in the U.S. has grown to 35 million; this is a remarkable 58 percent increase over the past decade. Even so, not enough Latinos own their own homes. In 2000, just over 47 percent of Latinos were homeowners, and while that is a record, it is still more than 20 percentage points below the U.S. average. We obviously have a long way to go. But because the President and I believe so firmly in the transforming power of homeownership, we are committed to closing the gap.

Having a roof overhead is important, but the benefits of homeownership go much deeper than that:

  • Homeownership gives families the freedom to make their own decisions about their living situations. It provides financial security in the form of an asset that can be passed from one generation to the next.
  • Homeownership promotes civil responsibility. A homeowner has a vested interest in keeping up the neighborhood, and because they care about their community, they vote and volunteer more often.
  • Homeownership helps to keep the nuclear family intact. The children of homeowners are more likely to have the stability to help them stay in school and out of trouble.
  • And a nation focused on homeownership enjoys the many economic benefits created by a strong housing market.

The Administration plan for increasing the number of homeowners and encouraging more Americans to enjoy its many benefits has five basic steps.

First… We are working to open the doors of homeownership to more minorities by helping them overcome one of the biggest hurdles: the down payment. Each year under the President's budget, the American Dream Downpayment Fund will help 40,000 first-time, low-income homebuyers achieve a home of their own.

Second… The HUD program that supports organizations like Habitat for Humanity has made homeownership a reality for thousands of families. We are tripling funding next year to $65 million. These dollars will support the construction of some 3,800 homes for low-income Americans.

Third… Another initiative that we are excited about helps low-income families make the move from Section 8 housing to homeownership by allowing them to put up to a year's worth of their rental vouchers toward a home down payment.

Fourth… The key to successful homebuying is full disclosure of all settlement costs, up front, before homebuyers have to pay anything to a broker or lender. I have undertaken comprehensive reform of the Real Estate Settlement Procedures Act. My goal is to improve the mortgage process so that consumers get simpler, clearer, and earlier disclosure - and have the opportunity to shop for the best mortgage to meet their needs, at a lower cost.

I have been pleased by the lending industry's response. Some mortgage bankers voluntarily began offering full disclosure as soon as we announced our plans, without waiting for us to finalize the new requirements.

And fifth… The increase in sub-prime loans - and the corresponding rise in cases of predatory lending - have made financial literacy more important than ever.

Armed with the facts, an educated consumer is far less likely to be victimized by the predatory lending practices that involve only a small percentage of lenders, but are so harmful to the dreams of poor families. This is especially important for Latino house hunters; studies show that Latinos who do not understand the process, or have difficulty with the language, are more likely to have problems in becoming a homeowner.

We think housing counseling is an invaluable tool for prospective homebuyers. We plan to make it a separate program and boost its funding to $35 million, a $15 million increase over last year.

Through these five steps and other ongoing projects, I am certain that we will make it easier, and less expensive, for Latino families to move into homes of their own.

I want to talk about the role of credit unions, because the Administration's success in raising the homeownership rate among Latinos depends on a family's access to credit.

Today, more than 10,000 credit unions serve 81 million people in this country. In the Latino community, where so many people do not have access to traditional means of credit, credit unions are critically important. Through you, people have the opportunity to build wealth, create savings, and take advantage of services they might otherwise miss out on.

You may have read the recent Wall Street Journal article about Fernando Rosales. He is the Huntington Park, California, businessman who makes his money dispensing legal and financial advice to immigrants, even though he is not a lawyer or a financial professional. While his customers might be better served by going to a lawyer or their credit union instead, Mr. Rosales and other similar one-stop-shops in Latino neighborhoods do brisk business because they are trusted in a way that the professionals are not.

When my father first came to this country, I remember that he refused to open a bank account. He simply did not trust the banks. His distrust became my burden, since every month, I was the one who had to drive to each of the utility offices, one after the other, and pay our bills - in cash. This went on until I realized that all of this time spent driving was cutting into my social life, and I finally told my father, "No mas."

Many Latinos who do not feel comfortable doing business with a bank are more at ease with a credit union, however. The rise in the number of credit unions specifically seeking out Latino customers is helping.

The work of community development credit unions is especially important. By reaching into minority areas and helping the underserved find affordable credit, you serve a critical function in supporting minority homeownership. Your work is helping to make low-income and minority communities better places to live and raise a family. And I want to commend you for all of your efforts to help a vulnerable population avoid predatory lending.

I am proud to announce that we are taking action today to expand the partnership between HUD and the credit unions that support this nation's low-income and minority communities.

HUD is signing an agreement with the National Federation of Community Development Credit Unions that says we believe strongly in your mission, and that by working closely together, we can encourage, inspire, and bring new opportunities to America's underserved communities.

As partners, we will boost minority homeownership. We will encourage and extend the reach of faith-based social service providers who do so much good in our communities. We will combat predatory lending. And we will work to bring new financial services to residents of the colonias.

One specific area this agreement will address is the cost for workers in the U.S. to send funds - remittances - back to Mexico. President Bush and President Fox have discussed this issue and agree that it is important to reduce the transaction costs that are significantly lowering the value of remittances to Mexico. We greatly appreciate the assistance of the Federation in helping to address this important issue.

The agreement we sign today represents a wonderful opportunity for HUD to help America's community development credit unions serve more people. I look forward to seeing what we can accomplish together.

I mentioned the colonias. I would like to describe some of what HUD is doing to improve the lives of the millions who make their homes along the U.S./Mexico border.

In HUD's budget for the next fiscal year, I have proposed dedicating $16 million to establish a Colonias Gateway Initiative. Through this new Gateway, we will fund a regional non-profit organization to meet locally identified needs and help colonias residents access affordable housing, develop the job skills needed to attract high-skills employment, and create micro-lending and other economic development projects. Because many residents are immigrants and unaware of their rights under the Fair Housing Act, we will also target funds to agencies that work to combat housing discrimination.

The Gateway will complement the Colonias Task Force I created last year to make HUD programs work better in the border region. I want to stress that the Gateway will make HUD a partner with the local folks who really know what is happening in the border communities.

My Deputy Assistant Secretary, Anna Maria Farias, will be participating in a panel discussion later. She is anxious to share with you more details about our work in the colonias.

From the growing number of Latino-run businesses, to the popularity of Latino-themed newspapers, magazines, and television shows, to the increased involvement by Latinos in the political process, we have a profound influence today in American society. And this has given us new opportunities to make our families and communities stronger than ever before.

By supporting and encouraging economic development that produces good homes and good jobs, you - the credit unions that serve the Latino community - play a key role in turning these opportunities into success stories.

And HUD has a critical role in revitalizing troubled neighborhoods, by supporting the development of affordable homes and pursuing public-private partnerships that create economic opportunities for more Americans.

Together, we can help to inspire a new era of prosperity for Latinos in this nation.

As men and women whose mission is to provide credit to America's fastest growing, often underserved communities, you make a difference for Latino families. Continue your good work. HUD is pleased to work in partnership with you.

Muchas gracias por su invitación para reunirme con ustedes el día de hoy. Les agradezco mucho, el servicio que brindan a la comunidad Latina y espero tener la oportunidad de que nos podamos reunir nuevamente.

Content Archived: March 16, 2010

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