[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]



 
                   FINANCIAL LITERACY AND EDUCATION:

                   THE EFFECTIVENESS OF GOVERNMENTAL

                     AND PRIVATE SECTOR INITIATIVES

=======================================================================


                                HEARING

                               BEFORE THE

                    COMMITTEE ON FINANCIAL SERVICES

                     U.S. HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             SECOND SESSION

                               ----------                              

                             APRIL 15, 2008

                               ----------                              

       Printed for the use of the Committee on Financial Services

                           Serial No. 110-105



                     U.S. GOVERNMENT PRINTING OFFICE

42-717 PDF                 WASHINGTON DC:  2008
---------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office  Internet: bookstore.gpo.gov Phone: toll free (866)512-1800
DC area (202)512-1800  Fax: (202) 512-2250 Mail Stop SSOP, 
Washington, DC 20402-0001



                 HOUSE COMMITTEE ON FINANCIAL SERVICES

                 BARNEY FRANK, Massachusetts, Chairman

PAUL E. KANJORSKI, Pennsylvania      SPENCER BACHUS, Alabama
MAXINE WATERS, California            DEBORAH PRYCE, Ohio
CAROLYN B. MALONEY, New York         MICHAEL N. CASTLE, Delaware
LUIS V. GUTIERREZ, Illinois          PETER T. KING, New York
NYDIA M. VELAZQUEZ, New York         EDWARD R. ROYCE, California
MELVIN L. WATT, North Carolina       FRANK D. LUCAS, Oklahoma
GARY L. ACKERMAN, New York           RON PAUL, Texas
BRAD SHERMAN, California             STEVEN C. LaTOURETTE, Ohio
GREGORY W. MEEKS, New York           DONALD A. MANZULLO, Illinois
DENNIS MOORE, Kansas                 WALTER B. JONES, Jr., North 
MICHAEL E. CAPUANO, Massachusetts        Carolina
RUBEN HINOJOSA, Texas                JUDY BIGGERT, Illinois
WM. LACY CLAY, Missouri              CHRISTOPHER SHAYS, Connecticut
CAROLYN McCARTHY, New York           GARY G. MILLER, California
JOE BACA, California                 SHELLEY MOORE CAPITO, West 
STEPHEN F. LYNCH, Massachusetts          Virginia
BRAD MILLER, North Carolina          TOM FEENEY, Florida
DAVID SCOTT, Georgia                 JEB HENSARLING, Texas
AL GREEN, Texas                      SCOTT GARRETT, New Jersey
EMANUEL CLEAVER, Missouri            GINNY BROWN-WAITE, Florida
MELISSA L. BEAN, Illinois            J. GRESHAM BARRETT, South Carolina
GWEN MOORE, Wisconsin,               JIM GERLACH, Pennsylvania
LINCOLN DAVIS, Tennessee             STEVAN PEARCE, New Mexico
PAUL W. HODES, New Hampshire         RANDY NEUGEBAUER, Texas
KEITH ELLISON, Minnesota             TOM PRICE, Georgia
RON KLEIN, Florida                   GEOFF DAVIS, Kentucky
TIM MAHONEY, Florida                 PATRICK T. McHENRY, North Carolina
CHARLES WILSON, Ohio                 JOHN CAMPBELL, California
ED PERLMUTTER, Colorado              ADAM PUTNAM, Florida
CHRISTOPHER S. MURPHY, Connecticut   MICHELE BACHMANN, Minnesota
JOE DONNELLY, Indiana                PETER J. ROSKAM, Illinois
BILL FOSTER, Illinois                KENNY MARCHANT, Texas
ANDRE CARSON, Indiana                THADDEUS G. McCOTTER, Michigan
JACKIE SPEIER, California            KEVIN McCARTHY, California
DON CAZAYOUX, Louisiana              DEAN HELLER, Nevada
TRAVIS CHILDERS, Mississippi

        Jeanne M. Roslanowick, Staff Director and Chief Counsel


                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on:
    April 15, 2008...............................................     1
Appendix:
    April 15, 2008...............................................    61

                               WITNESSES
                        Tuesday, April 15, 2008

Bowdler, Janis, Associate Director, Wealth-Building Policy 
  Project, National Council of La Raza (NCLR)....................    43
Braunstein, Sandra F., Director, Division of Consumer and 
  Community Affairs, Board of Governors of the Federal Reserve 
  System.........................................................    16
Brobeck, Stephen, Executive Director, Consumer Federation of 
  America........................................................    42
Cabral, Hon. Anna Escobedo, Treasurer of the United States, U.S. 
  Department of the Treasury.....................................     8
Docking, Jill, President and Founder, Financial Fitness 
  Foundation.....................................................    40
Duvall, Dr. Robert, President and Chief Executive Officer, 
  National Council on Economic Education.........................    38
Frankfort, Phyllis, President and Chief Executive Officer, 
  Working in Support of Education (W!SE).........................    45
Johnson, Hon. JoAnn, Chairman, National Credit Union 
  Administration (NCUA)..........................................    11
Martin, Hon. Dean, Treasurer, State of Arizona...................    13
McConnell, Cassandra, Director, Consumer and Community Affairs, 
  Office of Thrift Supervision (OTS).............................    19
Mooney, Robert W., Deputy Director, Division of Supervision and 
  Consumer Protection, Federal Deposit Insurance Corporation 
  (FDIC).........................................................    18
Morial, Marc H., President and Chief Executive Officer, National 
  Urban League...................................................    39
Salisbury, Dallas L., Chairman, American Savings Education 
  Council; and President and CEO, the Employee Benefit Research 
  Institute......................................................    46
Wides, Barry R., Deputy Comptroller for Community Affairs, Office 
  of the Comptroller of the Currency (OCC).......................    20

                                APPENDIX

Prepared statements:
    Brown-Waite, Hon. Ginny......................................    62
    Carson, Hon. Andre...........................................    63
    Donnelly, Hon. Joe...........................................    64
    Hinojosa, Hon. Ruben.........................................    65
    Bowdler, Janis...............................................    67
    Braunstein, Sandra F.........................................    73
    Brobeck, Stephen.............................................    85
    Cabral, Hon. Anna Escobedo...................................    93
    Docking, Jill................................................   101
    Duvall, Robert...............................................   103
    Frankfort, Phyllis...........................................   110
    Johnson, Hon. JoAnn..........................................   115
    Martin, Hon. Dean............................................   134
    McConnell, Cassandra.........................................   143
    Mooney, Robert W.............................................   171
    Morial, Marc H...............................................   189
    Salisbury, Dallas L..........................................   201
    Wides, Barry R...............................................   206

              Additional Material Submitted for the Record

Frank, Hon. Barney:
    Statement of the American Institute of Certified Public 
      Accountants and 360 Degrees of Financial Literacy..........   219
    Statement of Mellody Hobson, President, Ariel Capital 
      Management, LLC, and Chairman, Ariel Mutual Funds Board of 
      Trustees...................................................   233
    ``The Ariel-Schwab Black Paper: A Decade of Research on 
      African-American Wealth Building and Retirement Planning, 
      October 2007''.............................................   236
    Statement of the Credit Union National Association (CUNA)....   260
    Statement of the Financial Industry Regulatory Authority.....   265
    Letter from the National Association of Realtors.............   269
    National Council on Economic Education, ``Survey of the 
      States: Economic and Personal Finance Education in Our 
      Nation's Schools in 2007, A Report Card''..................   271
Hinojosa, Hon. Ruben:
    Statement of Marcia Z. Sullivan, on behalf of the Consumer 
      Bankers Association........................................   283
    Statement of Consumer Action.................................   288
    Press release from the Employee Benefit Research Institute 
      (EBRI).....................................................   294
    FDIC Press Releases..........................................   296
    Letter to Chairman Barney Frank and Ranking Member Spencer 
      Bachus from the National Association of Federal Credit 
      Unions (NAFCU).............................................   298
    Comments from the Networks Financial Institute (NFI).........   301
    GAO Report, ``Financial Literacy and Education Commission: 
      Further Progress Needed to Ensure an Effective National 
      Strategy,'' dated December 2006............................   304
    Statement of Arthur R. Connelly, on behalf of the American 
      Bankers Association........................................   358
    H. Res. 1079.................................................   392
    Statement of the American Financial Service Association 
      Education Foundation.......................................   397
    Statement of the North American Securities Administrators 
      Association................................................   402
    Letter from the National Youth Involvement Board.............   406
    Statement of Richard Woods, Senior Vice President, Corporate 
      Affairs, Capital One.......................................   407
    ``Financial Literacy and Education Commission, SAFE Report: 
      Strategy for Assuring Financial Empowerment''..............   410
    Press release from Charles Schwab Corporation................   430
Maloney, Hon. Carloyn:
    Responses to questions submitted to Hon. Anna Escobedo Cabral   440
    Responses to questions submitted to Phyllis Frankfort........   443


                   FINANCIAL LITERACY AND EDUCATION:

                   THE EFFECTIVENESS OF GOVERNMENTAL

                     AND PRIVATE SECTOR INITIATIVES

                              ----------                              


                        Tuesday, April 15, 2008

             U.S. House of Representatives,
                   Committee on Financial Services,
                                                   Washington, D.C.
    The committee met, pursuant to notice, at 10:02 a.m., in 
room 2128, Rayburn House Office Building, Hon. Barney Frank 
[chairman of the committee] presiding.
    Members present: Representatives Frank, Waters, Maloney, 
Velazquez, Watt, Sherman, Meeks, Moore, Hinojosa, Clay, Baca, 
Miller of North Carolina, Scott, Green, Cleaver, Klein, Foster; 
Castle, Manzullo, Biggert, Capito, Feeney, Hensarling, Garrett, 
and Heller.
    The Chairman. The hearing will come to order. This is one 
of those hearings that is more important than it is sexy. 
Financial literacy has been a cause that has been championed by 
many on this committee for some time.
    The gentlewoman from Illinois, Mrs. Biggert, has long been 
an advocate of it, as well as our colleague from Texas, Mr. 
Hinojosa, who will be joining us also. It was hard to get 
traction for public attention for a while, but we are now in a 
financial downturn in our economy in which a lack of financial 
literacy is a contributing factor. And so we hope now to use 
the attention we have gotten to engage people in this effort.
    I want to say as part of this that obviously there have 
been some criticisms made of some of our financial 
institutions. One of the best things that can be done both for 
the economy and from the standpoint of alleviating the economic 
difficulties of people in the lower economic sectors is to help 
them become customers of banks and credit unions. One of the 
things that we should be clear about is that people who stay 
outside the banking system pay a much higher set of transaction 
fees for some basic things than most of us in this room do. 
Check cashing fees, payday loans, high charges for the 
transmission of funds to relatives in another country--all of 
those are higher for people on the whole outside the banking 
system or the credit union system than they would be if they 
were in there.
    So, helping people understand the importance to them--take 
some of those seats there. You don't need to stand. There are 
some seats over there. If there are empty seats, you can sit in 
them. There are some seats over there, too.
    Helping people understand the importance to them of taking 
advantage of that set of financial institutions, and educating 
them onto some basics as to what they should and shouldn't do, 
these are very important things. So we are glad to have this 
hearing to focus attention on it. And if there are ideas about 
how we can further financial literacy, you have people very 
ready to act on it.
    As I said--we are joined now by the gentleman from Texas--
the gentleman from Texas and the gentlewoman from Illinois have 
been leaders in this effort, and I think it is now clear to the 
whole country how important that effort is. So, we welcome the 
witnesses. And the gentlewoman from Illinois is now recognized.
    Mrs. Biggert. Thank you, Mr. Chairman, and thank you for 
holding this hearing today on such an appropriate day--tax 
day--and during an appropriate month--April--which has for 
several years been recognized as National Financial Literacy 
Month.
    As the co-founder and co-chair of the House Financial and 
Economic Literacy Caucus with Congressman Hinojosa, I was very 
pleased when, in January, President Bush launched the 
President's Advisory Council on Financial Literacy. About 5 
years ago, in 2003, I actually introduced a bill, the SENTS 
Act, that is S-E-N-T-S Act, that would have established a 
commission like this one with a mission of coordinating both 
the private and the public sectors' financial literacy efforts. 
Unfortunately, the Senate would only agree to half of that 
idea, so thus was born the public sector Financial Literacy and 
Economic Commission, or FLEC.
    But we have frankly wanted a commission that would bring 
together the best of both worlds, both the private and public 
sectors, to attack this problem. It turns out that what was 
true in 2003 is still true today. Teaching financial literacy 
requires cooperation between government and industry. The 
government can't, and frankly shouldn't be, solving this 
problem on their own. And make no mistake, we have a problem. 
The savings rate is still hovering around zero; 10 million 
Americans are unbanked; and there were 2.2 million foreclosure 
filings in 2007. The front page of newspapers across the 
country proclaim that millions of Americans are losing their 
homes because they were not ready to be homeowners.
    Some of our financial challenges are a result of the 
slowing economy, but many of them are the direct result of 
families who don't have the knowledge and the tools they need 
to hold a mortgage or manage credit risk and savings. I think a 
good place to start would be what I call emergency response 
scenarios, or teachable moments. After the 2005 Gulf Coast 
hurricanes, I called on then-Treasury Secretary Snow to convene 
an emergency meeting of the FLEC to coordinate the financial 
recovery efforts of 20 Federal agencies. And when the mortgage 
crisis hit, many private sector organizations coordinated with 
the Treasury to set up the HOPE NOW initiative to help troubled 
homeowners keep their homes.
    These are commendable efforts, but I would argue that they 
could be implemented more often and with greater speed and 
greater effectiveness with a permanent public-private 
partnership as was envisioned in the 2003 legislation. Such an 
entity could quickly deploy financial literacy initiatives to 
help Americans make educated decisions about their finances.
    A longer-term goal that we need is that we need this 
public-private group to help direct the development of new, 
more effective methods of teaching sound money management 
skills to all age groups, from toddlers to seniors. And we need 
to encourage more States to integrate personal financial 
education into their K through 12 curriculum guidelines. With 
the right education, today's children will become tomorrow's 
smart investors, entrepreneurs, and business leaders.
    We also need to give Americans access to the tools they 
need to save and invest money. At the start of the 110th 
Congress, I introduced a bill called the 401 Kids Family 
Savings Act of 2007. This bill would allow parents and family 
members to set aside money in a child's account that will 
accumulate interest tax-free and can be used for college 
tuition, a first home, or even retirement if they keep it going 
that long.
    But this is only one idea. Once again this year, many ideas 
will be on display at the Financial and Economic Literacy 
Caucuses' Annual Financial Literacy Day Fair this April 28th. 
It's a great way to see what the various groups are doing, and 
I encourage everyone to attend. Americans are a diverse group 
and we all share some very basic financial needs. We need to be 
prepared for tuition costs, a mortgage, health care, and 
retirement. We need a financial cushion against unexpected 
challenges like the death of a family member, and we need the 
capital necessary for new entrepreneurs to launch the start-ups 
and open the small businesses that drive this economy. Every 
American should have the opportunity and the know-how to 
fulfill each of these goals.
    How can we better coordinate the public and private sector 
efforts? How can we help Americans to become more financially 
savvy? What works and what doesn't work? How do we reach 
Americans during those teachable moments following natural 
disasters, the classroom, at the workplace, or on tax day? Who 
should coordinate these efforts? How can we simplify, rebrand, 
and entice Americans to use existing private and tax-free 
Federal savings vehicles to invest and save for their future? 
These are all questions that I am confident that our witnesses 
today will address.
    What we really need are good, affordable ideas, and those 
rarely come from Congress. I hope that today's witnesses can 
shed some light on the subject and point us in the right 
direction. We need to get this right.
    Again, thank you for holding this hearing, and I yield 
back.
    The Chairman. Next, another leader in this effort to 
promote financial literacy, the gentleman from Texas, Mr. 
Hinojosa, at whose request this hearing has been held.
    Mr. Hinojosa. Thank you, Chairman Frank, and Ranking Member 
Bachus. I want to express my sincere appreciation for you 
holding this important and very timely hearing today on 
financial literacy.
    This committee has held two or three hearings on financial 
literacy in the past, and I look forward to working with the 
chairman on additional hearings on financial literacy either 
later this year or sometime in the 111th Congress.
    Throughout my political career, I have been dedicated to 
moving my constituents away from payday lenders, predatory 
lenders, and check cashers and into such mainstream financial 
entities as banks, credit unions, and other financial 
institutions. It is my hope that by moving them into the 
financial mainstream, my constituents and others in the United 
States will be able to open checking and savings accounts, 
establish credit, and eventually realize the American Dream of 
homeownership.
    One of the ways I work towards this goal is through 
financial literacy and encouraging a collaboration of the 
private and public sectors. Over the past 6 years, I have 
worked very closely with my good friend and colleague, 
Congresswoman Judy Biggert, to shed light on the need for 
improved financial literacy rates in the whole United States. 
In 2005, Congresswoman Biggert and I co-founded and currently 
co-chair the Financial and Economic Literacy Caucus. At 
present, we're proud that there are 79 Members of Congress who 
have joined and participate actively in this caucus.
    Establishing good spending and savings habits early on is 
crucial, which is why we need to work more closely with the 
Department of Education, with the Federal Government, and with 
States and localities to supply our students with teachers who 
can teach not only theoretical economics but also pragmatic 
financial literacy, such as how and why to open a checking 
account and/or a savings account, and how to pay bills on time, 
obtain a free copy of their credit report, and establish good 
financial planning habits.
    We also need a streamlined way to provide financial 
literacy education to adults. Chairman Frank, our government 
should lead by example. It should coordinate and communicate a 
unified message on financial literacy and help us establish a 
national strategy which, according to the GAO, the Financial 
Literacy Education Commission has failed to do.
    We should authorize and appropriate such funds as necessary 
to create a broad-based public awareness campaign. FLEC has 
failed to produce a multi-media campaign as required in Title 5 
of the FACT Act, despite having had 4 years to do so. I am 
proud that Texas is one of the few States that requires some 
form of financial literacy for graduation from high school as 
well as permits its residents to impose credit freezes.
    Mr. Chairman, I look forward to hearing from our witnesses 
here today and hope to coordinate and collaborate with them on 
financial literacy events and ideas in the future. At this 
point, I ask unanimous consent to enter into today's record the 
following documents which have been turned in by people who 
could not come and testify. They include--and I will read them 
all: A copy of Jump$tart's joint press release with Chairman 
Bernanke; a copy of Charles Schwab's Parents and Money Survey; 
the Executive Summary of the Employee Benefit Institute 
Retirement Confidence Survey; the testimony of the American 
Financial Service Association Education Foundation; the 
statement of Richard Woods of Capital One; the statement of 
Consumer Action; the comments from the Networks Financial 
Institute; the statement of the North American Securities 
Administrators Association; the statement of the Consumer 
Bankers Association; the statement of the National Association 
of Federal Credit Unions; the testimony of the American 
Institute of CPAs; the 2007 National Council of Economic 
Education Survey; the comments from the National Youth 
Involvement Board; the press releases from the FDIC; the GAO 
report on Financial Literacy and Education Committee; and 
finally, H. Res 1079, a resolution recognizing the goals and 
ideals of Financial Literacy Month.
    And with that, Mr. Chairman, I yield back.
    The Chairman. The gentleman from Texas.
    Mr. Hinojosa. Do I have unanimous consent to enter--
    The Chairman. Yes. Without objection, those items will be 
inserted into the record.
    Mr. Hinojosa. Thank you.
    Mr. Hensarling. Thank you, Mr. Chairman. And let me thank 
you for calling this hearing. I think it is a very, very 
important hearing that we are having today. And as we have 
spent a lot of time dealing with the subprime mortgage 
meltdown, I think we have all concluded there are a number of 
causes underlying the economic challenges our Nation faces, but 
at least one of the causes was that there were hundreds of 
thousands of people who entered into financial transactions 
that fundamentally they did not understand.
    Now in the time that I have served on this committee, all 
too often I feel that a number of my colleagues, when faced 
with such a situation, conclude that when there are economic 
transactions that they view as unwise for a consumer, or 
perhaps too complicated for a consumer to understand, that it 
is incumbent upon us to outlaw them. Now I hold personal 
freedom in higher esteem. I do not believe the answer is to 
take away the freedom and the economic freedoms of our fellow 
citizens but instead to help inform and educate them as to the 
nature of the transactions into which they enter.
    And so I have always been a huge advocate, and I thank the 
gentleman from Texas and the gentlelady from Illinois for their 
leadership on this issue, and I think that we need to search in 
this committee for different ways that we can be more effective 
in helping educate the American populace on the nature of the 
economic transactions into which they enter. We need effective 
disclosure, not necessarily voluminous disclosure, and we need 
to educate and inform, not to take away their personal freedom.
    So, I look forward to hearing from the witnesses, and I 
would note also that sometimes there are limited opportunities 
to truly work on a bipartisan basis in the committee, and I 
certainly believe and hope that this is one of those 
opportunities, and I hope it is an opportunity that we seize.
    Mr. Chairman, I yield back the balance of my time.
    The Chairman. The gentleman from Missouri.
    Mr. Cleaver. Mr. Chairman, I have a very short statement. 
I'm more interested in the responses from the panel. When you 
look at the fact that only 32 percent of parents have regular 
discussions about financial matters with their children, it 
suggests that we have a major problem. And added to the fact 
that the most--the wealthiest one percent of the U.S. 
population holds more wealth than the bottom 90 percent 
combined, and so the one percent probably would represent also 
the children who are aware of and involved with financial 
matters as children, and it ends up creating havoc in the 
homes.
    I had a young man who graduated from college and wanted to 
go into the rap world, which is fine. I'm not a rap person, but 
he wanted to go into the rap world. He went out and borrowed 
money from the Jo-Jo Finance Company and never even paid any 
attention to the fact that he was paying 21 percent interest, 
because he had no awareness of those kinds of matters.
    In my real life, I am a United Methodist pastor. Most 
people believe that the majority of divorces in the United 
States are caused by infidelity, but they are very, very wrong. 
The overwhelming majority of divorces are caused by financial 
issues, 57 percent. And it is usually the people in the lower 
economic realm because they have no knowledge about financial 
matters. I am hoping that as we become ``dialogical'' today 
that some of you will have some offerings that would allow this 
committee to perhaps move in the direction of long-overdue 
financial literacy.
    Thank you, Mr. Chairman.
    The Chairman. The gentleman from New Jersey.
    Mr. Garrett. I thank the chairman. I thank the members of 
the panel as well for being here. If there is ever a time for 
the need for more financial literacy, it is today. I would like 
to commend the action of a whole host of organizations that are 
really trying to come to the point to address this. Back in my 
home district, you have local credit unions and what have you. 
They're out there doing the work of small bankers, and others 
in the banking institutions are trying to lend their hand as 
well. And one new one I just found out about 2 weeks ago, even 
collection agencies, who may be on the other side are actually 
opening up their offices and servicers as well to try to 
educate consumers in the future how they cannot get into that 
situation next time around.
    The flip side of all that, however, is we have to make sure 
that the Federal Government doesn't send any miscues to 
lenders--or to borrowers--in the future. Just three quick 
points. One, maybe we did that, maybe the Federal Government 
did that when we encouraged people to get engaged, involved 
with no downpayment homes--no downpayment loans on homes, when 
they really weren't in a situation to properly buy that house.
    Secondly, maybe we sent a miscue just earlier this year 
when we passed a stimulus package sending money back to people, 
$600, $1,000, what have you, and said go out and spend the 
money instead of paying off some of your debt or investing it.
    And thirdly, we might right now be sending a miscue to 
borrowers as far as their financial literacy with regard to 
other stimulus packages or bailout proposals which are 
basically saying to the people, if you were involved in risky 
behavior in the past, we might actually be rewarding that 
behavior by ``bailing you out,'' versus the guy on the other 
side of the street who was more risk-adverse and knew--had a 
little bit more information as far as financial literacy, did 
not engage in that, and we're really not going to be doing 
anything for you. We're just going to let you go your own way.
    So I think the Federal Government has some responsibility 
in all this as far as the miscues, and I would be curious to 
hear your comments on all of those points. Thank you so much 
for coming to this hearing today.
    The Chairman. The gentleman from New York.
    Mr. Meeks. Thank you, Mr. Chairman. Thank you for holding 
today's hearing on financial literacy and education, the 
effectiveness of government and private sector initiatives. I 
also want to thank my good friend, Ruben Hinojosa, for having 
this month dedicated as Financial Literacy Month. I think it's 
something that is bringing the awareness to all Americans and I 
thank Ruben for his vision to make sure that we bring and make 
financial literacy something that all are looking at.
    You know, when we look at since, you know, here we are in 
April 2008, we are in some of the most dramatic and challenging 
economic conditions than we have been in the last 35 years. We 
have an ever-growing number of economists who are saying and 
now fear that not only is our economy in the middle of a 
recession, but that recovery may be much longer than we expect. 
We don't know where the bottom is.
    You look at the toxic combination of tight credit, falling 
home prices, mounting losses for banks, high commodity prices--
oil recently hit an all-time high of $111.76--and a plunging 
consumer confidence level that has cut into consumer spending, 
has sent our Nation into a financial freefall, and we don't 
even know where the bottom is yet.
    One of the things we do know that got us here is that there 
have been individuals who signed documents and really didn't 
understand what they were signing. They looked at products and 
made decisions without really understanding why they are doing 
it. If in fact they were financially literate, if they 
understood the document, then they could understand the 
different products that were out there, and we may have been 
able to avert some of the problems that we currently face.
    The key is educating individuals. The key is trying to 
reach particularly young and old now, but I always have been 
trying to focus recently on a lot of the young in schools whose 
parents, as Mr. Cleaver indicated, you know, they may not have 
been financially literate themselves, coming from a different 
time. But they need their children at least to be able to 
understand and can help them.
    And so financial literacy is making sure, to me, for 
example, should be required in every school now. It should be 
just like mathematics and anything else. It should be a 
required course. Because I don't see how you can continue in 
the 21st Century without being financially literate. It's like 
not being able to read. People can take advantage of you when 
you don't understand. They can't take advantage of you when you 
do.
    And so I am--and I think that it's therefore important for 
us, those of us who are Members of Congress, those of us who 
are in the private sector, those of us who are in the not-for-
profit sector, to figure out how we can all work collectively 
together so that we can provide that kind of service, that kind 
of literacy, especially to our public schools, so that we can 
begin to educate our young people and they become financially 
literate. It is critical that we collaborate in this manner.
    So, Mr. Chairman, I thank you for this hearing. I look 
forward to hearing what the witnesses have to say and how they 
think that we should tackle this issue and how we can make sure 
that every child--whether they are rich or poor, black, brown, 
red, or yellow--has an opportunity to understand and become 
financially literate so they will not fall victim to some of 
the individuals that they have been utilized or predatory 
lenders have taken advantage of them, and we can possibly avoid 
the kind of financial disaster this country is currently facing 
today.
    Thank you, Mr. Chairman, and I yield back.
    The Chairman. Final statement, the gentleman from Texas, 
Mr. Green.
    Mr. Green. Thank you, Mr. Chairman. I especially thank you 
and Ranking Member Bachus. I think that this is a most 
necessary hearing. And I say so because not only must we 
concern ourselves with persons being able to understand that 
which is codified, but it's also equally as important that 
persons understand the process.
    I would like to just share this brief vignette to better 
explain. I happen to myself have purchased a home or two in my 
lifetime, and I did not know about the yield spread premium. 
Had I known about the yield spread premium, I suspect that I 
would have shopped around. But I went to the very first person 
who agreed to give me a loan at a certain interest rate, and I 
took it, because it seemed like a good deal and because it 
seemed like this person was on my side.
    I think that understanding the process, understanding that 
you need to get more than one opinion about your 
creditworthiness, is exceedingly important. And I think that 
financial literacy will not only help persons to understand 
that which they can read and comprehend, but also understand 
that this process entails more than visiting with one person 
who may give you one opinion about your creditworthiness.
    I am honored to be here today. I regret that I will have to 
leave because of pressing business elsewhere. But I assure you, 
I will be chronicling what is happening, and I thank you, Mr. 
Chairman. I yield back the balance of my time.
    The Chairman. Before proceeding with the panel, I want to 
ask unanimous consent to include in the record: Ariel Capital 
Management, the Ariel Schwab Blackpaper Decade of Research on 
African-American Wealth Building and Retirement Planning; a 
statement from the Credit Union National Association; a 
statement from the National Association of Federal Unions; a 
statement from the Financial Industry Regulatory Authority; and 
a statement from the National Association of Realtors.
    Without objection, they will all be included in the record.
    We will now begin the testimony with the Treasurer of the 
United States, representing the Department of the Treasury, 
Anna Escobedo Cabral. Treasurer Cabral.

 STATEMENT OF THE HONORABLE ANNA ESCOBEDO CABRAL, TREASURER OF 
       THE UNITED STATES, U.S. DEPARTMENT OF THE TREASURY

    Ms. Cabral. Good morning. Thank you, Chairman Frank. I 
appreciate the opportunity to be here before you today. I thank 
all the members of the committee who have joined us for this 
important hearing. I especially want to thank Congresswoman 
Biggert and Congressman Hinojosa for their work in creating the 
Economic Literacy Council or Caucus. It has, I think, been 
particularly important, and also for the work that you do in 
terms of organizing the fair every year, and for supporting 
Financial Literacy Month in April. Thank you to the House for 
also passing the resolution that did that very thing this 
April.
    The attention, of course, to financial literacy is very 
timely. Today, there are many Americans who are struggling. We 
have young adults who are struggling with debt, families who 
are struggling to understand the terms of their mortgages, and 
older Americans struggling with retirement issues. These are 
complex problems, and there are no simple solutions. Financial 
literacy will not cure all the problems that plague us, but a 
healthy dose may well be the preventive medicine that we need 
or that our Nation needs at this time.
    During my term in office as Treasurer, I have had the 
privilege of traveling across the country from the Bay Area to 
New York City, from El Paso to the far corners of Maine and all 
the cities and towns in between, spreading financial literacy 
and the message of its importance to community leaders, and 
State and local leaders, because of course, there is really no 
message perhaps that is more important to me as the daughter of 
farmworkers who struggled very hard to make a living and who 
lived in communities where being unbanked was very commonplace 
and where financial education often did not exist, it is a very 
personal issue for me.
    It is also, I have found, and I am very proud to say, an 
important issue for both the President and Secretary Paulson. 
They are equally committed to financial literacy. And what I 
would like to do is to spend a few minutes talking about the 
three ways in which the Department itself is addressing 
financial literacy. I would like to begin by describing some of 
the work, or at least acknowledging the work of the bureaus and 
offices that work in the Department of the Treasury, many of 
whom are actively engaged in a series of very specific 
programs, some of which we will hear from other witnesses about 
today.
    But most of the work at the Treasury Department is actually 
conducted in the area of financial literacy by the Office of 
Financial Education. It was established in 2002, and it has 
undertaken a tremendous outreach effort as a result. The staff 
has traveled to 47 States plus the District of Columbia and 
Puerto Rico. It has held 369 financial education sessions, 
reaching more than 30,000 people. The office produces and 
designates guidelines for quality financial education. It 
provides technical assistance to local programs. It forms 
partnerships with groups nationwide to connect them with 
resources, and it coordinates the activities across the Federal 
Government known of course as the Financial Literacy and 
Education Commission.
    The Commission is a very important way in which we do our 
work, the second topic for my comments this morning. An 
abundance of our efforts are through this Financial Literacy 
and Education Commission. This 20-agency entity, established by 
the Fair and Accurate Credit Transaction Act of 2003, gave the 
Commission and Treasury four mandates: A Web site; a hotline; a 
multimedia campaign; and a national strategy. I am pleased to 
provide some progress on where we are in each of those.
    To begin, concerning the Web site, in October 2004, the 
Commission did launch mymoney.gov, a Web site designed to be a 
one-stop shop for Federal financial education information. The 
Web site is available in both English and Spanish, and the Web 
site topics include paying for education, saving and investing, 
homeownership, privacy and frauds and scams, or how to avoid 
them.
    Most recently the Commission added a link explaining the 
economic stimulus payments, and on the front page we have 
features about how to avoid foreclosure rescue scams. The site 
has 402 links and has had more than two million hits over the 
course of its lifetime.
    The toll-free hotline was established in October of 2004. 
It is 1-888-MyMoney, and it is operated by the General Services 
Administration. It is also available in both English and 
Spanish, and it enables callers to order free MyMoney tool 
kits, which contain various documents available through the 
Federal Government in a collection that is free of charge. 
Since its launch in October 2004, the MyMoney hotline has 
received more than 20,200 calls.
    As regards the multimedia campaign, we are currently 
working with the Ad Council on the production of a campaign 
that will address the topic of credit literacy, emphasizing the 
impact of one's credit score. The project has progressed 
through the research, focus group, and creative stages and is 
now in production. We should see this campaign launched this 
summer, and it will feature television spots, radio spots, and 
a new Web site.
    The national strategy is the fourth topic I would like to 
report on. The FACT Act also required the Commission to develop 
a national strategy for financial literacy. In April of 2006, 
the Commission released, ``Taking Ownership of the Future: The 
National Strategy for Financial Literacy.'' The Strategy is a 
comprehensive blueprint for improving financial literacy in 
America. Approximately 7,600 copies of the Strategy have been 
distributed, and the Strategy has had 102,200--or 860 
downloads. So there is a significant amount of interest on the 
part of the Nation, and particularly the individuals working to 
lead programs dealing with financial literacy.
    The Strategy actually developed so that at the end of each 
chapter, there are numbered Calls to Action assigned to the 
Federal Government or to the private sector or to individuals. 
Since the launch of the Strategy 2 years ago, the Commission 
has been hard at work implementing those Calls to Action, which 
allow us to measure performance on many initiatives that would 
not be possible without the cooperation of all 20 member 
agencies. The progress on the Strategy's many Calls to Action 
can be found in my written testimony, which I hope will be 
included in the record, but are quite detailed.
    In addition, in December of 2006, the Government 
Accountability Office reported on the Commission's activities 
and made several recommendations. The Commission welcomed the 
insights of GAO on how we could better accomplish our important 
mission on behalf of the American people. The Commission 
incorporated many of the GAO recommendations into its 2007 
revisions to the Strategy, including definitions of financial 
education and financial literacy, the planning to conduct 
usability testing and to measure customer satisfaction with 
MyMoney.gov, and an independent review of the Federal financial 
education programs and resources, with the first series of 
assessments to be completed in 2009.
    In addition, the GAO recommended the Commission work 
closely with the private entities and State and local 
governments to improve financial literacy. In response, 
Treasury and the Office of Personnel Management co-hosted the 
Commission's inaugural meeting of the National Financial 
Education Network of Federal, State, and Local Governments at 
the Department of the Treasury. We continue to work to respond 
to the GAO recommendations.
    A third way that the Department has been working to improve 
financial literacy is to support the Financial Literacy 
Education Council created recently, the President's Advisory 
Council, by Executive Order on January 22, 2008. The Council, 
which was created to help America remain competitive and to 
assist the American people in understanding and addressing 
financial matters is comprised mostly of financial education 
leaders from the private sector and the nonprofit sectors, with 
one State government representative. We believe this advisory 
group, led by Chairman Charles Schwab, and Vice Chairman John 
Hope Bryant, will help increase the level of our Nation's 
resources dedicated to financial literacy.
    In conclusion, I hope this discussion has been useful in 
terms of an overview of the work of the Department of the 
Treasury. As Americans, we share the desire to provide for our 
families, to achieve financial security, and to have a 
comfortable retirement. Being financially literate makes those 
goals more attainable. The Department of the Treasury, 
Secretary Paulson, and the President are dedicated to 
increasing financial literacy among the American people so that 
they may lead better, more prosperous lives. Through our 
continued outreach and education effort, as well as through the 
ongoing work of both the Financial Literacy and Education 
Commission and the President's new Advisory Council on 
Financial Literacy, Treasury can help more Americans become 
financially literate.
    I look forward to the questions that follow the panelists' 
testimony. Thank you.
    [The prepared statement of Treasurer Cabral can be found on 
page 93 of the appendix.]
    The Chairman. Next, JoAnn Johnson, Chairman of the National 
Credit Union Administration. Ms. Johnson.

 STATEMENT OF THE HONORABLE JOANN JOHNSON, CHAIRMAN, NATIONAL 
               CREDIT UNION ADMINISTRATION (NCUA)

    Ms. Johnson. Thank you, Chairman Frank, for this 
opportunity to testify regarding the effectiveness of the 
public and private sector financial literacy efforts. I would 
like to commend the committee first of all for raising the 
awareness of this important topic, and I would especially like 
to acknowledge Congresswoman Biggert and Congressman Hinojosa's 
efforts for continuing to be champions of this cause.
    Financial literacy is an important facet of outreach 
efforts of both NCUA and the credit union industry. My 
testimony today will outline those efforts, plus NCUA's 
involvement on the Financial Literacy and Education Commission, 
with specific detail about my role as chairman of the 
MyMoney.gov Web site subcommittee.
    NCUA has a long history of providing financial education 
programs for use by credit unions and their members. From the 
1960's, when NCUA's predecessor regulator, the Bureau of 
Federal Credit Unions, provided low-income credit unions with a 
consumer education program called Project Moneywise, to the 
present, where NCUA training workshops routinely put financial 
literacy front and center in over 20 sessions annually.
    NCUA has placed a high priority on the value of basic, 
practical consumer financial education. Over the last decade, 
NCUA's Office of Small Credit Union Initiatives has provided 
financial literacy training to almost 2,000 credit union staff 
and volunteers attending these workshops. Other NCUA workshops 
have focused on topical financial education, such as 
homeownership education and retirement saving, VITA tax 
preparation, and the financial needs of military communities.
    Additionally, NCUA promotes financial literacy through the 
Financial Literacy Library located on our Web site. This 
consumer clearinghouse of information runs the gamut of 
personal finance topics from ID theft prevention to prudent use 
of credit cards to deposit insurance. Other governmental and 
private sector resources, such as FDIC's Consumer News and 
Jump$tart are also linked.
    NCUA is also using our congressionally appropriated 
revolving loan fund to provide financial assistance to low-
income credit unions as they promote financial education. Since 
2005, NCUA has awarded just over $500,000 in grants to credit 
unions specifically for financial education programs.
    Promotion of partnerships among credit unions and between 
credit unions and community and governmental organizations has 
also been a hallmark of NCUA's efforts. Again, communication 
and dissemination of information about opportunities have been 
the key to success. One high profile effort in which I have 
been personally engaged is Biz Kid$, a PBS series devoted 
exclusively to teaching young people about financial literacy. 
The credit union industry has underwritten this program, which 
is currently on air in 47 States.
    I was pleased to do a promotional video stressing the 
fundamental importance of financial education efforts directed 
at our Nation's youth. I am confident that these types of 
initiatives will pay big dividends in the form of financially 
literate young adults entering the marketplace. We can't 
continue to afford the alternative.
    Credit unions themselves are doing a good job of promoting 
financial education to their members. A 2006 NCUA survey of 
credit union activities showed that 60 percent offer financial 
counseling that specifically incorporates financial education. 
Forty-two percent have dedicated financial literacy programs 
for their members.
    My written statement details some of the best practices 
that we observe in the industry. Many have found the best 
teaching moment is at the point of delivery of services while 
applying for that first credit card, that car loan, or making 
the decision to purchase a home.
    I am also pleased to serve as chair of the MyMoney.gov Web 
site subcommittee, which is part of FLEC. This interactive Web 
site serves as a clearinghouse of information about Federal, 
State, and local financial education programs, grants, and 
materials, online calculators, and even a MyMoney 20 quiz 
designed to test a consumer's basic knowledge of finances.
    It's important to note that this site, which contains over 
400 links, doesn't allow any commercial content and is strictly 
for the benefit of consumers who want to increase their 
financial literacy. MyMoney.gov has received 2.3 million hits 
to its English and Spanish language sites since 2004 and has 
aided in the distribution of over 1.5 million publications to 
consumers. We are constantly engaged in enhancements to the 
site and its content, evidenced by the recent addition of a 
link to the HOPE NOW hotline to help consumers better respond 
to the housing crisis.
    I have testified to this committee before on the importance 
of financial literacy, and the central role that I believe it 
can and will play in the lives of consumers. Both President 
Bush and Congress have taken tangible steps to place financial 
education at the forefront of efforts to protect and empower 
consumers, and NCUA is working to do its part to make sure that 
credit unions are fully involved.
    The advertising slogan, ``An educated consumer is our best 
customer,'' is particularly apt for today's discussion. 
Americans need to be more aware of how their money works. And 
while financial literacy is not a panacea or a substitute for 
strong consumer protection, NCUA will continue advocacy of 
basic financial literacy as a way to help consumers help 
themselves.
    Thank you very much.
    [The prepared statement of Chairman Johnson can be found on 
page 115 of the appendix.]
    The Chairman. Next, we will hear from Dean Martin, the 
treasurer of the State of Arizona.
    Mr. Martin.

  STATEMENT OF THE HONORABLE DEAN MARTIN, TREASURER, STATE OF 
                            ARIZONA

    Mr. Martin. Thank you, Chairman Frank, Ranking Member 
Bachus, and members of the committee. I'm honored to appear 
before you today as State Treasurer of Arizona to discuss the 
importance of financial education and building a successful 
partnership between public and private sectors in advancing 
this cause.
    First, a little bit about my experience and background. I 
am a small business owner. I previously served as a State 
senator and was chairman of the Finance Committee, a senior 
member of Appropriations, and vice chairman of Judiciary. I was 
a founding board member for the Arizona chapter of the 
Jump$tart Coalition, a national financial literacy 
organization. I have volunteered my time to teach financial 
education classes in my community.
    I appear here today as an elected official, the State 
Treasurer of Arizona. However, as a citizen and a taxpayer, I 
have serious concerns regarding the state of financial literacy 
in America.
    The lack of financial literacy is a problem that spans 
every age group and every demographic. Our Nation is only as 
prosperous as our citizens. Our government relies on the 
solvency and prosperity of our taxpayers so that they can pay 
them. So it's fitting that we come before you today, April 
15th, tax day.
    As the son of a math teacher and as a small business owner, 
I learned the value of a dollar and how to manage it at a very 
early age. Unfortunately, not every American has the same 
opportunity. The current level of financial literacy in the 
United States is woeful. Why is an issue of education important 
to the Committee on Financial Services? Because it's 
fundamental to the very survival of the financial services 
industry.
    The current housing crisis and credit crunch has hit 
Arizona very hard. In 2005 and 2006, more than one-third of all 
mortgages that were issued were high rate or subprime loans. We 
are feeling the impact of this now as foreclosures continue to 
mount and tax revenues are plummeting. The slowdown is likely 
to continue for a while, as only half of the high-rate ARMs 
have reset, and the last will not begin to reset their rates 
until the first quarter of 2009.
    Our own State legislature and governor have failed to fix 
the largest budget shortfall in Arizona history, and the 
largest in the Nation by a percentage over 16 percent. As of 
today, we are a matter of days away from having spent all the 
money in the general fund from revenues we expect to receive 
this year. The State of Arizona may not be able to make its May 
15th payment to schools without some sort of action soon.
    Clearly, the need for financial literacy is heightened by 
this crisis.
    This morning, I want to provide you with a specific example 
of a need that is repeated again and again in many sectors, but 
in this case, it has global implications. In the Valley of the 
Sun, we are honored to have America's premier F-16 fighter 
training base, Luke Air Force Base. Airmen and women and their 
flight crews must be certified at Luke before they can be 
deployed to active duty.
    The base commander was concerned about the retention of new 
airmen. He was losing enlistees to high debt. Either they could 
not afford to continue in the service, or in some cases, their 
high debts made them a security risk. For many of these 
enlistees, it was the first time they had ever been away from 
home, and they were receiving the biggest paycheck of their 
young lives. The temptation to rush out and buy a new sports 
car was very great. Many of these young enlistees wind up 
overextending themselves and getting upside down in their 
loans.
    So should these airmen be prohibited from driving or owning 
sports cars? Sports cars are not inherently evil. They are 
simply products. The solution is not to ban the sports cars, 
because if it wasn't those cars, it would be motorcycles, 
stereo systems, or something else. The world is full of people 
who will gladly separate you from your money if you give them 
the chance.
    Rather than trying to manage the personal finances of every 
airman on his base through regulation, the base commander chose 
to treat the disease of financial literacy, not just the 
symptoms. He approached the local credit union on base, Credit 
Union West, for help. Highly specialized classes were developed 
specifically for the base to teach them how to manage their own 
personal finances. Just as you would not hand a new enlistee an 
M-4 rifle without training, the commander at Luke Air Force 
Base did not want to give one of his airmen a paycheck without 
training. Financial education had become a force readiness 
issue.
    The solution is for the consumer to be armed with 
information and financial education. As members of this 
committee, you are in many ways faced with the same dilemma the 
base commander was. Do you regulate and outlaw certain 
financial instruments or consumer products? Do you bar certain 
classes of people from mortgages or credit cards because they 
might misuse them? Do you outlaw certain types of investments 
because some investors are overleveraged themselves, which will 
ultimately limit the options of consumers? Or do you choose the 
more difficult, but ultimately more rewarding, path of 
emphasizing education before regulation?
    I think we know the answer by having this committee here 
today. The financial literacy industry--excuse me--the 
financial industry is willing to step forward and help with 
this cause. It's in their own best interest, in fact. They 
don't want to see their customers go bankrupt because they are 
the ones who don't get paid. Nearly every bank, credit union, 
and financial institution, as we've heard here today, has some 
sort of financial education program. Their goal is simple. They 
want their customers to be able to pay back their loans.
    The financial industry should be an ally in our cause. This 
year, Arizona hosted one of the most exciting Super Bowls in 
recent memory. As the excitement began to build in the 
community, we decided to creatively promote financial education 
by tying curriculum to the game. In this example, we at the 
Treasurer's Office successfully struck a public-private 
partnership that didn't cost Arizona taxpayers a dime with Visa 
and the NFL to produce the ``Financial Football'' game. This 
game poses a number of questions in an entertaining and 
exciting way so they learn financial literacy without realizing 
that they're being taught, and incorporates lessons taught 
through Visa's Practical Money Skills for Life program, a free, 
award-winning, teacher-tested and approved money management 
program. And as I am the son of a math teacher, with a sister 
who is a kindergarten teacher, they both said this was a great 
program and they really enjoyed playing it themselves.
    They also offer a cell phone download, which is a 
particularly effective way to reach the demographic of high 
school and college students and young adults, many of whom use 
their cell phones as their only form of communication.
    The Chairman. Mr. Martin, we will need you to wrap this up 
soon, please.
    Mr. Martin. Mr. Chairman, members, whenever there exists a 
disparity or inequity in understanding, there will be abuse. Do 
we blame the sports car and outlaw sports cars? Do we blame 
lenders and outlaw loans? This would mean leaving sports cars 
only to the rich and powerful; not a very American concept. Our 
Nation has always been successful because of capitalism, the 
freedom for people to take risks and be rewarded when they pay 
off, but also be responsible for their consequences. My fear is 
that during this crisis, Congress might try to regulate risk 
out of the system and limit financial services and instruments 
to the lowest common denominator of financial literacy. This 
approach would be quick to grab headlines, but would harm our 
global competitiveness as a nation.
    There are times when certain financial instruments make 
sense. Complex and exotic financial tools have their place. We 
should not dumb down our financial system. We should elevate 
the literacy of our citizens to match. Rather than regulating 
to the lowest common denominator, we should work to elevate the 
financial understanding of the public. In this way, Congress 
can help level the playing field by helping consumers recognize 
if the financial deal sounds too good to be true, it probably 
is.
    One of my greatest concerns for our Nation is the same one 
Thomas Jefferson had over 200 years ago. The accumulation of 
debt by our citizen's Federal and State governments--
    The Chairman. Finish the sentence, please.
    Mr. Martin. --puts our Nation at risk for being held as 
essentially slaves to foreign banks. We should not let that 
happen. We should not let our kids, our young adults, even our 
families put themselves in hock and their future in hock for a 
new sports car or iPod.
    Thank you.
    [The prepared statement of Mr. Martin can be found on page 
134 of the appendix.]
    The Chairman. Next, Ms. Sandra Braunstein, the Director of 
the Division of Consumer and Community Affairs at the Federal 
Reserve System.

   STATEMENT OF SANDRA F. BRAUNSTEIN, DIRECTOR, DIVISION OF 
   CONSUMER AND COMMUNITY AFFAIRS, BOARD OF GOVERNORS OF THE 
                     FEDERAL RESERVE SYSTEM

    Ms. Braunstein. Thank you. Good morning, Chairman Frank, 
and members of the committee. I appreciate the opportunity to 
discuss the importance of financial education. Current market 
conditions underscore how important well-informed, financially 
savvy consumers are for the financial wellbeing of individual 
households and the overall economy.
    Today's financial services industry is extremely diverse 
and complex. Consumers can choose among a wide variety of 
services, products, and providers when conducting financial 
transactions that were once primarily offered through 
depository institutions. Both advances in technology and new 
market players have dramatically changed how financial services 
are marketed, underwritten, and delivered.
    Increased diversity in credit products has also brought 
increased responsibilities and risks to consumers, which makes 
it critical that consumers are well informed about their 
personal financial circumstances and the range of available 
products.
    The level of competition and complexity in today's consumer 
financial marketplace highlights the need for effective 
financial education to help consumers evaluate and choose 
products that advance their financial wellbeing, not impede it.
    Designing and delivering effective financial education 
presents numerous challenges. Among the most significant is 
that financial counseling and education is very resource- and 
time-intensive because of the individual nature of personal 
finances and differing knowledge base of consumers. There is a 
very broad range of potential audiences, and their educational 
and informational needs vary greatly, a challenge that is 
compounded by the rapid development of products targeted to 
specific market segments.
    Financial education efforts may also be constrained by gaps 
in math and reading literacy, which impede the comprehension of 
fundamental financial concepts.
    Another challenge to delivering financial education is 
identifying the venue and delivery channels that facilitate 
consumers' participation in a program, as the demands of work 
and home often leave little time for training programs. 
Language and cultural differences can also present challenges 
in reaching consumers who can benefit from financial education, 
particularly immigrant communities.
    Ideally, financial counseling would be available to 
consumers near the time at which they are making an important 
financial decision, such as whether to buy a home. Accordingly, 
an important aspect of consumer education involves the 
provision of useful and comprehensive financial product 
disclosures.
    Over the last several years, the Board has engaged in 
extensive consumer testing of disclosures for privacy notices, 
credit cards, and mortgages in conjunction with our rule 
writing efforts for these products. The information we have 
gained from these sessions has helped us to better understand 
how consumers shop for financial products and services and what 
information they need to make decisions.
    The Federal Reserve has a long-standing commitment to 
providing information and education to help consumers make 
informed financial decisions. Financial educational products 
and programs are offered by the Board in each of the 12 
regional Federal Reserve banks. We provide a wide range of 
consumer education publications that offer consumers accurate 
and objective information about consumer financial products as 
well as their rights under consumer protection laws and 
regulations.
    We also commit resources to providing leadership and 
technical assistance to national and local financial education 
initiatives. Given the scarce resources available to conduct 
financial education, it is important to ensure that available 
resources are being used effectively. Accordingly, the Federal 
Reserve is committed to conducting and promoting research on 
the efficacy of financial education programs to help inform 
policy and program design.
    The Federal Reserve will continue to maintain its 
commitment to financial education. Financial education is 
essential to helping consumers make well-informed and 
beneficial decisions that enhance their financial positions and 
enhance efficiencies in the consumer financial marketplace.
    At the same time, it is important to recognize that 
financial education is not a panacea. There remains a need for 
effective regulation and enforcement that is responsive to 
market evolutions to ensure that consumers are protected 
against abusive and fraudulent practices by unscrupulous 
players.
    Thank you again for the opportunity to appear today, and I 
will be happy to answer any questions that the committee may 
have.
    [The prepared statement of Ms. Braunstein can be found on 
page 73 of the appendix.]
    The Chairman. Next, we have Robert Mooney, Deputy Director 
for Consumer Protection and Community Affairs at the FDIC.

  STATEMENT OF ROBERT W. MOONEY, DEPUTY DIRECTOR, DIVISION OF 
SUPERVISION AND CONSUMER PROTECTION, FEDERAL DEPOSIT INSURANCE 
                       CORPORATION (FDIC)

    Mr. Mooney. Chairman Frank, Congresswoman Biggert, and 
members of the committee, thank you for the opportunity to 
testify on behalf of the FDIC.
    Financial education is an essential tool for financial 
survival. Now more than ever, consumers need to know their 
rights and their options. The subprime mortgage crisis is a 
good example; informed borrowers might have fared better. At 
the same time, financial literacy alone is not the answer, and 
by no means should the lack of it be used to excuse 
irresponsible lending practices by lenders.
    In 2001, the FDIC launched ``Money Smart,'' an adult 
financial education program. Just yesterday, Chairman Bair 
announced that more than one million consumers have 
participated in an FDIC ``Money Smart'' program. This exceeds 
our goal, but we expect to reach many more. ``Money Smart'' is 
free, is not copyrighted, and is available in seven languages, 
in large print, and in Braille.
    ``Money Smart'' is up-to-date. Last year, we updated 
information on how to evaluate and compare mortgage products, 
especially subprime. And, yesterday, Chairman Bair also 
announced the release of the new ``Money Smart for Young 
Adults.'' This curriculum is tailored to high school and 
college level students ages 12 to 20. It is aligned with 
educational standards for all 50 States and the District of 
Columbia.
    Financial education works when participants practice what 
they have learned. Last year, we completed a major, multi-year 
study on the effectiveness of ``Money Smart.'' The goal was to 
measure, over time: first, whether trainees' knowledge 
improved; second, whether they intended to use the information; 
and, third, whether, months after the training, financial 
behaviors actually improved. This Gallup survey found that the 
training participants were more likely to open savings and 
checking accounts, save money, use a budget, and develop 
financial confidence.
    Hopefully, these results will motivate banks to offer more 
financial education, along with affordable financial and 
banking services. The FDIC creates opportunities for banks to 
do both. We have undertaken two major initiatives: the launch 
of the Alliance for Economic Inclusion in 10 communities across 
the country; and two major surveys to gather extensive data 
about the unbanked. The Alliance for Economic Inclusion is a 
network of broad-based coalitions of banks, community groups, 
and others, including agencies at this table, working across 
the country to expand access to basic financial services and 
financial education.
    More than 700 banks and organizations have joined these 
coalitions nationwide. In less than one year, 28,000 bank 
accounts were opened; 29,000 consumers received financial 
education; 41 banks offer affordable, small dollar loan 
programs; and 21 banks now offer remittance services. With 
regard to the surveys, in keeping with the Federal Deposit 
Insurance Reform Conforming Amendments Act of 2005, we have 
initiated biennial surveys of FDIC-insured institutions on 
their efforts to serve the unbanked. We also plan a household 
population survey on the subject with the U.S. Census.
    To conclude, consumers who know the right questions to ask 
will have the confidence to challenge products and practices 
too good to be true. The FDIC's 2007 Gallup survey shows 
programs like ``Money Smart'' can change the financial lives of 
consumers for the better. This concludes my testimony and I 
look forward to your questions.
    [The prepared statement of Mr. Mooney can be found on page 
171 of the appendix.]
    The Chairman. Thank you.
    Next, Cassandra McConnell, the Director of Consumer and 
Community Affairs in the Office of Thrift Supervision.

   STATEMENT OF CASSANDRA McCONNELL, DIRECTOR, CONSUMER AND 
     COMMUNITY AFFAIRS, OFFICE OF THRIFT SUPERVISION (OTS)

    Ms. McConnell. Good morning, Chairman Frank, and members of 
the committee. Thank you for the opportunity to testify during 
financial literacy month on the views of the Office of Thrift 
Supervision about the importance of financial literacy.
    Nothing can confirm the continuing and urgent need of 
financial literacy more strongly than the housing market 
turmoil currently facing this Nation and the role played by 
consumers in buying homes they cannot afford under terms they 
all too often did not understand. Although there is no 
substitute for prudent underwriting, enforcement of consumer 
protection laws, and effective disclosures, financial literacy 
is critical to a financial marketplace where consumers make 
informed decisions about their financial futures.
    Financial education about important issues such as home 
mortgages, family budgets, checking accounts, credit cards, and 
the value of savings should start in our schools, so the young 
adults entering the workforce and perhaps looking forward to 
the purchase of their first home will have the knowledge they 
need to make sound, financial decisions.
    Evidence just last week from the Jump$tart Coalition about 
following financial literacy scores by high school seniors 
shows that far more needs to be done to achieve this goal. As 
we know, the price of failure is the unwelcome prospect of 
significant harm to this country's economic wellbeing. The OTS 
strongly supports the work of the Financial Literacy and 
Education Commission, and think the strategies outlined by the 
Government Accountability Office to expand the work deserves 
continued focus.
    The OTS also recommends a study to explore ways to bring 
the most successful financial education programs to scale for a 
national impact on as many Americans as possible. At OTS, we 
have been expanding our financial literacy initiatives both on 
our own and in concert with other Federal banking agencies.
    We resumed publication last year of our community affairs 
newsletter, ``The Community Liaison,'' which covers consumer 
issues like how to avoid mortgage foreclosure prevention scams 
and how to take advantage of programs to help borrowers make 
their mortgage payments.
    The OTS is upgrading its electronic dissemination of 
consumer-related information through a redesigned, public Web 
site scheduled to launch this summer. The information for 
consumers will be featured prominently on the home page and 
offerings for consumers will be expanded and key information 
will be easier to find.
    The OTS also continues to encourage regulated institutions 
to develop cross-sector partnerships with community groups and 
consumer organizations to foster financial literacy. The OTS, 
like other banking agencies, provides favorable consideration 
under the Community Reinvestment Act for financial literacy 
programs such as credit counseling to low- and moderate-income 
families.
    We have also joined the other Federal banking agencies in 
producing important publications for consumers; for example, 
the agencies issued consumer illustrations for non-traditional 
mortgages in May of 2007, and are currently finalizing 
illustrations to help consumers understand adjustable rate 
mortgages and similar products.
    The OTS supports efforts to improve disclosures for 
consumers and appreciates the key role that private sector 
organizations play in offering financial literacy programs.
    Thank you again, Mr. Chairman, and I look forward to 
answering your questions.
    [The prepared statement of Ms. McConnell can be found on 
page 143 of the appendix.]
    The Chairman. Finally, we have Barry Wides, the Deputy 
Controller for Community Affairs at the Office of the 
Comptroller of the Currency.

  STATEMENT OF BARRY WIDES, DEPUTY COMPTROLLER FOR COMMUNITY 
    AFFAIRS, OFFICE OF THE COMPTROLLER OF THE CURRENCY (OCC)

    Mr. Wides. Chairman Frank, Congresswoman Biggert, and 
members of the committee, I appreciate the opportunity to 
testify today about the OCC's role in financial literacy and 
education efforts.
    My testimony discusses the many roles the OCC plays in 
promoting financial literacy. Financial literacy is a key 
component of ensuring fair and equal access to credit and 
banking services. Comptroller of the Currency John Dugan 
stressed the need to help National Bank customers become more 
engaged in sound, financial decisionmaking, since taking 
office.
    The OCC has done much in recent years to share financial 
knowledge and best practices, leverage resources, and build 
financial literacy partnerships. We concentrate our literacy 
activities in three main areas: building public awareness; 
encouraging the financial literacy efforts of national banks; 
and guiding Federal regulations and policies.
    Our public awareness efforts take several forms. 
Comptroller Dugan has taken the lead in highlighting this issue 
in speeches and keynote remarks during his visits around the 
country. OCC has mounted an extensive public service message 
campaign to local news media in English and Spanish, and we 
produce a range of consumer advisories that are easily 
accessible on the OCC's expanded consumer protection Web page.
    Last summer, the OCC launched, ``HelpWithMyBank.gov,'' a 
unique Web site that answers more than 250 common questions 
drawn from the actual experience of OCC's customer specialists. 
HelpWithMyBank.gov links Web visitors to other resources and 
allows customers to file complaints about national banks or 
request additional information online.
    The OCC's Community Affairs Department, which I direct, 
focuses on helping national banks become leaders in providing 
retail services to underserved communities and individuals. In 
addition to our headquarters staff, our community affairs 
officer teams around the country work with bank examiners in 
helping national banks to improve their financial literacy and 
outreach delivery programs. As a resource for our banks, we 
maintain an extensive library of financial literacy information 
on the OCC's Web site, and recent OCC publications target the 
needs of native Americans, small businesses, and the unbanked. 
The OCC also serves on the board of NeighborWorks America and 
participates on the Financial Literacy and Education 
Commission.
    We work regularly with these and other national and 
regional partners, many of whom are with us at today's hearing, 
to support financial literacy and education programs and to 
find the most effective methods for their delivery. These 
experiences give us valuable insight into the importance of 
financial literacy on good financial decisionmaking. Moreover, 
this knowledge helps us as Federal regulators in implementing 
the Community Reinvestment Act, which provides incentives for 
banks to undertake financial literacy activities.
    The OCC is currently working with the other Federal banking 
agencies to develop a narrowly defined change to the CRA 
regulations that would provide CRA credit for communities that 
are declining because of unprecedented levels of foreclosures 
and related economic factors. This has raised a related thought 
for consideration by the regulatory agencies; whether positive 
CRA consideration should also attach to financial literacy and 
education activities that benefit these same middle-income 
impacted areas and facilitate the short-term recovery.
    Given the rising need for financial counselors to assist 
borrowers who are having difficulty meeting their mortgage 
payments, additional CRA incentives may be helpful to encourage 
additional bank partnerships with nonprofit housing counseling 
organizations.
    Given the financial literacy challenges presented today, 
the time is right to bolster financial literacy for students, 
for working people, and for those facing retirement. We look 
forward to working with the other agencies on the Financial 
Literacy and Education Commission, the President's Council on 
Financial Literacy, the Financial Literacy and Economic Caucus 
here in this Congress, and your committee, to promote financial 
literacy and address the financial needs of all Americans. I 
appreciate the committee's time and look forward to answering 
your questions.
    [The prepared statement of Mr. Wides can be found on page 
206 of the appendix.]
    The Chairman. At the outset, I want to thank Ms. 
Braunstein, in particular, for stressing that this is not a 
replacement for sensible regulation. I think we all agree with 
that.
    Mr. Wides, I just have one question: Obviously, CRA is one 
of the ways in which we can do this, and I guess one of the 
questions is for the smaller banks that don't now have the 
service requirement. Does it make some sense to single this 
out, though, to make sure that banks would get CRA credit for 
this, even though they wouldn't generally be in the service 
category?
    Mr. Wides. Small community banks can get positive CRA 
consideration for financial literacy.
    The Chairman. Can or cannot?
    Mr. Wides. ``Can,'' on top of the requirements under the 
small bank test under CRA.
    The Chairman. All right. But then there is an issue, and it 
may be somewhat an inter-bank regulatory issue. It has been 
suggested to me by people who know that some OCC examiners have 
said that banks should not get CRA credit for using the FDIC 
``Money Smart'' materials because the banks neither prepared 
nor paid for those materials.
    Do you know if there is any validity to that? Maybe the 
FDIC knows? Is there a question about whether or not banks that 
use ``Money Smart'' are fully given CRA credit by the OCC?
    I was given a suggestion that there is some resistance on 
the part of some examiners.
    Mr. Wides. I am not aware of any OCC resistance in that 
regard. Banks can get CRA credit for their activities that 
benefit low- and moderate-income individuals and communities.
    The Chairman. So I can take it that you said there may have 
been a problem in the past, where there has been some question 
about whether using the ``Money Smart'' would allow you to get 
CRA credit, but you make sure that is not a problem anymore?
    Mr. Wides. No. That shouldn't be a problem if it is done in 
conjunction with the low- and moderate-income benefit test 
under the CRA rules.
    The Chairman. All right. I appreciate that and I would 
think that it is one of the things that could easily be cleared 
up.
    The gentlewoman from Illinois?
    Mrs. Biggert. Thank you, Mr. Chairman. I wanted to 
congratulate Mr. Martin for using football as a teachable 
moment to reach young people; and, I have to say that I have 
used www.practicalmoneyskills.com, and I actually have done 
that in a couple schools with Rex Grossman, who at the time was 
the most popular quarterback of the Bears, and done a 
competition between a couple of schools using that tool, and 
the kids just loved it. Of course, they loved Rex Grossman, so 
we had to let him win of course, but it was a really good 
opportunity.
    Let me just ask a general question. Should we in Congress 
restructure FLEC to include the private sector? Or, do you 
think that the Treasury and all of the agencies are doing 
enough that we don't need to include them. I will start with 
the Treasurer, please.
    Ms. Cabral. Well, I think you hit on an important point. 
Something that I have learned in the 18 years that I have been 
in Washington is that anything that involves or allows or 
builds on collaboration, I think, is much more successful. So 
to the extent that today we at least have a Financial Literacy 
Council that can work with the FLEC, we have a liaison between 
the two organizations.
    I think we are in a stronger position to really improve 
government, nonprofit, private sector, as well as State and 
local government's efforts in terms of really putting forth 
solid, financial education and initiatives, and helping reach 
people at those teachable moments that you have described. I 
think that there are certain things we can do to improve the 
efficiency and effectiveness of the FLEC, but I think that the 
Council is going to go a long way in terms of just being able 
to liaise between the two entities and provide a constant 
dialogue between those various working parts so that we are 
much more effective in the future.
    Mrs. Biggert. Chairman Johnson?
    Ms. Johnson. Collaboration is certainly an advantage and 
getting the ideas from both the public and private sector 
together to compare notes and to move forward, I think, is very 
beneficial. Cutler Dawson, who serves on the President's 
Advisory Council on Financial Literacy, is the liaison to FLEC 
and he is the CEO of Navy Federal Credit Union. And so we have 
this tie-in of getting the best of both worlds in that regard.
    We have encouraged credit unions to seek out the public 
sector as well, and in their partnerships and we as an agency 
have used some of those things and put the links on our Web 
site for some of the materials that we have. We look forward to 
continuing to do so.
    Mrs. Biggert. Okay. Thank you.
    Treasurer Martin, if you could just give a really brief 
answer, because I have another, really what I think is an 
important question, that I need to get to in time.
    Mr. Martin. Thank you.
    I agree completely. Adding a public-private partnership 
component would be very useful in the State of Arizona. We have 
no budget for financial education, so we could only do what we 
did with the private sector assisting. I would also recommend 
having a State connection as well, maybe State treasurer, State 
comptroller, State auditor as well.
    Mrs. Biggert. Thank you.
    Ms. Braunstein?
    Ms. Braunstein. Yes. We always encourage public/private 
partnerships and think that is very important; and, there are a 
number of ways to do that.
    One of the things, just to keep in mind if you move in that 
direction, is that the larger that FLEC gets, the more 
challenging it is to coordinate among the participants. I mean, 
as it is, there are 20 agencies on there and sometimes I think 
that has been a challenge to coordinate among the 20 agencies. 
When you start adding other people, it becomes more 
challenging. There may be other ways to cooperate other than 
adding more and more people to the commission itself.
    Mrs. Biggert. My time is getting short. I'm going to ask 
the other question, and that is, we see FLEC and all the ideas 
and programs within the Federal agencies, but also the private 
groups. Do you think we should test FLEC in putting together a 
national comprehensive director of all of the programs, because 
there are so many out there, and how to get everybody to know 
what they are.
    Mr. Mooney?
    Mr. Mooney. Well, I think the ``My Money'' Web site does a 
good job of providing that kind of information, but I would 
support your suggestion here. Anything we can do to make 
financial literacy more available would be a good idea.
    Mrs. Biggert. Ms. McConnell?
    Ms. McConnell. I think that there are three important 
components to promoting financial education: the public; the 
private; and the consumer; and, so any efforts that we can do 
to coordinate those three to get information out using those, 
the public, the private, and the consumer, can be advantaged to 
promote financial education.
    Mrs. Biggert. Thank you.
    Mr. Wides?
    Mr. Wides. I think a comprehensive directory would be a 
good initiative. I would be a bit concerned about the notion of 
a Federal endorsement of local initiatives and the notion of 
how to establish which of those are legitimate and good 
initiatives versus ones that are not. But, I think, as a 
general objective, it's a laudable objective to pursue.
    Mrs. Biggert. Okay, thank you.
    The Chairman. Ms. Waters?
    Ms. Waters. Thank you very much, Mr. Chairman, for holding 
this hearing.
    Financial literacy--we have been thinking a lot about what 
has happened that has caused the subprime crisis that we are in 
and we are discovering, or maybe some of us already knew, that 
many of the foreclosures that we are experiencing are 
foreclosures where our citizens did not understand what they 
were signing. They didn't understand the contract that they 
signed and they got involved with these adjustable rate 
mortgages that they didn't know were going to reset. They 
didn't really understand what they were getting involved in, 
and so I'm wondering what can really be done with financial 
literacy in general and mortgages in particular.
    Is there anyone on the panel who has been involved with 
helping to start bank accounts for seniors, for example, and 
then following through with the seniors on an ongoing basis 
about how they add to those accounts; teaching them how 
interest accrues on those accounts? Do you know of any 
organizations that has done that kind of thing?
    Ms. Johnson. Congresswoman, I know that there are a number 
of credit unions that have set up age-specific classes all the 
way from the young to include the seniors.
    Ms. Waters. No, specifically bank accounts or credit 
accounts, credit union accounts; because I have a feeling that 
it is one thing to teach people in a vacuum, but it is another 
thing to teach people who are dealing with real live issues, 
money, banking accounts, how to write a check, that kind of 
thing. Is anybody doing that?
    Mr. Mooney. The FDIC's Alliance for Economic Inclusion, now 
in 10 cities nationwide, does bring banks and nonprofits 
together to actually open accounts.
    Ms. Waters. What about high school seniors?
    Mr. Mooney. We just released our ``Money Smart for Young 
Adults'' program. High schools around the country were looking 
for a free financial education program that teachers could use. 
It is geared for high school and college students, and anyone 
else between the ages of 12 to 20.
    Ms. Waters. Okay. I would like to see exactly what is being 
done. I am only interested in programs where students actually 
open up checking accounts or bank accounts. I am not interested 
in the literature kind of in a vacuum.
    The other thing is, do you know of any programs that have 
set up second opinions on mortgages? For example, a homeowner 
buying a house may be involved in some kind of counseling 
program, but before they sign off, they have an opportunity to 
get a second opinion from qualified folks who could review the 
mortgage document. Is anybody doing that?
    Mr. Mooney. I don't know of anybody, offhand. We could look 
into it and get back to you.
    Ms. Waters. Well, the reason I ask these questions is 
because I have always had the feeling that it is very difficult 
to counsel and teach in a vacuum and that things don't really 
happen that way. That the real interaction that takes place is 
that which actually not only informs but equips our citizens to 
be able to manage money, to have the mortgage accounts, etc.
    And so as I look at what we are doing here to try and help 
with these foreclosures, I am interested in the kind of 
programs that will actually not just teach people in a vacuum, 
but be involved at the point that people are getting into these 
contracts.
    Yes, ma'am?
    Ms. Johnson. Yes, Congresswoman, we do have a number of 
credit unions that have actually set up student branches in the 
schools where the students are actually the tellers and I have 
visited both the local elementary school, which is close to our 
agency, and then Woodbridge High School in Virginia. And I have 
watched the students actually run the operation; of course, 
with guidance from credit union personnel who are with them.
    There are incentives for the students to open accounts, and 
then at least one day a week, sometimes more, there is a 
certain time set aside within the school day that the students 
come and make their deposits and get started on a savings 
program.
    Ms. Waters. All right. I would like to ask one more 
question before my time is up, and that is this: As we think 
about working with our homeowners who are about to experience 
foreclosure or have experienced foreclosure, what do you think 
about credit unions and community banks having a separate 
operation to do workouts and modifications interacting with the 
servicers who had the responsibility for the foreclosures.
    Don't you think that credit union personnel and our 
community bankers are better able to negotiate with these loan 
servicers than anybody else?
    Mr. Mooney. Yes. Congresswoman, the FDIC is about to 
sponsor several one-day forums where we are bringing community 
bankers and credit unions together with servicers and 
counselors. We will provide them with information and work with 
them to see how servicers might possibly step in and refinance 
some of these mortgages.
    We will be doing one in Los Angeles, one in Nevada, and 
probably one in Ohio.
    Ms. Waters. Not just for refinancing, but there should be a 
revenue stream for them doing this work. Small banks need that. 
I would like to see you on that and see what you are doing.
    Mr. Mooney. Yes.
    Ms. Waters. Thank you.
    The Chairman. Ms. Braunstein.
    Ms. Braunstein. I just wanted to say that we have been 
working through the reserve banks on a number of these issues. 
The Federal Reserve Bank of Boston has coordinated a number of 
banks up there that are working on loan modifications and they 
are mostly small community banks.
    We also, on your other question, we have initiatives going 
on in the reserve banks on the ground getting people accounts. 
There is an initiative in Atlanta, for instance, called ``Get 
Checking,'' where they actually try to take people who are 
unbanked and start relationships with financial institutions 
for them.
    The Chairman. Thank you.
    The gentlewoman from West Virginia.
    Mrs. Capito. Thank you, Mr. Chairman.
    I would like to thank the panel. I have a couple of 
questions really for whomever wants to jump in. In part of the 
briefing materials that we were provided, really a stark 
statistic is that the U.S. savings rate has hovered at or below 
one percent of disposable income; whereas, just in the 1980's 
and 1990's, it was between 7 and 8 percent.
    You know, trying to tie this to financial literacy, is 
there a tie between financial literacy and the willingness or 
the ability to save? And what are we doing to try to boost the 
savings rate?
    Mr. Mooney. Congresswoman, when we conducted an 
effectiveness survey of the ``Money Smart'' program, we found 
that when individuals went through the course, 7 out of 10 
saved more, and 43 percent who didn't have a savings or 
checking account opened one. It is very clear that type of 
financial education can work. We have also coupled that with 
financial inclusion activities such as our Alliance for 
Economic Inclusion.
    Banks can and do offer financial education as a means to 
encourage those who have been underserved to open savings and 
checking accounts.
    Mr. Martin. As experienced in the classroom, what I found 
is that today we have the availability in ease of credit to an 
extent you haven't had to the degree 20 years ago, and so what 
has happened is 20 years ago, if you were worried about having 
a flat tire or your refrigerator dying, you needed to have a 
savings account to cover that. People just say, I'll throw it 
on my credit card and worry about it later, and so a lot of 
that has to do with just the easy access to credit, which is in 
itself not necessarily a bad thing. It is when you only have 
that as your backstop and you have nothing else.
    Ms. Cabral. Just to mention a couple of programs that I 
think have been particularly successful, and one of them is, of 
course, the American Savings Education Council, launched with 
Treasury in April of 2007 a PSA campaign that was basically 
about choosing the same; and, I think that is critically 
important.
    The American Banker's Association hosts a series of 
workshops across the country with young children; because, I 
think the point is that we have to start younger. We certainly 
have to do a good job of educating and providing financial 
literacy and education tailored to every segment of society, 
because it is just as important to the elderly individual as it 
is to a young individual taking their job for the first time.
    But teaching children to save is particularly important, 
and so I think that has been a wonderful campaign that has made 
a difference, and I think everyone on this panel probably has 
participated in that campaign.
    Mrs. Capito. Well, I know in my State of West Virginia, we 
have a bank at school program. I think it's aimed at between 
fourth and fifth grade and I think it's been very successful.
    The other question I had requiring free credit reporting, 
access to free credit reports, has this been embraced? I mean, 
is it shown that now that you have this available, how many 
more people are actually getting their credit reports? Is it 
making people more aware? Is it leading to more financial 
literacy?
    What are the results of this free credit reporting 
requirement? Anybody? Yes?
    Mr. Martin. In my experience it has been great. It is 
probably the best thing that has come from Congress in this 
area that has actually been useful in the classroom. Just 
getting individuals to understand the real responsibility with 
credit and the implications of their own actions and the fact 
that waiting 30 days, because, you know, I just didn't feel 
like making my credit card payment, has long-term ramifications 
as to whether or not you can qualify for a house.
    Because what it has allowed us to do is make it personal as 
opposed to abstractly talking, we can say this is how this 
works, and you can pull up your own credit report and see how 
this applies. It really makes the teaching very personal and 
constructive right to their own situation.
    Mrs. Capito. Thank you.
    Oh, yes ma'am?
    Ms. Cabral. Well, just the last. The other thing that we 
were tasked with, FLEC itself, was to create a multi-media 
campaign. And the campaign, the emphasis of the campaign that 
we have been working on is about credit and managing credit 
wisely. That should be released and launched this August, as 
well. And, hopefully, it will contain television, radio, and 
various types of ads to reach people in as many ways as 
possible.
    Mrs. Capito. All right. Thank you. I yield back.
    Ms. Waters. [presiding] Thank you very much. Mr. Mel Watt, 
for 5 minutes.
    Mr. Watt. Madam Chairwoman, I think I will yield my time to 
Mr. Hinojosa who is the primary sponsor of this initiative and 
just express my support for financial literacy and thank the 
panel for being here.
    Ms. Waters. Thank you very much.
    Mr. Hinojosa.
    Mr. Hinojosa. Thank you, Congresswoman Waters. I appreciate 
that very much. I believe that the first question that I wish 
to ask would be directed to the Honorable Anna Escobedo Cabral, 
as well as to the Honorable JoAnn Johnson, and to Robert Mooney 
from the FDIC.
    The FACT Act required that FLEC establish a Web site, 
establish a 1-800 number, and provide information in both 
English and Spanish, which I requested with the help of 
Chairman Frank. FLEC was also tasked with developing a multi-
media financial literacy campaign. Yet, I find that FLEC has 
had 4 years to develop this campaign but has not done so.
    Why has it taken FLEC so long to produce a public service, 
multi-media campaign as authorized in the law, and why did FLEC 
inform my staff that they did not need the $2 million for a 
financial literacy campaign, as authorized in the FACT Act? I 
think that the information that I get from my staff is that it 
cost half-a-million dollars just to print the National Strategy 
on Financial Literacy and the remaining cash on hand is to be 
used for the campaign.
    So please tell me why--because I am upset that it has taken 
so long--that we find ourselves in the crisis that we are in.
    Treasurer Cabral?
    Ms. Cabral. Yes, Congressman Hinojosa, thank you.
    We have worked hard to make sure that the multi-media 
campaign is one that will be very effective and it has taken 
longer than we had hoped. We have gone through the research 
stages, several focus groups, and now we are in production. We 
do expect it to be available this August to be launched and we 
do think that it will be something you will be proud of when it 
is launched.
    We were able to set aside $750,000 to dedicate to this 
project from funding that we already had on-hand, and that is 
what we have been using to move it forward. We do believe that 
it will make a tremendous difference in terms of reaching 
individuals and helping them to understand the importance of 
managing credit well. And we hope that you will have a chance 
to look at it soon.
    If you'd like, we would be happy to bring some of the 
developed materials by for your staff and yourself to look 
through for your comments.
    Mr. Hinojosa. JoAnn?
    Ms. Johnson. Thank you.
    I'll limit my comments more to the ``MyMoney.gov'' Web 
site, because that is the subcommittee that I was appointed to 
about a year-and-a-half ago, so that is a little bit more in my 
area. I am not quite as familiar with the appropriations or the 
funding area. It has been a lot of hard work.
    I think for me, personally, the most difficult thing is 
getting people together. We meet quarterly for our FLEC 
committee as a whole; and, then, in the off-time, we meet by 
conference call primarily, but bringing ideas to the table, 
sorting through them, determining which ones we continue to 
pursue, I would admit it's just like the rest of government, I 
guess. It takes longer than what anyone anticipates or hopes 
for a project to be completed.
    I am pleased with the quality of the Web site and how we 
have monitored it and tried to come up with something that we 
can validate the information. I know one of the big questions 
was, where do we draw the line; what information comes on; how 
can we check it out; how do we validate; and so making those 
decisions, is it government only? Do you allow the private 
sector? Do you allow those who are companies for-profit? 
Because we have to determine that the information is accurate.
    So there was certainly more involved on the surface, but I 
think we do have a good project. For me, the most disappointing 
thing is that a public service announcement is not enough for 
people to even become aware of the Web site in order to use it.
    You don't have to reinvent the wheel. There are good 
materials there. We just need to get them in the hands of the 
user, and that's the most difficult thing. That's why I think 
it takes all of us working together to actually deliver it and 
get where the rubber meets the road.
    Mr. Hinojosa. Mr. Mooney.
    Mr. Mooney. Congressman, I defer to the Treasurer and her 
remarks concerning the media campaign. I will add to Chairman 
Johnson's remarks that the ``MyMoney'' Web site is really quite 
good. We chair, the FDIC chairs, the hotline subcommittee and 
several agencies are including information that is sent out to 
consumers who call for it.
    It is difficult, as Ms. Braunstein said, to organize 20 
different Federal agencies. Nevertheless, anything can be 
improved, any additional resources, I think, could be welcome, 
and perhaps we could coordinate something that would be more in 
line with what you would expect.
    Mr. Hinojosa. Well, I am very disappointed, because I come 
from the world of business. And every time we had a marketing 
plan, we expected to have returns and to monitor the results of 
the marketing plan. And after 4 years, the results are 
horrible. We are in a crisis.
    We believe that we are in a recession, even though some 
people would debate that statement. I believe, Mr. Mooney, that 
your group through the FDIC were working on that survey that 
you talked about with the students. When will you release the 
results of that national survey of banks' efforts to serve the 
unbanked adults?
    Mr. Mooney. Actually, we just mailed the survey out to 
banks yesterday. We will be reporting on a biennial basis to 
this committee, as well as to the Senate Banking Committee, 
under the Federal Deposit Insurance Reform and Conforming 
Amendments Act of 2005.
    We would be delighted as we get results to share those with 
your staff. We think through this survey, we will find a great 
deal of information about what banks are doing, as well as 
through our household survey with the U.S. Census, and find out 
why individuals either are or are not working with banks. We 
hope to get a great deal of detailed information on that. We 
would expect by the end of the year or after the first of the 
year we will have analyzed the results of the first survey.
    Mr. Hinojosa. If you say that you have just mailed it to 
the banks, what is a preview of that survey with regard to the 
many people who are limited English-speaking adults and in many 
cases don't trust banks because of experiences that they had in 
their motherlands?
    What is being done to address that concern?
    Mr. Mooney. Well, at the FDIC, we formed Alliances for 
Economic Inclusion in 10 cities. We have one in South Texas, a 
very successful, active one. Banks, nonprofits, and others have 
come together to address issues such as that. They are coming 
up with new products and new marketing materials in a way that 
can reach individuals who do not have English as a first 
language.
    Our financial education program, ``Money Smart,'' is 
available in seven different languages, including Braille. The 
group in Texas, largely thanks to your leadership, Congressman, 
regarding financial literacy, has been quite successful in 
reaching into the Latino community there, and in finding ways 
that new citizens and others might feel more comfortable 
working with banks.
    Mr. Hinojosa. I thank those of you who have helped us take 
financial literacy programs to the elementary schools and to 
the high schools. We have taken them to the community college 
at South Texas Community College and the last one was at the 
University of Texas, Pan American, which was very successful. 
But still, as a former businessman, I am very discouraged that 
the results that we have to show when we see the economy going 
into the tank, the results are just absolutely horrible.
    To the Treasurer, you spoke about the difficulty in working 
with such a large group, and Congresswoman Biggert and I talked 
about the need for the public and private sectors to work 
together: Do you all think that this group is just too big and 
unmanageable? Should it be made smaller so that it can move 
faster and get things done as we had expected when we passed 
this law?
    Ms. Cabral. Well, I think that all the voices on the FLEC 
commission are important and I think that some of the 
difficulty, perhaps, is just knowing how to get started. I was 
not part of the Administration when FLEC was created, but I 
think they have done a phenomenal job of really just beginning 
the conversation and setting out for themselves a shared set of 
goals and some plans of action.
    I think we have moved far enough along that you now can 
bring, I think, FLEC and the council that was recently created 
by the President, the Financial Literacy Council, together to 
really help one another. I think it was Ms. Braunstein who 
suggested that it might be too difficult to enlarge FLEC to 
then add additional outside entities, that is the private 
sector, State, and local government.
    But it is important to have that conversation among all of 
those players for us to be successful, so I think to the extent 
that we can liaise between the two organizations and continue 
the dialogue, I think we are all going to be much better off.
    Mr. Hinojosa. Please do not misunderstand me.
    I don't want to expand it. I want it to move. I want it to 
be an expedited effort for the implementation, because as we 
say, we are right on the brink of falling into the canyon, and, 
if you all don't find a way and recommend to Congress to 
expedite this, I think we are in for a deep recession if we 
don't find a way to correct this.
    I yield back.
    Ms. Waters. Thank you very much.
    Mr. Clay, for 5 minutes.
    Mr. Clay. Thank you, Madam Chairwoman, especially for 
holding this hearing today. And this question is for anyone on 
the panel who would like to address it.
    We all know that one of the contributing factors of the 
housing foreclosure crisis that we are currently in is 
inadequate financial literacy. We have had many programs 
created in the past few years to address this issue and have 
had some positive results, but not nearly the impact that was 
needed.
    We also know that housing and credit cards are not the only 
areas that need to be addressed today. How early do we need to 
start these financial literacy programs to get ahead of this 
lurking monster called debt?
    We see kids in high school with credit card debt and know 
that we have to start before that. What are the earliest ages 
that we can start teaching our children in schools and other 
formal settings about financial literacy, and at what ages does 
your research show that they are capable of understanding and 
retaining this knowledge? Anybody can take a stab at it.
    Yes, Ms. Johnson?
    Ms. Johnson. Sir, I have participated in financial reading 
classes at the 2nd and 3rd grade level that have gotten these 
kids started towards a savings account, especially when the 
credit union follows through then and has a student branch 
within the school.
    So the second and third grade level is certainly not too 
early to begin, and I agree with you that the sooner we get to 
them, the better.
    Mr. Mooney. Congressman, I would add, yesterday I was at 
the Hope Charter School and we talked a little bit about 
financial education with a classroom of 8- and 9-year-old 
students. They understood the importance of savings. Many of 
them had savings accounts and they were telling us why they had 
savings accounts. One wanted to go to college, one wanted to 
buy a BMW, one wanted to buy a laptop computer. But, the point 
is, they were saving for that, so it was very encouraging.
    We also think junior high, high school, is a perfect 
opportunity to do that. That's why we just released the ``Money 
Smart for Young Adults'' program.
    Mr. Clay. Thank you for that.
    Anyone else?
    Yes, sir, Mr. Martin.
    Mr. Martin. Thank you, Congressman.
    I think at any age you integrate it with the existing 
curriculum. I have been in kindergarten classes where they were 
teaching them how to count using money, fake bills, and the 
concept of how much money do I have left, and how do I know 
after I bought something what's left. And she was teaching them 
how to count by also teaching them the value of money at the 
same time.
    I don't think you can start too early, but you can't ever 
finish. It doesn't end when they graduate from high school or 
college. They're going to need it again, because this is 
something that if you don't use it on a regular basis, you lose 
it. And, frankly, not that many people buy houses every day, 
and so they need refresher courses.
    Mr. Clay. So we need to get them into the habit at an early 
age, and the earlier the better.
    Mr. Martin. Yes.
    Mr. Clay. Let me ask the entire panel again: The retirement 
of baby boomers is beginning to happen and many of them are 
inadequately prepared to financially handle retirement. Over 
the next few years, millions will retire and many of them have 
no idea of their total financial needs.
    How do we address this literacy shortage in the short term? 
In your experiences, are the adult literacy programs reaching 
those who are near retirement? Are they responding and seeking 
literacy about their immediate future? Are the numbers of 
programs that we have enough to reach the number of people who 
need this knowledge?
    Yes, ma'am?
    Ms. Braunstein. I know that we are always very concerned 
about that at the Federal Reserve, and one of the things that 
we do is offer a number of programs in the workplace to our 
employees on a number of specific issues, one of them being 
retirement.
    And one of the challenges with financial education, 
especially with adults, is that people are very busy and it's 
hard to get people to find the free time to attend classes, 
which is why if you can capture them in places like the 
workplace where they are, you have a much better chance of 
reaching them with information on this.
    Mr. Clay. Yes, sir?
    Mr. Mooney. Yesterday, we, the FDIC, signed a ``Money 
Smart'' partnership agreement with USOPM. They have 1,800 
benefit specialists who service two million Federal employees 
worldwide. We will be training those counselors in how to train 
using financial education and work better to utilize their 
benefits including retirement benefits.
    Mr. Clay. Thank you, Madam Chairwoman. Thank you for your 
indulgence.
    Ms. Waters. You are certainly welcome.
    Mr. Cleaver, for 5 minutes.
    Mr. Cleaver. Thank you, Madam Chairwoman. Thank you, Mr. 
Hinojosa.
    Our children's generation will be remembered by historians 
as the most indebted generation in the history of our planet, 
and they have been trained poorly because their parents and 
grandparents created a crisis by dealing with brokers they did 
not know, buying homes they could not afford, and signing 
contracts they did not understand.
    And so I applaud all of the efforts that are underway for 
financial literacy, but my concern is that no football coach 
would wait until the National Anthem to develop the game plan. 
No person would wait until a tooth is rotting before they 
visited a dentist. No nation would enter a war without first 
counting the troops. Well, that's a bad example.
    [Laughter]
    Mr. Cleaver. No long distance driver would wait until the 
middle of the trip to map out the route, and so what we are 
doing, even though I congratulate you and think it is good, is 
that we are waiting until the horse is out of the barn to do 
this.
    What I am wondering about is whether or not those of you 
here would support something that's a lot more specific, and by 
that I mean if we entered into a tri-party agreement, the GSEs, 
the financial services industry, and the Federal Government, 
and we picked 110 districts around the country, 2 in each of 
the States and the territories, and we create a pot of money 
for a 4-year program in each of those schools as a pilot with a 
goal of moving toward establishing a curriculum in high schools 
for all high schools around the country on financial literacy, 
where people can't even write a check.
    And so I think when we just say, well, you know, we have 
all these programs and we want you to take advantage of them, 
that may be good, and it's the best thing that we can do at 
this time. But I believe we ought to build it into the very 
fabric of education in this country so that everyone gets that 
exposure.
    What's wrong with that? Or your signals are that you all 
support it and I hope the press gets it down? Is everybody 
supportive of what I just said?
    Ms. Johnson. Sir?
    Mr. Cleaver. Ms. Johnson.
    Ms. Johnson. I think having financial education in the 
schools is certainly a great goal. I think there are eight 
States that now have some sort of curriculum, but we need to go 
beyond that. I know the institutions, the banks and the credit 
unions that are in those eight States, also see the need to 
reach beyond the school system we have at all age levels. So 
getting the school age is certainly a good thing, but we don't 
want to drop the other programs that are beyond that.
    Mr. Cleaver. Yes, I am not suggesting that we drop that. I 
hate Shakespeare. I hated it when I was in high school, but I 
can quote some Shakespeare just from being in the classroom. I 
didn't like Miss Holland who taught us and forced us to read 
that stuff, but I can quote Shakespeare sitting here right now, 
just because I was in the classroom. I'm not saying we 
eliminate all of that. I'm saying that we build it into the 
system that educates our children. We are doing a shotgun 
approach; some will be exposed and some won't.
    Why not make it a part of the curriculum in schools all 
around this country and its territories? We have a crisis. It's 
not going to get better.
    Mr. Mooney. Congressman, some school systems have, and we 
have found that teachers on their own have downloaded financial 
education programs, and worked them into their classes. So 
there's obviously a demand for this.
    Mr. Cleaver. Ye, and I am happy. Thank you. Sometimes I am 
inarticulate.
    What's wrong with trying to have that as a part of the 
curriculum in all of the school systems in the United States?
    Mr. Martin. I think that's a great idea. I think it needs 
to be integrated. The biggest problem I found, and we are 
actually having a conference in Arizona, the local coalition, 
half the course of the conference, is teaching personal finance 
to teachers.
    They never got this when they were going to school, and so 
they don't feel comfortable teaching it yet. And so I don't 
think you could make this as successful unless you also gave 
additional training to the teachers to make sure they 
understood the subject too, because they don't feel confident 
in many cases about that.
    Ms. Cabral. Congressman, to that end, I think FLEC and 
certainly the Department of the Treasury have been working hard 
to make sure we identify resources that make that possible for 
teachers in school districts that are interested. So not only 
are there curriculum that are readily available, but I think 
Mr. Martin's point is a really important one.
    You have to make sure the teacher is in a position to also 
teach these topics, and many times, they are uncomfortable. So 
we have identified, for example, the nominal programs that 
exist currently in some States where they teach teachers over 
the course of the summer and prepare them so that they could 
administrate these classes as the fall semester arises. So a 
lot of the work is going on now and I think it will continue to 
move forward.
    Ms. Waters. Your time has expired.
    Ms. Maloney, for 5 minutes.
    Mrs. Maloney. I thank the gentlewoman for yielding, and I 
applaud my colleagues for their interest in supporting 
financial literacy. I, for one, join my colleague in calling 
for having it be part of the national curriculum that we have 
in our schools and with the increased complexity and the number 
of financial products, the need to save as a country, we need 
greater financial literacy.
    I would first like to ask the Treasury Department, the 
Honorable Anna Escobedo Cabral, about--and I really first want 
to congratulate all of you for your efforts to increase 
financial literacy, and I know Treasury has some new programs.
    In January, I sent Treasury a letter about a constituent, 
the W!SE program, Working in Support of Education. W!SE has 
developed a curriculum and test that has a strong track record 
of success, and my concern with Treasury's new proposal is that 
it's just a test, as I understand it, without the backup 
curriculum, and would ultimately possibly undermine the efforts 
of programs like W!SE that have a strong curriculum. What are 
you doing to ensure that financial education programs like W!SE 
continue and are not undermined by a test-only approach?
    Ms. Cabral. Thank you, Congresswoman. W!SE is actually a 
phenomenally successful program, one that I certainly admire 
and respect personally. I have had the privilege of attending 
some of their certificate programs in New York City and I 
really do value their input. I think they are an incredibly 
important partner in this process.
    What has occurred is that Treasury, at the request of the 
President, came up with a series of ideas that were submitted 
to and approved by the President's Advisory Council on 
Financial Literacy, one of them being this concept or model of 
making a test available that would determine what you need to 
know to graduate from high school and demonstrate that you 
truly are financially literate.
    And the model is really something along the lines of what 
we've seen was very successful in the area of physical fitness, 
creating some sort of Presidential award, some recognition so 
that individuals who tested and demonstrated their capacity and 
their ability to really know the subject matter would be 
recognized for those efforts, to try and encourage more 
teachers across the school districts in the United States to 
make curriculum available and then to test and recognize 
excellence.
    W!SE is one of those programs that offers a particularly 
important component to that, and that is that they do have 
curriculum that makes a world of difference. There are a number 
of partners who have come together to give some advice to the 
Treasury Department about what would best serve or how we might 
best understand what a financially literate individual would 
have to prove. And that is in fact what we have done.
    We hired four economists who were outside of the government 
to come up with a test that we could use for this model. We 
have tested the test itself. We piloted the test, and it seems 
to be moving in the right direction. We hope to be able to 
launch this initiative in the next couple of weeks, and we hope 
that W!SE will continue to work with us to be a partner in 
terms of being able to administer curriculum that is critical 
to preparing students to pass those tests.
    Mrs. Maloney. I know that a number of financial 
institutions--I received a letter from Chase Manhattan, J.P. 
Morgan, Citibank, others--have financial literacy courses. They 
go into the schools. I know that Mrs. Siebert has come up with 
a curriculum that is in the New York City school system, yet 
we're seeing that it's not working. And I just want to cite 
that just last week the Jump$tart coalition released the 
findings of its most recent survey of high school students for 
the first time, and for the first time, college students and 
high school seniors today have less financial literacy than 
their counterparts 2 years ago.
    So all of this effort appears not to be working. The mean 
scores for the 2008 high school senior class was 48 percent, 
lower than for their 2006 peers, who answered 52 percent of the 
questions correctly. And scores for college students are higher 
at 62 percent, but still, 62 percent for financial literacy for 
college students is very, very low.
    Some have argued that if we had better literacy, possibly 
we would not have had this financial crisis that we are 
confronting with the subprime if there was a greater 
understanding of the products that people were buying into. I 
would just like to ask all the panelists and just go right down 
the line, do you think that financial literacy should be 
required curriculum in our high schools now?
    Ms. Cabral. I think that there are a number of States who 
have made a commitment to it, and it is a State-by-State 
decision at this point, and I respect the right of States to 
determine what their curriculum will look like.
    I think it's incredibly important for us to make sure that 
we start teaching children about financial literacy from the 
time that they enter kindergarten all the way through high 
school. And the goal of the test that I just described a few 
minutes ago is really to add to a curriculum that teachers 
would offer and then also guarantee that students had actually 
learned and that the behaviors had changed.
    Ms. Johnson. I would echo what the Treasurer has just said. 
And certainly those students who received the financial 
education classes and the exposure at an early age seem to do 
better. We need to change the mindset, particularly of these 
high school students and those heading off to college and the 
use of the credit card. No one would have thought 20 years ago 
about going to the bank to borrow money to get a Starbuck's 
coffee. That is the ease of the credit card and the dangers 
therein today, so I think the earlier the better.
    Mr. Martin. I also agree. I think it should be integrated, 
though, in the curriculum. Having a single, stand-alone class 
is not the same as having this integrated as part--we still 
need to learn how to count and do math and do history. It 
should be incorporated all the way throughout.
    I think you have a lot greater retention when people 
understand, because finance and economics has a lot of social 
implications as well. And I think if you tie those two 
together, you will have a lot greater retention by the students 
than you would with just one stand-alone class that they may or 
may not remember later in life.
    Ms. Braunstein. I agree that I think it would be a very 
worthwhile endeavor, and I also agree with Mr. Martin's remarks 
that I think that we find with students, as we do with 
children, as with adults, that they learn more if it's somehow 
put in context that they can understand. So if there's a way to 
tie it to other kinds of lessons or find teachable moments for 
kids, it would be much more effective.
    Mr. Mooney. Congresswoman, we have talked with teachers who 
on their own have tried to provide financial education, and 
they have gone to our Web site. They don't have the resources 
to even download the free program, so they have asked us to 
mail it to them. Chairman Bair has long been an advocate of 
incorporating financial education into schools, and we think it 
would be an excellent idea to work toward that end.
    Ms. McConnell. I think there are benefits to incorporating 
financial education into the schools, and I also think that we 
could yield additional benefits by finding ways to bring to 
scale the best practice programs so that we can have more 
benefits on a wider scale instead of school by school.
    Mr. Wides. We would agree with the Treasurer's remarks as 
well that integrating it into the curriculum is very important, 
but I also would point out there are a number of initiatives 
where financial institutions are working to bring hands-on 
exercises into the schools. At the Financial Literacy and 
Education Commission, we heard about the investment challenge, 
which brings in learning about the stock market. We talked 
earlier today about banks actually opening up branches in 
schools that are run by the students themselves. And I think we 
would also want to augment any activities like that with work 
to build this into the curriculum.
    Mrs. Maloney. Thank you.
    Ms. Waters. Thank you very much. The Chair notes that some 
members may have additional questions for this panel, which 
they may wish to submit in writing. Without objection, the 
hearing record will remain open for 90 days for members to 
submit written questions to these witnesses and to place their 
responses in the record.
    This panel is dismissed, and thank you very much for being 
here today.
    I would like to call up our second panel. Members of the 
second panel, please quickly take your seats at the table. We 
have a certain time that we have to be out of this room. Would 
you please clear both aisles and take your conversations 
outside of the room and let's get our panelists seated at the 
table.
    Thank you very much. I'm going to start by asking 
Congresswoman Maloney to please introduce one of our panelists 
from her area.
    Mrs. Maloney. I thank you, Madam Chairwoman, and I 
congratulate all of the panelists, and I have the great honor 
of having two panelists from the district that I represent, 
which is very interested in financial literacy.
    I would like to welcome Robert Duvall, president and CEO of 
the National Council on Economic Education, and also Phyllis 
Frankfort, whose program I have worked with over the years. She 
is the CEO and president of Working in Support of Education, or 
W!SE. W!SE is a nonprofit located in my district that has 
developed and operated a financial literacy certification 
program, and they started their program in New York City, but 
it has now expanded to 18 States for the 2008 academic year. I 
want to thank her for her work in this area, and Mr. Duvall, 
and for the honor of representing you. Thank you for being here 
today.
    Ms. Waters. Thank you very much. Mr. Moore, I understand 
you have someone you would like to introduce today?
    Mr. Moore. I do. Thank you, Madam Chairwoman. Jill Docking, 
a friend of mine, is by profession a stockbroker from Wichita, 
Kansas. She co-founded, or excuse me, she's a member of the 
Kansas Board of Regents appointed by Governor Sebelius in 2007, 
and most importantly this morning for the purposes of this 
hearing, she co-founded the Financial Fitness Foundation, a 
not-for-profit organization dedicated to teaching youth to make 
responsible financial choices for their future.
    So, I appreciate her being here and I thank you for the 
opportunity to introduced my friend.
    Ms. Waters. Thank you very much. I will now introduce the 
other members of the panel: Mr. Marc Morial, president and 
chief executive officer of the National Urban League, and 
former mayor of the City of New Orleans; Mr. Stephen Brobeck, 
executive director, Consumer Federation of America; Ms. Janis 
Bowdler, associate director for wealth building policy project 
for the National Council of La Raza; and Mr. Dallas Salisbury, 
president, American Savings Education Council, and chief 
executive officer, the Employee Benefit Research Institute.
    Thank you all for being here. Without objection, your 
written statements will be made a part of the record. You will 
each be recognized for a 5-minute summary of your testimony. I 
will start then with Mr. Robert Duvall.

   STATEMENT OF ROBERT DUVALL, PRESIDENT AND CHIEF EXECUTIVE 
        OFFICER, NATIONAL COUNCIL ON ECONOMIC EDUCATION

    Mr. Duvall. Thank you, Congresswoman Waters, for this 
opportunity. It is really good to be here and to be working 
with one of my heroes, Congressman Hinojosa, who has been a 
great champion of this cause, and my own Representative, 
Congresswoman Maloney, who introduced me. Thank you very much.
    Thank you for inviting me to testify on the timely, 
critical, and vital issue of the Federal Government's role in 
empowering all Americans to make informed financial decisions. 
I think it's especially fitting, as has been observed, for this 
committee to be holding this hearing during Financial Literacy 
Month. And as a member of the newly formed President's Advisory 
Council on Financial Literacy, and as a parent, an educator, 
and as a concerned citizen, I commend you for focusing on this 
very important issue. There are few matters which more directly 
address the traditional American values and virtues of self-
reliance, individual responsibility, and good citizenship than 
the issue we are talking about today.
    My organization, the National Council on Economic Education 
(NCEE), is a champion of financial literacy and a leader in the 
field. Our focus is on professional development for teachers. 
And I want to second several comments that have been made, 
particularly by Congressman Cleaver, in regard to the 
importance of getting this literacy into the core curriculum in 
the schools. We so often are spending our time and our 
resources on remedial action, as in some ways we're trying to 
do now with the situation, Congressman Hinojosa, that you 
pointed out for this country. But we can prevent some of that 
need for remedial action if we educate our young people more 
consistently and clearly and fully in the skills that they need 
to make good decisions.
    We at the National Council on Economic Education believe 
that all of our young people need to know and deserve to know 
about the economic system they will be working in and 
contributing to and benefitting from and ultimately inheriting. 
Since our founding 60 years ago, we have learned that the 
basics of financial literacy taught early, often, and well are 
a key to our Nation's continued success and to being 
competitive in the global economy.
    Our charge is to ensure that all of our young people are 
empowered with an economic way of thinking that will help them 
make good decisions about managing their resources as members 
of families and communities, in the workforce, and as citizens.
    Too often, we think that economics is what they do at MIT, 
not what you do when you're making day-to-day decisions about 
the management of resources in your life, and the need for 
educating all of our young people early is great. The NCEE is 
committed to contributing to solutions for this problem today 
and for the day after tomorrow. We are differentiated by our 
mission. We believe that financial literacy best comes through 
effective economic education, that this education ought to be a 
part of the core learning experience that our young people get 
while they are in elementary and high school.
    What do we know? We know that financial decisionmaking 
skills are learned behavior. You're not born with it. And we 
know that it's best learned while you are in school, before you 
get into the school of hard knocks. And it's best learned 
through well-prepared teachers, including parents as teachers, 
but the school system offers us a structural arrangement for 
conveying this kind of learning experience and making it stick.
    Financial circumstances in the lives of all of us keep 
changing. The basic principles of economics--cost benefit, 
opportunity costs, supply and demand--do not. We want to teach 
all of our young people a skill set that includes these tools 
to get into their heads and hands the ability to frame 
decisions that they have to make about financial services, 
about buying their first home, about managing credit and debt, 
about using financial institutions, to be able to make 
decisions about these things in a framework that has prepared 
them well to do it.
    [The prepared statement of Dr. Duvall can be found on page 
103 of the appendix.]
    Ms. Waters. Thank you very much.
    Mr. Mark Morial.

  STATEMENT OF MARC H. MORIAL, PRESIDENT AND CHIEF EXECUTIVE 
                 OFFICER, NATIONAL URBAN LEAGUE

    Mr. Morial. First of all, good afternoon. Congresswoman 
Waters, thank you very much, and I want to thank the members of 
the committee for holding this hearing and for this very 
special opportunity to summarize my written testimony this 
afternoon.
    First, on behalf of the National Urban League, I want to 
share with you some startling but compelling information about 
African Americans and the American economic system. According 
to this year's State of Black America Report, the standing of 
African Americans economically is but 57 percent that of white 
Americans. Further, African Americans hold 5 times more 
installment debt on average than do white Americans. And 
African-American net worth averages about $11,800 versus 
$118,000 for white Americans. This set of economic disparities 
is exacerbated and has been exacerbated by the subprime 
meltdown that has shattered and shocked this Nation.
    Indeed, I also want to share with you that the National 
Urban League has been involved in financial education and 
financial literacy now for almost 40 years. And it is an 
essential component of our economic empowerment agenda, that is 
an agenda to close the economic gaps that exist in this Nation. 
Last year, we served some 25,000 people from coast to coast 
with financial literacy and financial education training. We do 
this work in 75 of our affiliate cities, 75 of the 100 
affiliate cities in our network. Indeed, these financial 
literacy and financial education services include workshops, 
one-on-one counseling, case management, and a sophisticated 
asset-based approach to financial education, the idea that 
financial education should not only provide people with tools 
but with the objective of learning how to save, how to invest, 
and how to purchase homes. Of the 75 affiliates, 66 of them do 
homeownership education and counseling and that includes, 
Congresswoman Waters, homeownership education on the front 
side, to assist people before they even sign a mortgage and 
purchase a home, and post-purchase counseling, which involves 
assisting people who may get behind, may get into default with 
negotiating with the mortgage holder in an effort to try to 
protect or save that asset.
    Today, I want to offer, one, some thoughts about the 
advantage of the National Urban League in providing these 
services. One, we are a trusted ally in the community. There is 
no mistake that the National Urban League is not a debt 
collector, not the bank, not seeking to foreclose on people's 
homes but there to assist them. Number two, because of our 
trust people tend to come to us for assistance and help earlier 
rather than later.
    Here are some recommendations, and I agree with what Mr. 
Duvall has said and with what many of the earlier panelists 
said. First, I believe that Congress should lead the effort to 
dramatically expand financial education in this Nation, with 
both public and private resources with a focus on asset 
building, that is to help people save, invest, and buy homes. 
The question then is how do you examine, how do you evaluate, 
how do you measure the success of financial education? We 
should keep our focus on the bottom line and that bottom line 
is whether people's net worth expands and increases over time.
    Number two, as has already been said, we should focus on 
financial education for young people, for kids in schools, for 
preteens and for teens, ruling people in effective financial 
decisionmaking is very important in a context in an America 
today where the range of services, the range of options, the 
complexity of options, from the choices for cellphones, for 
investments, and for retirement accounts is far more complex 
than it was a generation ago.
    And, finally, pertinent to the subprime crisis, 
homeownership counseling should be dramatically expanded, and I 
applaud the committee, your leadership, Congresswoman Waters, 
and yours, Congressman Watt, in pushing the Congress to do 
this. With this important caveat, those dollars must be 
geographically focused on those areas in those communities that 
have greatest need.
    Number two, the expansion of investment in homeownership 
counseling and financial education should not be a license for 
the creation of fly-by-night homeownership counseling agencies 
that sprout up because they see an opportunity. Indeed, fly-by-
night mortgage brokers have been in fact one of the causes of 
the subprime meltdown.
    So, finally, I just want to thank you all for considering 
this as well as for the opportunity to testify today.
    [The prepared statement of Mr. Morial can be found on page 
189 of the appendix.]
    Ms. Waters. Thank you, sir.
    Ms. Jill Docking?

  STATEMENT OF JILL DOCKING, PRESIDENT AND FOUNDER, FINANCIAL 
                       FITNESS FOUNDATION

    Ms. Docking. May I assume everybody has my testimony, and I 
may summarize it?
    Ms. Waters. Yes, you may certainly assume that.
    Ms. Docking. This has all been quite interesting to me. I 
have been working on this issue for 10 years now, and by the 
way, I'm encouraged to hear everybody here is interested, and I 
thank all of you for clearly staying through either your lunch 
hour or nap hour or whatever this is for everybody, you all 
have really hung in there.
    Financial Fitness Foundation was a not-for-profit formed 
about 10 years ago in the State of Kansas in an effort to 
promote financial literacy. We started off by doing very 
interactive, high-energy seminars for young people in high 
schools, and we really could gin those kids up. They were 
fabulous, they were expensive to do, everybody was very 
engaged, especially kids from large urban districts. The board 
then concluded while that really caused a lot of excitement 
amongst the kids, it was not very efficient at spreading our 
message extensively. So as a little guerrilla group, as I call 
our little foundation, just a bunch of private citizens wanting 
to get this done in the State of Kansas. With the help of our 
executive director Carol Rupe, we launched an effort to change 
the law in the State of Kansas and we did so. Now it is 
mandatory in our K through 12th curriculum that we have 
financial literacy standards integrated into our standard 
curriculum of math, social studies, and language arts. So it is 
all the way through our curriculum.
    We now are trying to evaluate how well we are doing and how 
effective that has been and our conclusion is that it is 
spotty, that a lot of teachers do not really feel comfortable 
about teaching it and so they are therefore either not teaching 
it or not doing a very extensive job at doing so. So when I was 
asked to do this presentation, I differ from everybody here, I 
don't run an organization. I am a businesswoman, I really care 
about this, and I agree it has to be part of the system in 
either a very incentive-based way or mandatory. In a sense, you 
have to set a FLIC under FLEC. We did that in Kansas. We tried 
to get all of the wonderful people doing everything to get a 
little bit more focused and a little bit more directive.
    I have written on my testimony three thoughts on 
incentives--or two thoughts on incentives and one on mandates. 
How can the Federal Government help to fuel interest in the 
subject? I think our government must own it. If we go State-by-
State or city-by-city, we will not get the required results. 
There is no lack of material in this area of study. The 
scarcity is in the incentives or mandates available to drive 
the issue.
    Some thoughts on incentives would be the following: 
Government should help underwrite the training of K through 12 
teachers in the subject matters with funds for continuing 
education at the post-secondary level. Two, we need to scale up 
personal finance in all post-secondary general education 
courses. A course platform that is Web-based, taught by well-
trained faculty, would do the job but it requires resources. 
The third would be a mandate, a mandate much like Congressman 
Cleaver was talking about except I think it is not a mandate 
unless you have a proficiency exam. As a member of the Kansas 
Board of Regents, I will tell you they would have a heart 
attack listening to me talking about a mandate or proficiency 
exam in post-secondary, but as a business person, I believe 
that is some of what works. So a test of proficiency could be 
mandated by the Federal Government and funding provided for 
this test either at the end of high school or before entry into 
post-secondary school. In the event that the student fails, 
there should be funding remediation.
    I have listened to everybody here today. There is a lot of 
really good stuff going on, so I would not be particularly 
discouraged. I know you are frustrated because it is 
government. I am actually encouraged as a private citizen 
because I do not think I had any idea there was this much going 
on but there is no coordination and so either the private and 
public sector have to come together in some coordinated way or 
we somehow have to get this mass with a single source of energy 
to get some things done.
    The subprime issue is a short-term issue, this is a long-
term issue we need to be very patient about and move the system 
in order to protect the next generation. I might add that I 
think entitlement reform has a lot to do with this. You ought 
to care about your kids taking care of themselves or Social 
Security and Medicare are going to be very problematic to that 
generation.
    Thank you.
    [The prepared statement of Ms. Docking can be found on page 
101 of the appendix.]
    Ms. Waters. Thank you very much.
    Mr. Stephen Brobeck?

  STATEMENT OF STEPHEN BROBECK, EXECUTIVE DIRECTOR, CONSUMER 
                     FEDERATION OF AMERICA

    Mr. Brobeck. Thank you, Madam Chairwoman. The Consumer 
Federation appreciates the chance to participate in this 
hearing. This is the fourth opportunity we have had in the past 
2 years to testify before Congress on financial literacy 
issues. In the first section of our written testimony, we 
summarize the key points of our first testimonies. In the third 
section, we urge Congress to consider the improvement of 
financial product disclosures as an important strategy for 
improving consumer financial literacy and decisionmaking. But 
it is the second section of the testimony that I will now focus 
on.
    Judging from many indicators, including the lack of 
commitment by most schools, the minimal resources provided by 
government and the fact that most Americans have a limited 
understanding of the financial services marketplace, financial 
education has been paid lip service but not real attention by 
most of our society. And we believe that even the expansion of 
effective individual programs, such as those sponsored by the 
organizations represented on this panel, including my own, 
would not alter this unfortunate reality.
    So, how can we get society's attention and persuade it to 
make a greater commitment to improving financial literacy? One 
approach, and it was suggested by a couple of earlier speakers, 
is for all organizations committed to this improved literacy to 
join forces to try to persuade millions of Americans to 
periodically assess and improve their financial condition and 
to make available tools for doing so. That opportunity now 
exists, we believe, through America Saves Week, which this past 
February brought together over 80 major national organizations 
listed in an appendix to my written testimony, including more 
than a dozen Federal agencies and also hundreds of State and 
local groups, to urge individuals to evaluate and improve their 
spending, borrowing, and savings habits.
    Frankly, America Saves Week 2008 was a mile wide, and with 
a few notable exceptions, only inches deep. But next year and 
beyond, those coordinating the week, including fellow panelist 
Dallas Salisbury, believe that we can add considerable depth as 
well as great breadth to this initiative. We will do so with 
assistance from an America Saves Week Web site, which contains 
specific advice about how different organizations can 
participate in an array of savings tools for individuals and 
families. These include video PSAs, the Savings Knowledge Test, 
a personal assessment of one's savings progress, a personal 
wealth estimator, a personal ball park estimate of one's 
retirement savings adequacy, and an opportunity to develop a 
specific plan for achieving a desired savings goal.
    While coordinated by ASEC and America Saves, America Saves 
Week is a brand and a program that we would like other 
organizations to appropriate as their own. This past year, for 
example, the Armed Services embraced Military Saves Week. The 
North American Securities Administrators Association developed 
a theme of America Saves through investor protection. The 
National Foundation for Credit Counseling emphasized the theme 
of America Saves through debt reduction, and all these 
organizations crafted their own messages and publicized them.
    Let me conclude by saying that America Saves Week provides 
many opportunities for leadership by Members of Congress, 
especially in their districts. Simply urging local 
organizations to participate in the week would be very helpful, 
but even more valuable would be inviting some of these 
organizations to a meeting to discuss planning local 
coordinated America Saves Week activities and both ASEC and 
America Saves are prepared to support and help staff in any 
such efforts.
    Thank you again for this opportunity to testify.
    [The prepared statement of Mr. Brobeck can be found on page 
85 of the appendix.]
    Ms. Waters. Thank you very much.
    Ms. Janis Bowdler?

STATEMENT OF JANIS BOWDLER, ASSOCIATE DIRECTOR, WEALTH-BUILDING 
       POLICY PROJECT, NATIONAL COUNCIL OF LA RAZA (NCLR)

    Ms. Bowdler. Good afternoon, and thank you. I am the 
associate director for the Wealth-Building Policy Project at 
NCLR and in this role I oversee our research and analysis on 
the ability of Latinos to obtain financial security. I would 
like to extend the greetings and regrets of our president and 
CEO, Janet Murigua, who was not able to be here at today's 
hearing. But on her behalf, I want to thank the chairman and 
other committee members for the invitation, and I would also 
like to thank Congressman Hinojosa for your overall leadership 
especially in this area of financial literacy.
    The concept of financial literacy is one that is very 
important to the Latino and immigrant community, yet despite 
many great intentions, the financial education market is 
flooded with materials that do not work for Latino families. 
This is not to say, however, that there is a great need for 
more and better financial knowledge. In fact, low-income 
consumers need the same kind of advice and financial planning 
that families with means pay for; they simply cannot afford it.
    Today, I will briefly discuss research and analysis done by 
NCLR in this area. I will also discuss promising community-
based strategies to improve financial decisionmaking, and I 
will conclude with a set of recommendations.
    I will start by sharing some of our research. We recently 
released a report that examined financial education programs 
targeting Hispanic consumers. We found that most of the 
materials out there are just too broad. They do not effectively 
change consumer behavior, decisionmaking, or help families 
attain assets. This is troubling because we know that owning 
assets is the best way to help low-income families become 
financially secure. Thus, financial education programs should, 
in one way or another, connect families to wealth building 
opportunities. This is the only way that we are going to close 
the race ethnic wealth gap that my colleague from the Urban 
League mentioned.
    As a sponsor of housing counseling, we also know that one-
on-one sessions are meaningful, effective tools for building 
both financial knowledge and sustainable wealth. Through our 
network, we work with more than 30,000 families every year. We 
understand what it takes to help marginalized communities build 
financial security through asset ownership. Every day, our 
counselors meet new families that need deeper services than 
they can currently provide. In fact, about 80 percent of 
families who seek advice through NHN are not ready to purchase 
a home in the near future. Our counselors develop work plans 
for these families, some of which extend up to 2 years, but 
what these clients really need is good quality financial 
planning. In fact, the high turnout rates at free tax 
preparation clinics and IDA programs shows that low-income 
families are interested in this kind of service but the 
financial planning market is driven by the amount of wealth a 
client already has. Planners that rely on commissions or fees 
do not have an incentive to serve low-income families.
    So NCLR has identified three road blocks to extending 
quality financial services to the families that need it. First, 
which I have already alluded to, is that there are few 
affordable certified financial counselors available. The going 
rate of $200 an hour is prohibitive for a family of modest 
means.
    Second, there is little incentive for low-income families 
to spend hard-earned money on a planner. Upper-income families 
who itemize their income taxes can deduct the expense of their 
financial planner. This stands in stark contrast to the 
situation from modest income families who have no such 
incentive.
    And, third, Congress is not investing in this area. In 
2004, Congress provided more than $350 billion in tax benefits 
to upper-income workers to save and invest their money. No 
comparable investment in savings incentives has been made for 
low- and moderate-income workers.
    Plus, low-income communities are prime targets for 
financial predators. Hispanics are more than twice as likely as 
whites to become victims of fraud, and we know that these 
scammers often pose as ``certified'' counselors or consultants 
in order to push their predatory product. We must establish a 
network of reliable, independent financial counselors who can 
provide financial planning services, budget and savings advice, 
basic banking skills, and a safe alternative to the scammers.
    Let me close with just a couple of recommendations. We need 
a refundable Federal income tax that will create an incentive 
for low-income families to see a financial planner. We need an 
infrastructure of community-based financial counselors modeled 
on the successful housing counseling program, and we need 
Congress to explore this theme of financial scams through 
hearings and reports. Policymakers can take meaningful steps to 
increase asset ownership among Latinos, and we believe that 
financial counseling is the lynch pin in this strategy.
    Thank you, and I would be happy to answer any questions.
    [The prepared statement of Ms. Bowdler can be found on page 
67 of the appendix.]
    Ms. Waters. Thank you.
    Next, we will hear from Ms. Phyllis Frankfort.

 STATEMENT OF PHYLLIS FRANKFORT, PRESIDENT AND CHIEF EXECUTIVE 
        OFFICER, WORKING IN SUPPORT OF EDUCATION (W!SE)

    Ms. Frankfort. Chairwoman Waters and members of the 
committee, as president of W!SE, and chair of the New York 
Financial Literacy Coalition, I thank you for giving me this 
opportunity to share my thoughts regarding financial literacy 
and education for young people. America desperately needs 
financial education. We cannot correct the past. We can, 
however, strive to do better by preparing today's youth to be 
responsible and financially savvy adults.
    We still lack of cohesive national policy on financial 
literacy that is widely known and an educational commitment. 
Very few States require or recommend the teaching of finance 
and the requirements are inconsistent in depth and breadth of 
content. There is also a lack of funding. I am encouraged by 
the interest W!SE has received from Representatives Ackerman, 
Serrano, Velazquez, and particularly my Congresswoman, Carolyn 
Maloney.
    On a national level, the introduction of H.R. 4335 and S. 
2671 offer hope for a critically needed, overarching national 
framework. While I am pleased that the Administration, too, 
recognizes the need, I am concerned that a recent initiative by 
the Treasury Department reflects the shortcomings of No Child 
Left Behind: testing without regard to teaching or learning.
    Five years ago, W!SE created the Financial Literacy 
Certification Program to help high school students become 
financially literate before they graduate. At the time, 18- to 
25-year-olds comprised the fastest growing group filing 
personal bankruptcy and more young people were dropping out of 
college because of personal debt than academic failure.
    W!SE invites high schools to teach a course or unit on 
personal finance and then assesses the student's acquired 
knowledge. We provide curriculum, pre-tests, online practice 
test questions, and our standardized certification test, 
available in English and Spanish and validated by industry 
professionals. Students who pass are certified financially 
literate and schools, teachers, and students are eligible for 
awards based on test results. The word is out; this program is 
now in 21 States. It has reached 65,000 students and it has 
grown by 1,500 percent since 2003. We have an average 74 
percent of students passing the certification test and the rate 
is improving to 82 percent in fall of 2007. Before instruction, 
pre-test passing is 49 percent. After instruction, results have 
consistently shown a statistically significant improvement of 
24 percent or more. Most important, student behavior in 
managing their own money changes for the better. Clearly, our 
program and tests work, all tied to curriculum and instruction. 
We have empowered teachers. It helps teachers to measure 
whether or not they were effective and it asks students to 
demonstrate knowledge.
    In contrast, Treasury has spearheaded a high school 
challenge which simply replicates W!SE's concept of a testing 
and recognition initiative. It is not tied to instruction and 
it will take precious, limited class time to a little effect. 
They say it is intended to spark interest when the priority 
needs to be on getting the job done. The challenge is not only 
a missed opportunity for innovation in financial education but 
also a waste of taxpayer dollars.
    I am not being self-serving or proprietary. I have conveyed 
my concerns to Treasury officials. I have offered our 
assessment tool tied to instruction as a more effective way 
forward. After all, this same Treasury awarded W!SE its Sherman 
Award for Excellence in Financial Education just 4 months prior 
to their decision to develop their own test. And the Department 
had solicited and received our copyrighted materials. They 
rejected our offer and have gone forward with their own test 
not tied to instruction.
    In terms of nourishing the minds of our youth, we feel the 
challenge is a plate of syrup without the pancakes. This is 
truly unfortunate. What is needed is a realistic, executable 
approach to financial education. More States need to mandate 
financial education in high schools, funds to facilitate 
implementation of these mandates and programs that work are 
needed, a strong focus on building teacher capacity, efforts to 
leverage best practices in instructional methods and, of course 
as mentioned before, coordination. We also need funds to study 
the long-term effects of financial education. We have young 
people who graduated 5 years ago, are they still financially 
well?
    Ms. Waters. Thank you very much. Your time has expired.
    Ms. Frankfort. And we recommend the swift passage of bills 
pending before you and that our experience and model of 
certification aligned to instruction be embraced. Thank you.
    [The prepared statement of Ms. Frankfort can be found on 
page 110 of the appendix.]
    Ms. Waters. Mr. Salisbury.

   STATEMENT OF DALLAS SALISBURY, CHAIRMAN, AMERICAN SAVINGS 
  EDUCATION COUNCIL; AND PRESIDENT AND CEO, EMPLOYEE BENEFIT 
                       RESEARCH INSTITUTE

    Mr. Salisbury. Congresswoman Waters, I want to thank you 
for chairing this hearing along with Chairman Frank, and I also 
want to commend and thank Congresswoman Biggert and Congressman 
Hinojosa for their outstanding work over the years and 
encouragement in these areas.
    Let me start where Ms. Frankfort just ended. Some years 
back, the American Savings Education Council undertook a Youth 
and Money Survey and a Parent's Youth and Money Survey. In both 
of those what we found is that over 75 percent of high school 
students in America actually have a financial education course 
available to them in school as an elective, but less than 7 
percent take that course. It is given very low priority.
    I was recently home--to age myself--for my 40th high school 
reunion in Everett, Washington. The person from whom I took a 
financial education course in high school was there to visit 
with some of us, along with the individual currently teaching 
that course. When I was in high school, seven students were in 
the class, then an elective. In this year's last class, 17 
students out of a high school population of 900 students chose 
to sign up for the elective. In many cases, as other speakers 
have noted, this is very frequently not an issue about an 
absence of material, about an absence of opportunity, or about 
an absence of curriculum; the issue is an absence of will and 
it is an absence of priority.
    The last panel was intriguing in terms of the heavy-duty 
fudge factor that marked responses to your direct questioning 
concerning whether such education should be a requirement in 
school. Others at this table have said it should be. As one who 
took it and benefitted from it, I have urged many of my nieces 
and nephews to sign up, and have been told other things were 
more important. I would simply, on a personal level, suggest 
that in the absence of a mandate, it is very unlikely that 
students will choose to take the courses even if they become 
universally available. So I encourage you to become more 
directive, so to speak.
    Secondly, I would note vis-a-vis the content issue, I have 
had the privilege the last 4 years of serving on the FENRA 
Investor Education Foundation Board. We have found it 
excruciatingly difficult, frankly, to give away money in a way 
that we felt would make a difference. Why? Because there is an 
extraordinary number of people and organizations that want 
money to create yet more content but do not want funding for 
delivery, funding for training, and funding to deliver real 
results, and we have been trying to get it to that point. So I 
encourage you as well, per the comments to FLEC and others, to 
consider the issue of getting people to be willing to use the 
existing resources effectively.
    For example, the American Savings Education Council, 
created in 1995, working with the Federal Government and now 
with over 200 private partners, has created 86 public service 
announcements under its Choose to Save Program. These are high-
quality announcements. They received the 2007 National Emmy 
Award for Savings. We have offered those PSAs free of charge to 
anyone in the Nation who wishes to take them, add their 
branding to the end, delete ours, and to use them for public 
education. Military Saves has used them. America Saves has done 
that. The U.S. military uses them internationally. It was noted 
by the U.S. Treasurer that FLEC chose to take one PSA and use 
it but, Congressman, per your point, they were offered 86 of 
them that could have been at the cost of about $400 per PSA and 
turned into promotions for money.gov. Instead, we have to 
create something new out of whole cloth and 4 years have been 
lost, compared with what could have been.
    I do not say that to whine; I say that to suggest there is 
much that could be accomplished if everyone simply became a 
little competitive, a little less brand-oriented, and a little 
more oriented toward actually making something happen.
    And I conclude with the comments and endorsement of what 
Mr. Brobeck was saying. We worked with his organization, 
America Saves, to create a new Web site, non-branded, 
Americasavesweek.org, and to urge all organizations to use that 
as a rallying point for all of their own programs in order to 
attempt to take this more broadly to communities across the 
Nation, with the message of a very regular checkup. And I would 
again urge individuals and organizations to do that. I invite 
every single Member of Congress to promote Americasavesweek.org 
to their constituency. There is nothing commercial on it. 
Congresswoman Biggert and others have done this. Congressman 
Hinojosa has done this, and we would welcome that type of 
support from all.
    And, finally, I would simply underline to this committee 
the tremendous importance of what you are doing and also the 
tremendous importance of something that was downplayed a little 
bit by the first panel: The extraordinary importance of 
effective consumer protection and very, very powerful 
regulation. The subprime crisis has made the necessity for this 
absolutely important.
    Thank you.
    [The prepared statement of Mr. Salisbury can be found on 
page 201 of the appendix.]
    Ms. Waters. Thank you very much. I will now recognize 
myself for 5 minutes for questions. First, to you, Mr. 
Salisbury, what was the name of the class that you took when 
you were taking this literacy training?
    Mr. Salisbury. Business education.
    Ms. Waters. Business education. What is the name of the 
class today?
    Mr. Salisbury. Business education.
    Ms. Waters. Do you think people are just not interested 
enough and that the class is attractive enough to interest 
students but somehow students do not get it?
    Mr. Salisbury. Based on the size of the enrollment on a 
consistent basis, I suggested to the school that, after so many 
years of getting such low enrollment, they might want to get a 
marketing approach and re-name the course something that would 
get people more aggressively interested in it, something like, 
``How to assure that you will be able to buy your iPod, your 
BMW, and afford college.''
    Ms. Waters. That will do it, how to make money, how to get 
the things you want. That is what I was wondering, whether or 
not the title of the class was sexy enough.
    Let me turn to Mr. Marc Morial. We are concerned about 
literacy and not just focused on the subprime crisis, however, 
it is a crisis and we have to pay attention to it and try and 
figure out what to do to help owners save some of these homes. 
One of the things that we have documented is that minority 
neighborhoods were targeted. For both you, Mr. Morial and Ms. 
Bowdler, the Council of La Raza, are you seeing this in the 
community that you serve? Do you have an extraordinary number 
of foreclosures? And, if so, what are you doing about it? What 
service do you offer, first Mr. Morial?
    Mr. Morial. Thank you for the question. We see, and the 
evidence is incontrovertible, that there are a high number of 
foreclosures in urban and African-American communities. It 
stems from the fact that about 50 percent of African Americans 
who purchased homes in 2005 and 2006 did so with subprime 
mortgages; that is 50 percent compared to about 13 percent in 
the overall population.
    Second, we have, and the evidence again is 
incontrovertible, that many African Americans who could have 
qualified for a normal customary fixed 30 year conventional 
mortgage, could have qualified, in fact were directed, steered, 
pushed, and targeted in a reverse redlining process into these 
high interest, subprime mortgages.
    What we have done in 2007 is we issued in February of 2007 
a Homebuyer Bill of Rights that outlined a number of 
recommendations, key are the expansion of homeownership 
counseling, and we did about 4,000 cases like that in 2007. 
Secondly, urging this Congress to pass a national anti-
predatory lending law to put some future controls on the 
excesses and practices that led to this meltdown, as well as a 
number of other things. So to answer your question, yes, it has 
disproportionately affected African Americans in urban 
communities. Yes, we have done a number of things, but we need 
to be able to expand dramatically our homeownership counseling 
to try to help more people who are in default, who are at risk 
of losing their homes to re-negotiate their mortgages and in 
order to protect their homes.
    Ms. Waters. Ms. Bowdler, what are you doing, what is La 
Raza doing?
    Ms. Bowdler. I would just echo the comments of Marc, I 
think that is exactly right, our communities were clearly 
targeted. We have been up here several times talking about 
that. We now have a massive counseling effort underway. Our 
counselors went from a call a couple of times a week to dozens 
upon dozens a day, and they are working at 150 percent to keep 
up with that but there are simply not enough counselors out 
there on the ground to do this work. They cannot keep up with 
it. We need more resources but we also need lenders to come to 
the table and servicers to come to the table and do the kind of 
loan modifications that we need to make these loans affordable 
for these families. Counselors play a really important role for 
the most vulnerable families out there. They are not going to 
get to see every family that needs this kind of help, so we 
need servicer and lender accountability as well.
    Ms. Waters. Thank you very much. Ms. Docking, I think you 
talked about K through 12 curriculum that has been advanced by 
your program, Financial Fitness Foundation?
    Ms. Docking. Not advanced--it is a law, it was changed as 
part of a Senate bill. We advanced it in terms of just 
organizing all the players. By the way, an outstanding 
bipartisan effort. I am really proud of everybody in Kansas for 
getting that done.
    Ms. Waters. I am a little bit curious about what you do 
with kindergartners and first graders in teaching financial 
literacy, and I am wondering, is the piggy bank obsolete?
    Ms. Docking. No, actually, you would be surprised how much 
kids like the concept of money because it makes concrete math 
and fun math. The piggy bank is not obsolete. May I defer to 
Carol Rupe who actually runs our program to answer the 
specifics of your question on the curriculum? She is right 
there.
    Ms. Waters. No, I do not think so. What we will do is we 
will ask you to submit that for the record.
    Ms. Docking. Alright.
    Ms. Waters. We will get that information from you. We are 
going to continue with our panelists today because we have to 
be out in a certain length of time, so let me just move on.
    Ms. Docking. Alright, thank you.
    Ms. Waters. Thank you very much. I am going to yield to 
Mrs. Biggert for 5 minutes.
    Mrs. Biggert. Thank you, Madam Chairwoman, and thank you 
all for being here. I am sorry that I missed some of the 
testimony, but I will review it. And, Mr. Duvall, it is great 
to see you, you have done so much for financial literacy and 
have been so active in this. I really appreciate all that you 
have done. I would like to ask you, looking at the education, 
and we have been since 2003 working on this, and I am really 
kind of discouraged in the fact that we are still moving 
forward but there is not any great movement for how we are 
going to address financial literacy for kids or seniors or 
those in between, and we are seeing the mortgage crisis and 
people getting into things that they did not understand. So you 
are advocating having this financial literacy in the curriculum 
in schools, is that correct?
    Mr. Duvall. Absolutely, that is the heart of our mission as 
you know, Congresswoman Biggert.
    Mrs. Biggert. Right.
    Mr. Duvall. And we do keep chipping away at it. I have not 
gotten discouraged yet. You are seeing more States that are 
including economics and personal finance in their requirements.
    Mrs. Biggert. That is what I wanted to ask you, about how 
many States now have really mandated that for curriculum?
    Mr. Duvall. All of the States now include economics, basic 
applied economics in their standards for the schools.
    Mrs. Biggert. But do the children have to take the course?
    Mr. Duvall. No, a smaller number are required to take a 
course and only about half the States include personal finance 
in their State standards and a smaller number make it a 
requirement for graduation.
    Mrs. Biggert. Is there anything--we do not want to be the 
national school board, and I think we have gotten into a lot of 
things through No Child Left Behind and things that maybe we 
should have left some of this to the States, so I am cautious 
about what we do but how can we show the States and the 
educators that this is really an important issue that they 
should be teaching? And you have developed materials, it is 
right there for them.
    Mr. Duvall. I think what is required to change the 
situation is to have standards-based materials and then to do 
the teacher training that enables the teachers to use those 
materials effectively and then to do testing and assessment and 
evaluation.
    Mrs. Biggert. Do you think that No Child Left Behind is 
getting in the way?
    Mr. Duvall. Well, it has had what the economists call the 
unintended consequence of crowding other subjects besides 
reading literacy and math literacy to the side. Efforts have 
been made, and you have been a champion of some of those like 
the Excellence in Economic Education Act, to restore an 
emphasis on economics and personal finance to the core 
curriculum. I think that is the way to go for the future to 
make a difference is in the re-authorization debate for No 
Child Left Behind, to make sure that economic and financial 
literacy are not crowded out.
    Mrs. Biggert. Thank you. And then, Mr. Salisbury, you talk 
about the messages that individuals receive each day to spend 
and if need be to borrow, and I suppose we go back to a 
generation that is not as visible any more but the ones that 
went through the Great Depression. I can remember my husband 
telling a story about the fact that he and his mother were 
taking the street car, and he had his money and he lost a penny 
and so they could not take the street car because that penny 
was part of the fare and how those messages--and now we want to 
even do away with penny because it is superfluous right now. It 
does not add up to anything, I guess is what they are saying, 
but what can we do for this message for saving? We have minus 
one percent saving in this country, how are we going to 
encourage people to save?
    Mr. Salisbury. Well, I lost my father last summer just 
short of 94. When I went to work at age 13, he said, ``Now, you 
save 15 percent of everything you earn and you do that from now 
until you quit working and you will be fine.'' That kind of a 
message at home is something that is irreplaceable. But as a 
practical matter, even as the last panel kept emphasizing as 
they are financial industry regulators, we need to consider 
what various financial firms do in this area. That is, take any 
of those firms and look at what they are spending on financial 
education, and then look at what they spend every week on 
advertising encouraging people to borrow and spend, and the 
amount they spend simply to send me the flow of applications 
for credit cards that I do not want each and every month. So I 
think part of this is recognizing that, if we want a focus on 
savings education and financial literacy, frankly it is going 
to happen only if it is mandated. It is only going to happen, 
with a Federal Government that is frankly de-regulation 
oriented, if there are mandates for consumer protection 
legislation and if that effort is intense.
    And as a practical matter, a focus on basic financial 
education, public service announcements, etc., needs to be 
required, not merely encouraged. On the front page of the 
Business Section of The Washington Post this morning, it noted, 
``Will we keep the consumer spending? They are 70 percent of 
the economy.'' If we cannot keep them spending, good gosh, we 
will not have growth, every emphasis is on getting people to 
borrow and spend, even with the stimulus package--spend your 
tax refund, certainly do not put it in an IRA or save it.
    So I think it is cultural, it is cultural from the 
government on down. As my father, were he still here today 
would and did tell me throughout my life, ``They will tell you 
to spend it, you cannot spend it until you already have it in 
the bank. They want to sell, that is how they make their money. 
Recognize it is a self-interested message and look out for 
yourself first.''
    Mrs. Biggert. Thank you.
    Mr. Hinojosa. [presiding] The gentlewoman's time has 
expired. We need to continue to expand our discussion but we 
must move on. I am delighted to have been given the opportunity 
to continue the chairman's work here. I would like to call on 
the gentlewoman from New York, Carolyn Maloney, for 5 minutes.
    Mrs. Maloney. I thank the gentleman for yielding and for 
his deep concern about financial literacy and all of his hard 
work, along with Ranking Member Biggert.
    I would like to ask Mr. Duvall, your organization's 
Economic and Personal Finance Education Report Card on the 
Nation's Schools found that only seven States require a 
personal finance course as a prerequisite for graduation. NCEE 
found that only nine States actually test the students 
knowledge of personal finance. What specific initiatives are 
your members working on to increase these numbers?
    Mr. Duvall. We work on that issue by both advocacy and by 
service and delivery. In the advocacy area, our State 
organizations, our affiliates in all of the States, try to push 
this cause with the State legislatures and with the 
decisionmakers for education within the states.
    Mrs. Maloney. Are you active in every State, is your 
organization active in every State?
    Mr. Duvall. Yes, we have a council in every State, some are 
stronger than others but evidence of the difference that can be 
made was given by my colleague in regard to the State of Kansas 
where they have put through legislation that calls for personal 
finance being taught and delivered in the schools in the State.
    And then in terms of service and delivery, we do the 
massive teacher training effort in every State through our 200 
university-based centers. We get to the teachers because they 
come to the university centers for continuing education credit. 
So we are working with K to 12 teachers, 150,000 last year. And 
in turn that has a multiplier effect because those teachers 
teach several generations of students.
    In improving the situation and the national map, I think 
both of those things are required, advocacy and service, 
working through the school systems and with the teachers and 
the school boards and the decisionmakers to really get it into 
the schools. One of the challenges is shelf space and the 
competing claims for attention within the curriculum. So our 
strategy on that is to work by infusion to get basic personal 
finance and basic applied economics into the math curriculum, 
into the social studies generally, into history, and in science 
as well.
    Mrs. Maloney. I would like to really ask a question to any 
panelists if they would like to respond. I am a former teacher, 
and I watch education in my district, I watch it with my 
children, I watch it very carefully, and I have noticed, I 
believe, and this is my interpretation, I want to make it 
clear, it is my own interpretation and not a statistic, that 
there is almost an attitude against financial literacy in the 
schools. And I cite one school, and my daughter was in this 
school actually, and I thought the teacher was great, she was 
teaching financial literacy, she divided the kids up into 
teams, they were buying stocks, they were investing, they were 
studying finance. It was a tremendously exciting interactive 
financial learning and one of the parents complained, and they 
had it removed from the curriculum. I thought it was 
outrageous. But there seems to be an attitude of fighting it.
    I am a product of the public school system and in the 
public school system when I was growing up, we got a little 
bank card and we were encouraged to save, and we got our 
allowance and we all saved and some people have criticized that 
this ``helps the financial system'' and it has been taken out 
of the school curriculum. And to me finance, as all of you have 
said, are part of our lives, it is part of our next 
generation's lives. It should be required curriculum. Why are 
we having so much trouble getting this as part of the 
curriculum and in many cases removing it. They have removed the 
curriculum that I had as a child. And I just want to open it up 
for comments because it seems to be an attitude or something. 
And actually the financial curriculum that is taught in my 
district, in many cases it is done as an extracurricular 
activity, and I have been invited in for a day where they 
``teach finance'' today. It is not an integrated part of the 
curriculum and there seems to be, and maybe it is my own 
interpretation, but they do not even have the little bank cards 
anymore that we had in school and this is how you save and this 
is how you bank and this is how you use the financial system. 
So I would like to open it up for any comments? And my time has 
expired, I thank the gentleman.
    Mr. Morial. I want to offer an observation and again, this 
is a personal observation, I think number one, the foundation 
of this Nation's political system is democracy. And it used to 
be that we focused and it was required in schools that children 
learn civics, the Declaration of Independence, the basis of the 
Constitution, the three branches of government. The foundation 
of our economic system is the free enterprise system, which is 
based on individual and collective choices. Each system is 
based on and presumes that citizens have basic knowledge and 
information that empowers them to make personal choices. We 
have forgotten and walked away from an understanding that this 
basic information and preparation is needed and necessary for 
people to be able to navigate.
    My second point is this, I had an opportunity to teach a 
financial education class to high schoolers in Chicago about 2 
years ago. I started the class by raising up my cellphone and 
asking each high schooler who had a cellphone to raise it up. 
Then we went around the room and asked each of them, how much 
are you paying for your cellphone? It ranged from $13 a month 
to $160 a month. And the students were shocked that they did 
not even know, and they felt very cheated that some students 
had $13 a month cellphones and some had $170 a month cellphones 
because they were falling prey to marketing and aggressive 
appeals without even being empowered to ask questions, to 
examine choices. The point is that the financial system that 
our children live in and we live in today is different than 30 
years ago when only wealthy people had credit cards, when there 
was one kind of phone bill, one kind of mortgage, and one kind 
of way you could purchase a car. There were no leases, open-
end, closed-end, none of the choices that are available. So it 
has been positive that there are choices but it also means that 
there is potential for abuse. So I think that it requires a 
fundamental understanding and a shift in our thinking that 
training and preparing young people to make these intelligent 
choices is going to improve our system.
    And that is an observation of what in fact--I think 
sometimes we are stuck in the past in thinking and not 
understanding how sophisticated things have gotten. I think 
that we do not understand that the fundamental is that an 
educated society about its government and about its economic 
system is necessary for the overall health, quality, and 
performance of our Nation. That is why, for us, when we look at 
the disparities that exist in income net worth and jobs, we 
recognize that a component of it is to inform and empower 
people with knowledge and information. That is not all it 
requires but it is fundamental.
    Mr. Hinojosa. Thank you, Mr. Morial. The gentlelady's time 
has expired. I am going to take the opportunity to ask a few 
questions. I am going to start with Ms. Jill Docking and say 
that I have enjoyed listening to everyone who has made their 
presentations on both panels. I am a little bit happier with 
the second panel than the first, so I will probably show you 
that by the line of questioning that I am going to use.
    It was exciting to hear what has been done in Kansas, and I 
commend you for the spirit and the optimism that you have shown 
in your presentation. Listening to everyone, I have come to the 
conclusion that possibly the reason that Mr. Salisbury gave 
that very few students signed up for the elective of business 
education is because of the answer that my youngest of four 
daughters, oftentimes says, ``Dad, it is because it is 
boring.'' When I say something about what is going on in school 
and possibly the lack of interest, and that is one of the 
common responses of a 12-year-old. I have four daughters and 
the youngest one is highly spirited and oftentimes answers 
exactly how she feels.
    Possibly, Mr. Salisbury, we need to talk about how to take 
the boredom out of this subject. And I am going to ask Ms. 
Docking if maybe you could answer that question: How can we 
make this more exciting like music, like theater, like the 
things that our kids like?
    Ms. Docking. Yes, Congressman. I would refer you to the 
front page of the Wall Street Journal today that has an article 
on how they have made accounting fun. It is a little easier to 
make financial stuff fun than accounting, and there are all 
sorts of programs that are now being used interactively on 
cellphones to teach kids in a much more interesting way how to 
do this. On our seminars, we specifically, we zeroed in on that 
question because we had kids in our audience who were going to 
Harvard, and we had kids who might be going to jail, and I am 
not kidding because we had full senior classes in large urban 
areas, and we had to keep everybody interested.
    If I were queen and I were doing this FLEC thing, I would 
hire a company, and I think Apia is one of the private 
companies, I know there are many that do that interactive, Web-
based teaching. That is how this generation appears to learn, 
and I know people who are doing programming with W!SE, you 
probably sort of figured that out, haven't you, how to get them 
to do it? So I would use we have a lot of very creative private 
companies, but is not this FLEC just government-oriented, are 
you allowed to use the partnership with private companies to 
get that done?
    Mr. Hinojosa. Congress can modify FLEC and amend the FACT 
Act. If it is not working, we are responsible for making 
changes so that it does work, so Congress is pretty powerful.
    Ms. Docking. Yes, that answers the question. By the way, as 
Congressman Cleaver has come in, Financial Fitness Foundation 
has looked intensively at--now that we have gotten it into the 
school system, I would love to get it in the churches in Kansas 
because there is a lot of curriculum teaching faith-based 
financial planning in urban areas inside churches. I know a lot 
of teaching goes on, and I can get it from the kid to the mom 
and dad to the grandparents, so I think we need to think a 
little bit outside of the box. I do not know if Congress can 
think that way, but we have been trying to think that way.
    Mr. Hinojosa. Thank you. I like your response. I want to 
ask some other questions. Yes, Ms. Frankfort?
    Ms. Frankfort. I just would like--
    Mr. Hinojosa. I cannot hear you.
    Ms. Frankfort. I am sorry. I would like to add to what Ms. 
Docking said by suggesting that we talk to and have a 
conversation with the hundreds of teachers who are very 
successful in teaching personal finance. We have a system 
whereby we honor teachers who have 90 percent or more passing. 
And in most of our schools, we are reaching all the seniors in 
a high school, and so we have students who are special 
education, we have students who are very bright, students in 
difficult economic situations, but they are consistently very 
successful. So I think that there should be some kind of 
follow-up or discussion with them that might inform and help 
answer that question.
    Mr. Hinojosa. Thank you for adding your thoughts on that. I 
want to forewarn you that Chairman Frank is going to be coming 
in a few minutes and taking over the Chair's responsibilities 
here, and he let me know earlier that he wants to have some 
follow-up, in other words, what is next, be thinking about 
answers to his questions because we think that we have heard 
some very valuable information here from all of the panelists 
but now what we need to know are what are the next two or three 
steps we need to take to be able to turn this around and make 
it work because we are in a crisis?
    And, finally, I want to conclude my questioning by saying 
to Ms. Bowdler thank you for coming in place of Ms. Janet 
Murigua. I think those of you who addressed the limited 
English-proficient population and those who are so challenged 
because of low-income families, as you did Mr. Morial, I think 
that it is like teachers who are asked to go to neighborhood 
schools where 80 and 90 percent of the children qualify for the 
free lunch program because in those schools, they oftentimes 
are the ones who are scoring the lowest on standardized tests, 
not because they are not smart, it is because our programs just 
are not designed to really help the children who remind me the 
theory of a great pair of educators known as the Cardinas and 
Cardinas' ``Theory of Incompatibility,'' and I said, ``What in 
the world is that?'' They said, ``That is where you try to take 
a square peg and put it into a round hole,'' and that I think 
is happening in our public schools and certainly is a serious 
problem. I am not going to ask any more questions because there 
are some of my colleagues who would love to have time to ask 
their questions, so now I would like to recognize the gentleman 
from New York, Congressman Greg Meeks.
    Mr. Meeks. Thank you, Mr. Chairman. Let me ask this 
question because I am concerned, in my community and all across 
America, we had a program in the Congressional Black Caucus 
called WOW, With Ownership Wealth. We just a very short period 
of time we were telling everybody to buy a home. Why? Because 
our home is an appreciating asset and we were urging folks to 
buy homes and take advantage of these products, etc., and I 
don't know whether or not we were doing the proper kind of 
counseling or training even while were doing that, just urging 
folks to buy a home and they were doing it, and now we have 
this terrible crisis. Let me ask Mr. Morial first with the 
Urban League, I know that you are in Nashville and you are 
doing a lot counseling in different places, could you tell me 
the difference between what you provide to communities as the 
counseling is concerned what NeighborWorks does and whether or 
not your services are the same or not, can you give me an idea 
on that?
    Mr. Morial. Thank you, Congressman Meeks, and I appreciate 
your question and certainly your leadership and advocacy. There 
is a great deal of compatibility with what others may do and 
what we may do with this distinction. We not only help people 
with homeownership education and counseling, we provide job 
training, job placement, and a broad array of services through 
our affiliates from coast to coast. So if a person is behind on 
a mortgage, for example, and one of the challenges is that they 
may have lost their job, then our approach would be not only to 
assist them in re-negotiating with the mortgage holder but to 
assist them with job placement. So it is a case management 
approach that the Urban League has employed now for its almost 
100 years of existence.
    Secondly and very importantly, our affiliate offices are 
located in the communities that we serve. By and large, we are 
located in the neighborhood, near to the constituency that we 
serve, not an access by going downtown or going across town but 
in the communities that we serve. And we think that the 
proximity of financial education, homeownership education and 
homeownership counseling services to neighborhoods is a very 
important part of the delivery system. If we are going to 
expand the availability of financial education and 
homeownership counseling, it has to be provided through 
multiple sites and multiple locations. Schools, yes; faith-
based, yes; community-based, yes, and we are a community-based 
organization that does that.
    Ms. Bowdler. Thank you for your question, and I want to 
respond to one of the comments that you made in your opening 
about what were counselors out there doing? We told them to go 
out and buy homes and now where are they at? The role of a 
housing counselor has always been and continues to be an 
independent advocate for that family. And what counselors do is 
they take a family in, they make a financial assessment, and 
they put them on a track. Their goal is to put that family in a 
situation where they are getting a home for long-term 
sustainability. So from our perspective, the question is not 
just should a family buy a home, it is when should they buy a 
home and when are they ready, which is why you see families 
that have gone through counseling programs like NCLR or Urban 
League perform much better. And we are talking about low-income 
borrowers who got prime products, who were the prime targets 
for all of the subprime mess that are now performing very well. 
It is that kind of success that we would advocate that you need 
to replicate in the area of financial counseling.
    The fact of the matter is that affluent families, whether 
or not you went to a class in high school, need this kind of 
service; they need financial advice. They go out and purchase 
it, they pay somebody to tell them what to do with their money. 
Low-income folks who have even less resources and less means 
have even more of a need to know exactly what to do with each 
one of their hard-earned precious dollars. And so we would 
advocate for a similar kind of independent financial counselor 
that could provide free or low-cost advice to families as they 
are about to make major purchases, not just homes but credit 
cards, open your bank accounts or get your tax credit back.
    Mr. Meek. That is exactly right because sometimes when 
folks go through counseling, you do not get into the larger 
credit issue to understanding. That is one of the questions I 
wanted to ask you and maybe Mr. Morial and the others, when you 
counsel individuals do you go into the other credit aspects 
because a lot of people do not understand credit and look into 
further their financial needs, etc., is that part and parcel of 
the model that you use when you counsel with them because I 
know when I have had individuals come into my office and had 
some counseling, they did not go into it at all. And I was just 
wondering whether your two organizations would do something of 
that nature?
    Mr. Morial. If I can, I think, as I shared earlier, because 
we take a holistic approach, the way we would approach it is to 
provide and sort of deal with all of the family or all of the 
client's issues, challenges, and problems. If you do financial 
education/homeownership counseling in the correct way, then it 
is holistic. It is not just narrowly tailored, and that is why 
providing the service through a trusted community-based 
organization like the National Urban League and its affiliates, 
like the National Council of La Raza and its affiliates or 
faith-based is much different than if it is provided by a 
mortgage broker, a mortgage company, a financial services 
company, a real estate concern whose only emphasis is to try to 
get a person into a home now versus helping the person prepare 
themselves financially for asset building and certainly 
ultimately to get into a home at the right time and on the 
right terms and under the right circumstances so that they can 
sustain that asset.
    Mr. Hinojosa. The gentleman's time has expired, and I have 
been told that another committee is coming in at 1:30. Being 
that the chairman has not returned, I am going to ask the 
question that he said he would be asking you, and that is, what 
are the next steps? I apologize, Mr. Cleaver, that I am not 
going to give you the 5 minutes that you are entitled to, but I 
guarantee you that you are going to like the answers that you 
are going to hear because being that I have to be out of here, 
I am going to give each one of you 1 minute, and only 1 minute, 
to answer the question, what are the next steps that we should 
take to turn this thing around and say as a result of panel one 
and panel two, we have found the answers to turn this around 
and make it better. So I will start with you, Mr. Salisbury. 
You have 1 minute.
    Mr. Salisbury. Number one, Congress recognizing, in spite 
of State education requirements, that the No Child Left Behind 
program should include a mandate that some type of financial 
literacy education be a part of every curriculum in the United 
States. Secondly, I think that--
    Mr. Hinojosa. Do not give me two, just give me that one. 
Thank you. Ms. Frankfort?
    Ms. Frankfort. And, secondly, the legislation that creates 
this mandate should also include funding to support the rapid 
expansion of that which works because there are initiatives 
that are very effective, whether it is the counseling or a 
program in a high school but resources are required to make 
that happen.
    Ms. Bowdler. Yes, I would say that we need to expand the 
incentives that we offer to affluent and upper-income families 
to save and get financial advice to low-income families. There 
is no reason why low-income families should somehow be held to 
a higher standard of financial literacy, to sort of inherently 
know how to invest their money and so they need those same 
incentives.
    Mr. Hinojosa. Thank you. Mr. Brobeck?
    Mr. Brobeck. All or most of us, I think, need to join 
together behind a very high impact initiative, and I cannot 
think of a more effective initiative than all of us encouraging 
all Americans annually to assess our financial condition and 
take any remedial steps, and to provide the tools and 
encouragement to Americans to perform that assessment.
    Mr. Hinojosa. Thank you.
    Ms. Docking. If I only had one extra dollar, I would spend 
it on getting teachers in the K through 12 curriculum, as well 
as post-secondary, educated on personal finance with continuing 
education.
    Mr. Hinojosa. Thank you.
    Mr. Morial. For this committee and this Congress to lead a 
broad, national partnership between the public, private, and 
not-for-profit sectors to develop a womb-to-tomb system of 
financial education, which has as its goal helping all 
Americans increase their net worth and build assets and close 
the wealth gap.
    Mr. Hinojosa. Thank you. Mr. Duvall?
    Mr. Duvall. Legislation that makes it a mandate that 
personal finance, financial decisionmaking skills will be 
taught in the Nation's schools, K to 12, and then a massive 
program for teacher training and professional development for 
teachers so they can do that.
    Mr. Hinojosa. Thank you. We did it in record time, and so I 
am going to do exactly what I said earlier, Congress is 
powerful and can do whatever they want, I am going to recognize 
Congressman Cleaver so that he can have his 5 minutes.
    [Laughter]
    Mr. Cleaver. Thank you, Mr. Hinojosa. Frankly, the panel 
has already responded to the questions that I had planned to 
ask. And, like you, Mr. Chairman, I appreciate this panel, 
appreciate the fact that the others came, appreciate the 
testimony from this panel. One out of four Americans tragically 
and painfully are unable to lay out for themselves or anyone 
else how they are going to manage their money and most of them 
according to polls, a Nielsen poll, they cannot even tell you 
whether or not they will have extra money at the end of the 
month. And so I appreciate your presence here today and the 
information has been valuable. Thank you.
    Mr. Hinojosa. Thank you. The Chair notes that some members 
may have additional questions for this panel, which they may 
wish to submit in writing. Without objection, the hearing 
record will remain open for 30 days for members to submit 
written questions to these witnesses and to place their 
responses in the record. With that, I declare that this hearing 
is adjourned, and we thank you.
    [Whereupon, at 1:30 p.m., the hearing was adjourned.]

                            A P P E N D I X



                             April 15, 2008
[GRAPHIC] [TIFF OMITTED] 42717.001

[GRAPHIC] [TIFF OMITTED] 42717.002

[GRAPHIC] [TIFF OMITTED] 42717.003

[GRAPHIC] [TIFF OMITTED] 42717.004

[GRAPHIC] [TIFF OMITTED] 42717.005

[GRAPHIC] [TIFF OMITTED] 42717.006

[GRAPHIC] [TIFF OMITTED] 42717.007

[GRAPHIC] [TIFF OMITTED] 42717.008

[GRAPHIC] [TIFF OMITTED] 42717.009

[GRAPHIC] [TIFF OMITTED] 42717.010

[GRAPHIC] [TIFF OMITTED] 42717.011

[GRAPHIC] [TIFF OMITTED] 42717.012

[GRAPHIC] [TIFF OMITTED] 42717.013

[GRAPHIC] [TIFF OMITTED] 42717.014

[GRAPHIC] [TIFF OMITTED] 42717.015

[GRAPHIC] [TIFF OMITTED] 42717.016

[GRAPHIC] [TIFF OMITTED] 42717.017

[GRAPHIC] [TIFF OMITTED] 42717.018

[GRAPHIC] [TIFF OMITTED] 42717.019

[GRAPHIC] [TIFF OMITTED] 42717.020

[GRAPHIC] [TIFF OMITTED] 42717.021

[GRAPHIC] [TIFF OMITTED] 42717.022

[GRAPHIC] [TIFF OMITTED] 42717.023

[GRAPHIC] [TIFF OMITTED] 42717.024

[GRAPHIC] [TIFF OMITTED] 42717.025

[GRAPHIC] [TIFF OMITTED] 42717.026

[GRAPHIC] [TIFF OMITTED] 42717.027

[GRAPHIC] [TIFF OMITTED] 42717.028

[GRAPHIC] [TIFF OMITTED] 42717.029

[GRAPHIC] [TIFF OMITTED] 42717.030

[GRAPHIC] [TIFF OMITTED] 42717.031

[GRAPHIC] [TIFF OMITTED] 42717.032

[GRAPHIC] [TIFF OMITTED] 42717.033

[GRAPHIC] [TIFF OMITTED] 42717.034

[GRAPHIC] [TIFF OMITTED] 42717.035

[GRAPHIC] [TIFF OMITTED] 42717.036

[GRAPHIC] [TIFF OMITTED] 42717.037

[GRAPHIC] [TIFF OMITTED] 42717.038

[GRAPHIC] [TIFF OMITTED] 42717.039

[GRAPHIC] [TIFF OMITTED] 42717.040

[GRAPHIC] [TIFF OMITTED] 42717.041

[GRAPHIC] [TIFF OMITTED] 42717.042

[GRAPHIC] [TIFF OMITTED] 42717.043

[GRAPHIC] [TIFF OMITTED] 42717.044

[GRAPHIC] [TIFF OMITTED] 42717.045

[GRAPHIC] [TIFF OMITTED] 42717.046

[GRAPHIC] [TIFF OMITTED] 42717.047

[GRAPHIC] [TIFF OMITTED] 42717.048

[GRAPHIC] [TIFF OMITTED] 42717.049

[GRAPHIC] [TIFF OMITTED] 42717.050

[GRAPHIC] [TIFF OMITTED] 42717.051

[GRAPHIC] [TIFF OMITTED] 42717.052

[GRAPHIC] [TIFF OMITTED] 42717.053

[GRAPHIC] [TIFF OMITTED] 42717.054

[GRAPHIC] [TIFF OMITTED] 42717.055

[GRAPHIC] [TIFF OMITTED] 42717.056

[GRAPHIC] [TIFF OMITTED] 42717.057

[GRAPHIC] [TIFF OMITTED] 42717.058

[GRAPHIC] [TIFF OMITTED] 42717.059

[GRAPHIC] [TIFF OMITTED] 42717.060

[GRAPHIC] [TIFF OMITTED] 42717.061

[GRAPHIC] [TIFF OMITTED] 42717.062

[GRAPHIC] [TIFF OMITTED] 42717.063

[GRAPHIC] [TIFF OMITTED] 42717.064

[GRAPHIC] [TIFF OMITTED] 42717.065

[GRAPHIC] [TIFF OMITTED] 42717.066

[GRAPHIC] [TIFF OMITTED] 42717.067

[GRAPHIC] [TIFF OMITTED] 42717.068

[GRAPHIC] [TIFF OMITTED] 42717.069

[GRAPHIC] [TIFF OMITTED] 42717.070

[GRAPHIC] [TIFF OMITTED] 42717.071

[GRAPHIC] [TIFF OMITTED] 42717.072

[GRAPHIC] [TIFF OMITTED] 42717.073

[GRAPHIC] [TIFF OMITTED] 42717.074

[GRAPHIC] [TIFF OMITTED] 42717.075

[GRAPHIC] [TIFF OMITTED] 42717.076

[GRAPHIC] [TIFF OMITTED] 42717.077

[GRAPHIC] [TIFF OMITTED] 42717.078

[GRAPHIC] [TIFF OMITTED] 42717.079

[GRAPHIC] [TIFF OMITTED] 42717.080

[GRAPHIC] [TIFF OMITTED] 42717.081

[GRAPHIC] [TIFF OMITTED] 42717.082

[GRAPHIC] [TIFF OMITTED] 42717.083

[GRAPHIC] [TIFF OMITTED] 42717.084

[GRAPHIC] [TIFF OMITTED] 42717.085

[GRAPHIC] [TIFF OMITTED] 42717.086

[GRAPHIC] [TIFF OMITTED] 42717.087

[GRAPHIC] [TIFF OMITTED] 42717.088

[GRAPHIC] [TIFF OMITTED] 42717.089

[GRAPHIC] [TIFF OMITTED] 42717.090

[GRAPHIC] [TIFF OMITTED] 42717.091

[GRAPHIC] [TIFF OMITTED] 42717.092

[GRAPHIC] [TIFF OMITTED] 42717.093

[GRAPHIC] [TIFF OMITTED] 42717.094

[GRAPHIC] [TIFF OMITTED] 42717.095

[GRAPHIC] [TIFF OMITTED] 42717.096

[GRAPHIC] [TIFF OMITTED] 42717.097

[GRAPHIC] [TIFF OMITTED] 42717.098

[GRAPHIC] [TIFF OMITTED] 42717.099

[GRAPHIC] [TIFF OMITTED] 42717.100

[GRAPHIC] [TIFF OMITTED] 42717.101

[GRAPHIC] [TIFF OMITTED] 42717.102

[GRAPHIC] [TIFF OMITTED] 42717.103

[GRAPHIC] [TIFF OMITTED] 42717.104

[GRAPHIC] [TIFF OMITTED] 42717.105

[GRAPHIC] [TIFF OMITTED] 42717.106

[GRAPHIC] [TIFF OMITTED] 42717.107

[GRAPHIC] [TIFF OMITTED] 42717.108

[GRAPHIC] [TIFF OMITTED] 42717.109

[GRAPHIC] [TIFF OMITTED] 42717.110

[GRAPHIC] [TIFF OMITTED] 42717.111

[GRAPHIC] [TIFF OMITTED] 42717.112

[GRAPHIC] [TIFF OMITTED] 42717.113

[GRAPHIC] [TIFF OMITTED] 42717.114

[GRAPHIC] [TIFF OMITTED] 42717.115

[GRAPHIC] [TIFF OMITTED] 42717.116

[GRAPHIC] [TIFF OMITTED] 42717.117

[GRAPHIC] [TIFF OMITTED] 42717.118

[GRAPHIC] [TIFF OMITTED] 42717.119

[GRAPHIC] [TIFF OMITTED] 42717.120

[GRAPHIC] [TIFF OMITTED] 42717.121

[GRAPHIC] [TIFF OMITTED] 42717.122

[GRAPHIC] [TIFF OMITTED] 42717.123

[GRAPHIC] [TIFF OMITTED] 42717.124

[GRAPHIC] [TIFF OMITTED] 42717.125

[GRAPHIC] [TIFF OMITTED] 42717.126

[GRAPHIC] [TIFF OMITTED] 42717.127

[GRAPHIC] [TIFF OMITTED] 42717.128

[GRAPHIC] [TIFF OMITTED] 42717.129

[GRAPHIC] [TIFF OMITTED] 42717.130

[GRAPHIC] [TIFF OMITTED] 42717.131

[GRAPHIC] [TIFF OMITTED] 42717.132

[GRAPHIC] [TIFF OMITTED] 42717.133

[GRAPHIC] [TIFF OMITTED] 42717.134

[GRAPHIC] [TIFF OMITTED] 42717.135

[GRAPHIC] [TIFF OMITTED] 42717.136

[GRAPHIC] [TIFF OMITTED] 42717.137

[GRAPHIC] [TIFF OMITTED] 42717.138

[GRAPHIC] [TIFF OMITTED] 42717.139

[GRAPHIC] [TIFF OMITTED] 42717.140

[GRAPHIC] [TIFF OMITTED] 42717.141

[GRAPHIC] [TIFF OMITTED] 42717.142

[GRAPHIC] [TIFF OMITTED] 42717.143

[GRAPHIC] [TIFF OMITTED] 42717.144

[GRAPHIC] [TIFF OMITTED] 42717.145

[GRAPHIC] [TIFF OMITTED] 42717.146

[GRAPHIC] [TIFF OMITTED] 42717.147

[GRAPHIC] [TIFF OMITTED] 42717.148

[GRAPHIC] [TIFF OMITTED] 42717.149

[GRAPHIC] [TIFF OMITTED] 42717.150

[GRAPHIC] [TIFF OMITTED] 42717.151

[GRAPHIC] [TIFF OMITTED] 42717.152

[GRAPHIC] [TIFF OMITTED] 42717.153

[GRAPHIC] [TIFF OMITTED] 42717.154

[GRAPHIC] [TIFF OMITTED] 42717.155

[GRAPHIC] [TIFF OMITTED] 42717.156

[GRAPHIC] [TIFF OMITTED] 42717.157

[GRAPHIC] [TIFF OMITTED] 42717.158

[GRAPHIC] [TIFF OMITTED] 42717.159

[GRAPHIC] [TIFF OMITTED] 42717.160

[GRAPHIC] [TIFF OMITTED] 42717.161

[GRAPHIC] [TIFF OMITTED] 42717.162

[GRAPHIC] [TIFF OMITTED] 42717.163

[GRAPHIC] [TIFF OMITTED] 42717.164

[GRAPHIC] [TIFF OMITTED] 42717.165

[GRAPHIC] [TIFF OMITTED] 42717.166

[GRAPHIC] [TIFF OMITTED] 42717.167

[GRAPHIC] [TIFF OMITTED] 42717.168

[GRAPHIC] [TIFF OMITTED] 42717.169

[GRAPHIC] [TIFF OMITTED] 42717.170

[GRAPHIC] [TIFF OMITTED] 42717.171

[GRAPHIC] [TIFF OMITTED] 42717.172

[GRAPHIC] [TIFF OMITTED] 42717.173

[GRAPHIC] [TIFF OMITTED] 42717.174

[GRAPHIC] [TIFF OMITTED] 42717.175

[GRAPHIC] [TIFF OMITTED] 42717.176

[GRAPHIC] [TIFF OMITTED] 42717.177

[GRAPHIC] [TIFF OMITTED] 42717.178

[GRAPHIC] [TIFF OMITTED] 42717.179

[GRAPHIC] [TIFF OMITTED] 42717.180

[GRAPHIC] [TIFF OMITTED] 42717.181

[GRAPHIC] [TIFF OMITTED] 42717.182

[GRAPHIC] [TIFF OMITTED] 42717.183

[GRAPHIC] [TIFF OMITTED] 42717.184

[GRAPHIC] [TIFF OMITTED] 42717.185

[GRAPHIC] [TIFF OMITTED] 42717.186

[GRAPHIC] [TIFF OMITTED] 42717.187

[GRAPHIC] [TIFF OMITTED] 42717.188

[GRAPHIC] [TIFF OMITTED] 42717.189

[GRAPHIC] [TIFF OMITTED] 42717.190

[GRAPHIC] [TIFF OMITTED] 42717.191

[GRAPHIC] [TIFF OMITTED] 42717.192

[GRAPHIC] [TIFF OMITTED] 42717.193

[GRAPHIC] [TIFF OMITTED] 42717.194

[GRAPHIC] [TIFF OMITTED] 42717.195

[GRAPHIC] [TIFF OMITTED] 42717.196

[GRAPHIC] [TIFF OMITTED] 42717.197

[GRAPHIC] [TIFF OMITTED] 42717.198

[GRAPHIC] [TIFF OMITTED] 42717.199

[GRAPHIC] [TIFF OMITTED] 42717.200

[GRAPHIC] [TIFF OMITTED] 42717.201

[GRAPHIC] [TIFF OMITTED] 42717.202

[GRAPHIC] [TIFF OMITTED] 42717.203

[GRAPHIC] [TIFF OMITTED] 42717.204

[GRAPHIC] [TIFF OMITTED] 42717.205

[GRAPHIC] [TIFF OMITTED] 42717.206

[GRAPHIC] [TIFF OMITTED] 42717.207

[GRAPHIC] [TIFF OMITTED] 42717.208

[GRAPHIC] [TIFF OMITTED] 42717.209

[GRAPHIC] [TIFF OMITTED] 42717.210

[GRAPHIC] [TIFF OMITTED] 42717.211

[GRAPHIC] [TIFF OMITTED] 42717.212

[GRAPHIC] [TIFF OMITTED] 42717.213

[GRAPHIC] [TIFF OMITTED] 42717.214

[GRAPHIC] [TIFF OMITTED] 42717.215

[GRAPHIC] [TIFF OMITTED] 42717.216

[GRAPHIC] [TIFF OMITTED] 42717.217

[GRAPHIC] [TIFF OMITTED] 42717.218

[GRAPHIC] [TIFF OMITTED] 42717.219

[GRAPHIC] [TIFF OMITTED] 42717.220

[GRAPHIC] [TIFF OMITTED] 42717.221

[GRAPHIC] [TIFF OMITTED] 42717.222

[GRAPHIC] [TIFF OMITTED] 42717.223

[GRAPHIC] [TIFF OMITTED] 42717.224

[GRAPHIC] [TIFF OMITTED] 42717.225

[GRAPHIC] [TIFF OMITTED] 42717.226

[GRAPHIC] [TIFF OMITTED] 42717.227

[GRAPHIC] [TIFF OMITTED] 42717.228

[GRAPHIC] [TIFF OMITTED] 42717.229

[GRAPHIC] [TIFF OMITTED] 42717.230

[GRAPHIC] [TIFF OMITTED] 42717.231

[GRAPHIC] [TIFF OMITTED] 42717.232

[GRAPHIC] [TIFF OMITTED] 42717.233

[GRAPHIC] [TIFF OMITTED] 42717.234

[GRAPHIC] [TIFF OMITTED] 42717.235

[GRAPHIC] [TIFF OMITTED] 42717.236

[GRAPHIC] [TIFF OMITTED] 42717.237

[GRAPHIC] [TIFF OMITTED] 42717.238

[GRAPHIC] [TIFF OMITTED] 42717.239

[GRAPHIC] [TIFF OMITTED] 42717.240

[GRAPHIC] [TIFF OMITTED] 42717.241

[GRAPHIC] [TIFF OMITTED] 42717.242

[GRAPHIC] [TIFF OMITTED] 42717.243

[GRAPHIC] [TIFF OMITTED] 42717.244

[GRAPHIC] [TIFF OMITTED] 42717.245

[GRAPHIC] [TIFF OMITTED] 42717.246

[GRAPHIC] [TIFF OMITTED] 42717.247

[GRAPHIC] [TIFF OMITTED] 42717.248

[GRAPHIC] [TIFF OMITTED] 42717.249

[GRAPHIC] [TIFF OMITTED] 42717.250

[GRAPHIC] [TIFF OMITTED] 42717.251

[GRAPHIC] [TIFF OMITTED] 42717.252

[GRAPHIC] [TIFF OMITTED] 42717.253

[GRAPHIC] [TIFF OMITTED] 42717.254

[GRAPHIC] [TIFF OMITTED] 42717.255

[GRAPHIC] [TIFF OMITTED] 42717.256

[GRAPHIC] [TIFF OMITTED] 42717.257

[GRAPHIC] [TIFF OMITTED] 42717.258

[GRAPHIC] [TIFF OMITTED] 42717.259

[GRAPHIC] [TIFF OMITTED] 42717.260

[GRAPHIC] [TIFF OMITTED] 42717.261

[GRAPHIC] [TIFF OMITTED] 42717.262

[GRAPHIC] [TIFF OMITTED] 42717.263

[GRAPHIC] [TIFF OMITTED] 42717.264

[GRAPHIC] [TIFF OMITTED] 42717.265

[GRAPHIC] [TIFF OMITTED] 42717.266

[GRAPHIC] [TIFF OMITTED] 42717.267

[GRAPHIC] [TIFF OMITTED] 42717.268

[GRAPHIC] [TIFF OMITTED] 42717.269

[GRAPHIC] [TIFF OMITTED] 42717.270

[GRAPHIC] [TIFF OMITTED] 42717.271

[GRAPHIC] [TIFF OMITTED] 42717.272

[GRAPHIC] [TIFF OMITTED] 42717.273

[GRAPHIC] [TIFF OMITTED] 42717.274

[GRAPHIC] [TIFF OMITTED] 42717.275

[GRAPHIC] [TIFF OMITTED] 42717.276

[GRAPHIC] [TIFF OMITTED] 42717.277

[GRAPHIC] [TIFF OMITTED] 42717.278

[GRAPHIC] [TIFF OMITTED] 42717.279

[GRAPHIC] [TIFF OMITTED] 42717.280

[GRAPHIC] [TIFF OMITTED] 42717.281

[GRAPHIC] [TIFF OMITTED] 42717.282

[GRAPHIC] [TIFF OMITTED] 42717.283

[GRAPHIC] [TIFF OMITTED] 42717.284

[GRAPHIC] [TIFF OMITTED] 42717.285

[GRAPHIC] [TIFF OMITTED] 42717.286

[GRAPHIC] [TIFF OMITTED] 42717.287

[GRAPHIC] [TIFF OMITTED] 42717.288

[GRAPHIC] [TIFF OMITTED] 42717.289

[GRAPHIC] [TIFF OMITTED] 42717.290

[GRAPHIC] [TIFF OMITTED] 42717.291

[GRAPHIC] [TIFF OMITTED] 42717.292

[GRAPHIC] [TIFF OMITTED] 42717.293

[GRAPHIC] [TIFF OMITTED] 42717.294

[GRAPHIC] [TIFF OMITTED] 42717.295

[GRAPHIC] [TIFF OMITTED] 42717.296

[GRAPHIC] [TIFF OMITTED] 42717.297

[GRAPHIC] [TIFF OMITTED] 42717.298

[GRAPHIC] [TIFF OMITTED] 42717.299

[GRAPHIC] [TIFF OMITTED] 42717.300

[GRAPHIC] [TIFF OMITTED] 42717.301

[GRAPHIC] [TIFF OMITTED] 42717.302

[GRAPHIC] [TIFF OMITTED] 42717.303

[GRAPHIC] [TIFF OMITTED] 42717.304

[GRAPHIC] [TIFF OMITTED] 42717.305

[GRAPHIC] [TIFF OMITTED] 42717.306

[GRAPHIC] [TIFF OMITTED] 42717.307

[GRAPHIC] [TIFF OMITTED] 42717.308

[GRAPHIC] [TIFF OMITTED] 42717.309

[GRAPHIC] [TIFF OMITTED] 42717.310

[GRAPHIC] [TIFF OMITTED] 42717.311

[GRAPHIC] [TIFF OMITTED] 42717.312

[GRAPHIC] [TIFF OMITTED] 42717.313

[GRAPHIC] [TIFF OMITTED] 42717.314

[GRAPHIC] [TIFF OMITTED] 42717.315

[GRAPHIC] [TIFF OMITTED] 42717.316

[GRAPHIC] [TIFF OMITTED] 42717.317

[GRAPHIC] [TIFF OMITTED] 42717.318

[GRAPHIC] [TIFF OMITTED] 42717.319

[GRAPHIC] [TIFF OMITTED] 42717.320

[GRAPHIC] [TIFF OMITTED] 42717.321

[GRAPHIC] [TIFF OMITTED] 42717.322

[GRAPHIC] [TIFF OMITTED] 42717.323

[GRAPHIC] [TIFF OMITTED] 42717.324

[GRAPHIC] [TIFF OMITTED] 42717.325

[GRAPHIC] [TIFF OMITTED] 42717.326

[GRAPHIC] [TIFF OMITTED] 42717.327

[GRAPHIC] [TIFF OMITTED] 42717.328

[GRAPHIC] [TIFF OMITTED] 42717.329

[GRAPHIC] [TIFF OMITTED] 42717.330

[GRAPHIC] [TIFF OMITTED] 42717.331

[GRAPHIC] [TIFF OMITTED] 42717.332

[GRAPHIC] [TIFF OMITTED] 42717.333

[GRAPHIC] [TIFF OMITTED] 42717.334

[GRAPHIC] [TIFF OMITTED] 42717.335

[GRAPHIC] [TIFF OMITTED] 42717.336

[GRAPHIC] [TIFF OMITTED] 42717.337

[GRAPHIC] [TIFF OMITTED] 42717.338

[GRAPHIC] [TIFF OMITTED] 42717.339

[GRAPHIC] [TIFF OMITTED] 42717.340

[GRAPHIC] [TIFF OMITTED] 42717.341

[GRAPHIC] [TIFF OMITTED] 42717.342

[GRAPHIC] [TIFF OMITTED] 42717.343

[GRAPHIC] [TIFF OMITTED] 42717.344

[GRAPHIC] [TIFF OMITTED] 42717.345

[GRAPHIC] [TIFF OMITTED] 42717.346

[GRAPHIC] [TIFF OMITTED] 42717.347

[GRAPHIC] [TIFF OMITTED] 42717.348

[GRAPHIC] [TIFF OMITTED] 42717.349

[GRAPHIC] [TIFF OMITTED] 42717.350

[GRAPHIC] [TIFF OMITTED] 42717.351

[GRAPHIC] [TIFF OMITTED] 42717.352

[GRAPHIC] [TIFF OMITTED] 42717.353

[GRAPHIC] [TIFF OMITTED] 42717.354

[GRAPHIC] [TIFF OMITTED] 42717.355

[GRAPHIC] [TIFF OMITTED] 42717.356

[GRAPHIC] [TIFF OMITTED] 42717.357

[GRAPHIC] [TIFF OMITTED] 42717.358

[GRAPHIC] [TIFF OMITTED] 42717.359

[GRAPHIC] [TIFF OMITTED] 42717.360

[GRAPHIC] [TIFF OMITTED] 42717.361

[GRAPHIC] [TIFF OMITTED] 42717.362

[GRAPHIC] [TIFF OMITTED] 42717.363

[GRAPHIC] [TIFF OMITTED] 42717.364

[GRAPHIC] [TIFF OMITTED] 42717.365

[GRAPHIC] [TIFF OMITTED] 42717.366

[GRAPHIC] [TIFF OMITTED] 42717.367

[GRAPHIC] [TIFF OMITTED] 42717.368

[GRAPHIC] [TIFF OMITTED] 42717.369

[GRAPHIC] [TIFF OMITTED] 42717.370

[GRAPHIC] [TIFF OMITTED] 42717.371

[GRAPHIC] [TIFF OMITTED] 42717.372

[GRAPHIC] [TIFF OMITTED] 42717.373

[GRAPHIC] [TIFF OMITTED] 42717.374

[GRAPHIC] [TIFF OMITTED] 42717.375

[GRAPHIC] [TIFF OMITTED] 42717.376

[GRAPHIC] [TIFF OMITTED] 42717.377

[GRAPHIC] [TIFF OMITTED] 42717.378

[GRAPHIC] [TIFF OMITTED] 42717.379

[GRAPHIC] [TIFF OMITTED] 42717.380

[GRAPHIC] [TIFF OMITTED] 42717.381

[GRAPHIC] [TIFF OMITTED] 42717.382

[GRAPHIC] [TIFF OMITTED] 42717.383

[GRAPHIC] [TIFF OMITTED] 42717.384

[GRAPHIC] [TIFF OMITTED] 42717.385

[GRAPHIC] [TIFF OMITTED] 42717.386

[GRAPHIC] [TIFF OMITTED] 42717.387

