[Congressional Record Volume 151, Number 38 (Wednesday, April 6, 2005)]
[House]
[Pages H1797-H1802]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
SUPPORTING THE GOALS AND IDEALS OF FINANCIAL LITERACY MONTH
Mr. GUTKNECHT. Mr. Speaker, I move to suspend the rules and agree to
the resolution (H. Res. 148) supporting the goals and ideals of
Financial Literacy Month, and for other purposes.
The Clerk read as follows:
H. Res. 148
Whereas the financial services industry in the United
States benefits millions of people in the United States,
providing products and services that allow individuals and
families to build homes, buy cars, finance educations, start
businesses, and meet everyday needs;
Whereas personal financial education is essential to ensure
that individuals are prepared to manage money, credit, and
debt, and become responsible workers, heads of households,
investors, entrepreneurs, business leaders, and citizens, yet
a study completed in 2004 by the Jump$tart Coalition for
Personal Financial Literacy found that high school seniors
know less about principles of basic personal finance than did
high school seniors 7 years earlier;
[[Page H1798]]
Whereas financial education has been linked to lower
delinquency rates for mortgage borrowers, higher
participation and contribution rates in retirement plans,
improved spending and saving habits, higher net worth, and
positive knowledge, attitude, and behavior changes, yet a
2004 survey completed by the National Council on Economic
Education found that the number of States that include
personal finance in education standards for students in
kindergarten through high school has improved since 2002 but
still falls below 2000 levels;
Whereas expanding access to the mainstream financial system
provides individuals with lower-cost and safer options for
managing finances and building wealth and is likely to lead
to increased economic activity and growth, yet studies show
that as many as 10 million households in the United States
are ``unbanked'' or are without access to mainstream bank
products and services;
Whereas personal financial management skills and lifelong
habits develop during childhood, and 55 percent of college
students acquire their first credit card during their first
year in college, and 92 percent of college students acquire
at least one credit card by their second year in college, yet
only 26 percent of people between the ages of 13 and 21
reported that their parents actively taught them how to
manage money;
Whereas although more than 42,000,000 people in the United
States participate in qualified cash or deferred arrangements
described in section 401(k) of the Internal Revenue Code of
1986 (commonly referred to as ``401(k) plans''), a Retirement
Confidence Survey conducted in 2004 found that only 42
percent of workers surveyed have calculated how much money
they will need to save for retirement and 4 in 10 workers say
that they are not currently saving for retirement;
Whereas personal savings as a percentage of personal income
decreased from 7.5 percent in the early 1980s to 1.1 percent
in the last two quarters of 2004;
Whereas Congress sought to implement a national strategy
for coordination of Federal financial literacy efforts
through the establishment of the Financial Literacy and
Education Commission (FLEC) in 2003, the designation of the
Office of Financial Education of the Department of the
Treasury to provide support for the Commission, and
requirements that the Commission's materials, website, toll-
free hotline, and national multimedia campaign be
multilingual;
Whereas Members of the United States House of
Representatives established the Financial and Economic
Literacy Caucus (FELC) in February 2005 to (1) provide a
forum for interested Members of Congress to work in
collaboration with the Financial Literacy and Education
Commission, (2) highlight public and private sector best-
practices, and (3) organize and promote financial literacy
legislation, seminars and events, such as ``Financial
Literacy Month'' in April 2005 and the annual ``Financial
Literacy Day'' fair on April 27, 2005; and
Whereas the National Council on Economic Education, its
State Councils and Centers for Economic Education, the
Jump$tart Coalition for Personal Financial Literacy, its
State affiliates, and its partner organizations have
designated April as `Financial Literacy Month' to educate the
public about the need for increased financial literacy for
youth and adults in the United States: Now, therefore, be it
Resolved, That the House of Representatives--
(1) supports the goals and ideals of Financial Literacy
Month; and
(2) requests that the President issue a proclamation
calling on the Federal Government, States, localities,
schools, nonprofit organizations, businesses, other entities,
and the people of the United States to observe the month with
appropriate programs and activities.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Minnesota (Mr. Gutknecht) and the gentleman from Illinois (Mr. Davis)
each will control 20 minutes.
The Chair recognizes the gentleman from Minnesota (Mr. Gutknecht).
General Leave
Mr. GUTKNECHT. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks and include extraneous material on H. Res. 148.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Minnesota?
There was no objection.
Mr. GUTKNECHT. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, as a member of the Committee on Government Reform, I am
pleased to call up House Resolution 148 for consideration. This
valuable resolution supports the goals and ideals of Financial Literacy
Month, and its purpose is to increase awareness of the significance of
well-planned personal financial management. I strongly support this
goal, and I encourage my colleagues to join me in support of this
important resolution.
Mr. Speaker, it can be overwhelming for Americans of any age to
establish and manage income, savings, and credit. But learning simple
financial principles can help protect against illness or disability,
long-term losses of unemployment, and other aspects of life that most
of us will experience at one time or another.
Mr. Speaker, the resolution cites that over the last 20 years,
personal savings have decreased from about 7.5 percent of personal
income during the 1980s to only 1.1 percent in the last two quarters of
2004. This, I am afraid, shows the dangerous reality that unfortunately
Americans are relying too much on credit and many are spending beyond
their means.
Most Americans and their families will experience lean financial
times sometime during their lives. That is why the message of this
resolution is so important and why we need to encourage schools to
teach our young people the principles of personal finance at early
ages.
Life is uncertain, and jobs change. Family circumstances and
macroeconomic instability can affect every one of us. But we as a
Nation can be confident that we will ultimately enjoy big returns on
our investments in financial literacy.
Mr. Speaker, several important groups, including the National Center
on Economic Education, the Jump$tart Coalition For Personal Financial
Literacy and their partner organizations consider April to be Financial
Literacy Month. Consistent with this designation, today I am pleased to
join with my distinguished colleague, the gentlewoman from Illinois
(Mrs. Biggert), to sponsor this legislation in supporting financial
literacy. I urge all Members to vote in favor of the adoption of this
resolution.
Mr. Speaker, I reserve the balance of my time.
Mr. DAVIS of Illinois. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, financial literacy may be more important today than
during any other time in our Nation's history. That is why I am pleased
to support H. Res. 148, introduced by the gentlewoman from the Great
State of Illinois (Mrs. Biggert), which supports the goals of Financial
Literacy Month for Youth.
As the resolution notes, a study by the Jump$tart Coalition for
Personal Financial Literacy found that 92 percent of college students
have at least one credit card by their sophomore year. This fact
becomes alarming when you consider that the same study found that only
26 percent of people between the ages of 13 and 21 claimed that they
had been taught how to manage their money by their parents. This
resolution serves as an important wake-up call for all of us: the
administration, Congress, and the American taxpayer.
As the economy begins to rebound from an arduous period, now is an
opportune time to teach all Americans, young and old, about fiscal
responsibility. The Jump$tart Coalition's aim is to identify personal
finance materials for educating our youth. To that end, they have
established 12 must-know personal finance principles for young people
if they want to improve their financial future.
The 12 financial principles stressed during Financial Literacy Month
for youth are, one, map your financial future; do not expect something
for nothing; high returns equal high risk; know your take-home pay;
compare interest rates; pay yourself first; money doubles by the rule
of 72, which is a way of determining how long it takes your money to
double while in the bank; your credit past is your credit future; start
saving young; stay insured; budget your money; and do not borrow what
you cannot repay.
These important, but basic, principles are of value to all of us. But
let me add one more, since the 15th is not too far away: pay your
taxes, and on time.
Mr. Speaker, I am pleased to endorse this resolution supporting the
goals of Financial Literacy for Youth Month and urge all of my
colleagues to support it as well. As a matter of fact, my mother used
to tell us that if you take care of your nickels, then your quarters
will take care of themselves.
Mr. Speaker, I reserve the balance of my time.
Mr. GUTKNECHT. Mr. Speaker, I yield myself such time as I may
consume.
[[Page H1799]]
Mr. Speaker, I thank the gentleman from Illinois for his support for
this important resolution, and I thank him for his wit and wisdom.
Madam Speaker, at this time I am pleased to yield such time as she
may consume to the gentlewoman from Illinois (Mrs. Biggert), the author
of this resolution.
Mrs. BIGGERT. Madam Speaker, I thank the gentleman from Minnesota for
yielding me time and for cosponsoring this resolution and for his
advocacy for financial literacy.
Madam Speaker, I rise today in strong support of House Resolution
148, which my colleague, the gentleman from Texas (Mr. Hinojosa), and I
introduced for a second year to designate April as Financial Literacy
Month. We did this once again to raise public awareness about the
importance of financial education in the United States and the serious
consequences that come when young people, adults, and older Americans
lack basic understanding of personal finance and economics.
{time} 1330
Madam Speaker, ours is a compelling case, and I know that many
Members of the House who cosponsored this resolution agree that our
country is in a financial literacy deficit. The most recent statistics
indicate that most of our States do not require schools to have
financial literacy programs, and 7 out of 10 of our children and
grandchildren failed a basic financial literacy exam.
The numbers look equally bad for young and older adults. Studies show
that almost all of our Nation's college students have a credit card by
the second year of college, but only about a quarter report that their
parents actively taught them how to manage money. The number of
bankruptcies remains at a historic high. Over 1.6 million bankruptcy
cases were filed in 2004.
And we all know Social Security will soon reach a juncture, and now
is the time for us to encourage our children and young and older adults
to embrace learning about finance and economics and engage in good
budget and long-term savings habits.
Abraham Lincoln, one of our most beloved Presidents and fellow
Illinoisan, once said, ``You cannot escape the responsibility of
tomorrow by evading it today,'' and I agree. We should help our
citizens avoid getting caught in a credit quagmire, stay out of
bankruptcy court, and steer clear of a financially unsound retirement.
I believe that we need to encourage all Americans to take ownership
over their finances, to be financially astute, and establish financial
security now. Now is the time.
I pledge to continue to promote financial and economic education, and
I know that I am joined by an army of supporters here on the Hill and
across the country. In recent years, the Congress, Federal agencies,
State and local governments, schools, the private sector, not-for-
profit and for-profit groups have worked hard and made incremental
strides toward improving the financial aptitude of Americans of all
ages and walks of life. However, there is so much more that we can and
must do to turn the tide.
Many States have implemented outstanding financial literacy programs
for children. In my home State of Illinois, State Treasurer Judy Baar
Topinka created the Bank At School program which helps children learn
the fundamentals of money management through the operation of an in-
school bank. Schools are partnering with financial institutions which
conduct a monthly Bank Day at the school where students open savings
accounts and make regular deposits.
I believe that programs like this will provide the guidance that is
desperately needed; but we do need to do more. We need to coordinate
our programs. We need to improve America's financial report card, and
we need to encourage financially sound behavior.
In Congress we catapulted the Financial Literacy Movement into action
when we passed the Fair and Accurate Credit Transactions Act. This act
established the Financial Literacy and Education Commission, which has
made great strides since its first meeting in 2004. They have
established a Website, mymoney.gov., and are in the process of
developing a national strategy.
While the Commission's work to date has been commendable, some of us
in Congress thought that we ought to do more. That is why in February,
the gentleman from Texas (Mr. Hinojosa) and I formed the Financial and
Economic Literacy Caucus. The caucus currently has 45 Members with 23
Republicans, 21 Democrats, and 1 Independent. We all agree that
financial literacy is a national priority, and our goal is to bring
together interested parties and participants at the national, State,
and local levels to establish best practices and to promote financial
and economic literacy on Capitol Hill, at home in our districts and,
eventually, around the world.
We are forming an ambitious agenda for the weeks and months to come.
On April 27 we will host our first Financial Literacy Fair in the House
Cannon Caucus Room. I would encourage everyone to attend the fair. Our
caucus also aims to establish a Website, provide a focal point in
working with the Senate and executive branch, including the Commission,
and showcase all of the great programs that have been launched in the
business, education, and not-for-profit communities.
Today I encourage all Members of the House to join the caucus and
work with us to educate Americans about finance and economics.
Madam Speaker, the state of financial literacy among our citizens may
not garner much in the way of headlines, but it is an issue nonetheless
that should command our attention. While it is a problem that is
serious and urgent, it is one that can be solved through education.
That is why I urge my colleagues to support this resolution in support
of financial literacy. It is our duty to help our citizens of all ages
and walks of life to succeed in today's increasingly sophisticated
world of finance.
I want to thank my distinguished colleague and friend, the gentleman
from Texas (Mr. Hinojosa), for his strong support and sponsorship of
this resolution. I would also like to thank the chairman of the
Committee on Government Reform, the gentleman from Virginia (Mr.
Davis), for being a cosponsor of this resolution and moving it through
his committee. I would especially like to thank the gentleman from
Minnesota (Mr. Gutknecht) and the gentleman from Illinois (Mr. Davis),
also members of the Committee on Government Reform, for managing this
resolution. I would also like to thank the distinguished gentlewoman
from Ohio (Ms. Pryce) for her support of the resolution and dedication
to this initiative.
In conclusion, I would like to thank all of the Members who
cosponsored this resolution for their support.
Mr. DAVIS of Illinois. Madam Speaker, it is my pleasure to yield such
time as he might consume to the gentleman from Texas (Mr. Hinojosa),
the cosponsor of this resolution.
(Mr. HINOJOSA asked and was given permission to revise and extend his
remarks, and include extraneous material.)
Mr. HINOJOSA. Madam Speaker, I rise in support of House Resolution
148 that the gentlewoman from Illinois (Mrs. Biggert) and I introduced
earlier this year. The legislation supports the ideals and the goals of
Financial Literacy Month, which falls in April of each year.
Before I proceed, I want to take this opportunity to thank the
gentlewoman from Virginia (Mrs. Jo Ann Davis), the chairman of the
Subcommittee on Civil Service, and especially my Ranking Member, the
gentleman from Illinois (Mr. Danny Davis). Also, I would like to
recognize and thank Tania Shand on the minority staff for helping
expedite committee consideration of our bill. My distinguished
colleague, the gentleman from Illinois (Mr. Davis), has always been a
strong supporter of economic education and financial literacy, and I
want to thank him for managing the bill today for our side of the
aisle.
The gentlewoman from Illinois (Mrs. Biggert) and I have also worked
closely on financial literacy issues with the gentleman from California
(Mr. Dreier), the chairman of the House Committee on Rules. I think all
of us owe him a great deal of gratitude for being one of the first
Members of Congress to call for bringing attention to the need to
improve financial literacy rates.
[[Page H1800]]
To celebrate Financial Literacy Month, a Financial Literacy Day Fair
will be held April 27 from noon to 4 p.m. in the Cannon Caucus Room. I
join my friend, the gentlewoman from Illinois (Mrs. Biggert), in
encouraging all of our colleagues and their staffs to attend this
event.
Every day, consumers deal with money, from balancing a checking
account to shopping for a mortgage or auto loan, researching ways to
pay for a college education, checking credit card statements, saving
money for retirement, understanding a credit report, or simply deciding
whether to pay cash or charge a purchase. The list goes on and on, but
many consumers do not really understand their finances.
In 2004, reports from Jump$tart and the National Council on Economic
Education, the Schwab Foundation and others indicated that almost 66
percent of high school students failed a basic financial literacy exam.
The numbers are not much better for adults. High bankruptcy rates,
increased credit card debt, and identity theft make it imperative that
all of us take an active role in providing financial and economic
education during all stages of one's life.
On February 15, 2005, I cofounded, and currently cochair, the
Congressional Hispanic and Economic Literacy Caucus with the
gentlewoman from Illinois (Mrs. Biggert). The caucus seeks to address
these issues head on by increasing public awareness of poor financial
literacy rates, and will work to improve those rates. The caucus will
provide a forum for my colleagues to promote policies that advance
financial literacy and economic education. It is my hope that through
the Financial and Economic Literacy Caucus, we can further educate
Americans about financial and economic topics ranging from
homeownership to credit ratings and, yes, insurance.
At this point, Madam Speaker, I will insert for the Record letters
and press releases supporting passage of this resolution. They include
a press release from the National Association of Mortgage Brokers and a
letter of support from Merrill Lynch. I would also insert letters
supporting the creation of the Financial and Economic Literacy Caucus
be included in the Record. They include a statement by Treasury Deputy
Assistant Secretary Dan Iannicola, a release by the National Council on
Economic Education, a letter of support from Junior Achievement, a
press release from the Investment Company Institute, a statement from
the North American Securities Administrators Association, and a
statement by the Savings Coalition of America, and I have them all
included here.
National Association of Mortgage Brokers Applauds Resolution Declaring
April ``Financial Literacy Month''
McLean, VA--The National Association of Mortgage Brokers
(NAMB) supports the bi-partisan resolution passed by the U.S.
House of Representatives today designating April as
``Financial Literacy Month.''
``We commend Reps. Judy Biggert (R-IL) and Ruben Hinojosa
(D-TX) for introducing a resolution that calls for the
federal government, states, local governments, schools,
businesses and other groups to observe Financial Literacy
Month,'' said NAMB President Bob Armbruster. ``Financial
education is important for today's consumers who face a
complex array of financial products and services.''
NAMB works closely with the financial services industry as
part of its on-going commitment to consumer education. NAMB
has a long history of promoting consumer financial education.
Last year, for example, NABM initiated a pilot consumer
credit education program using Freddie Mac's CreditSmart
' and CreditSmart ' Espanol financial
literacy curricula. The pilot is currently being managed by
NAMB state affiliates in California, Florida and Texas.
NAMB also has partnered with United Guaranty to create a
consumer information presentation--``Are You Prepared to Head
Down the Road to Homeownership? '''--to help
educate minorities, immigrants and low-to-moderate income
households on the home-buying process. The presentation
covers common home mortgage terminology, important steps in
the home-buying process, fair housing laws, credit reports
and more.
``For consumers, financial education is essential to
protecting oneself against fraud or abusive financial
practices and this education process should begin at a young
age, with some targeted curriculum in our high schools,''
adds Armbruster. ``The more consumers know, the better they
are at managing their finances.''
For more information visit NAMB's consumer home page on the
NAMB Web site, www.namb.org.
____
Merrill Lynch,
Washington, DC, April 5, 2005.
Hon. Ruben Hinojosa,
House of Representatives,
Washington, DC.
Dear Mr. Hinojosa: Merrill Lynch strongly supports the
formation of the Financial and Economic Literacy Caucus and
applauds the efforts of Representative Judy Biggert and
yourself in addressing this important issue.
Merrill Lynch has long shared the Caucus' goal of improving
financial literacy for all Americans at all stages of life.
The Merrill Lynch Investing Pays Off ' (IPO)
curriculum has been specially developed as a tool for
volunteers, parents and educators and is designed to be an
enjoyable program that will bring to life important concepts
and information that all young people need to know. The
curriculum has been designed in three stages for ages
spanning 7 to 18.
Merrill Lynch has also launched a financial education
program for Girl Scouts in the Greater New York area. Girl
Scouts in the region will use the IPO curriculum during troop
meetings and educational programs to develop their
entrepreneurial skills and increase their financial
knowledge.
The Merrill Lynch IPO program partnered with Sesame
Workshop in using Sesame Street character Elmo to bring
financial education to children ages 3 to 6 and their
parents, through an interactive website and an activity book
in English and Spanish.
Merrill Lynch strongly supports your efforts to increase
public awareness of poor literacy rates across the country
and work toward improving those rates
Sincerely,
Bruce E. Thompson, Jr.,
First Vice President.
____
Statement of Deputy Assistant Secretary for Financial Education Dan
Iannicola, Jr. on the Financial and Economic Literacy Caucus
This Department of Treasury press release may be viewed at:
http://www.treas.gov/press/releases/js2254.htm
Today's formation of the Financial and Economic Literacy
Caucus is an important step in the federal effort to promote
personal economic security through financial education. I
commend Representatives Judy Biggert and Ruben Hinojosa for
their efforts to provide Americans with the education
resources they need to achieve their financial goals. I look
forward to partnering with the caucus to advance Treasury's
commitment to ensuring that Americans learn more about their
finances and, in so doing, live better lives.
____
NCEE Applauds Launch of ``Financial and Economic Literacy Caucus''
The National Council on Economic Education (NCEE) is
offering its full support for the newly formed House
``Financial and Economic Literacy Caucus.'' On Tuesday,
February 15, Representatives Judy Biggert (R-IL) and Ruben
Hinojosa (D-TX) announced the formation of this bipartisan
congressional organization. The Caucus will help organize
legislative efforts and policy initiatives related to
financial literacy and economic education. Membership is open
to all Members of the House of Representatives.
``Representatives Biggert and Hinojosa are to be commended
for bringing energy, focus and commitment to this effort,''
said Robert Duvall, President and CEO of the NCEE. ``Their
action could not be more timely. By providing a dedicated
forum for economic and financial education policy, the Caucus
will help both to direct and to magnify the tremendous
congressional interest and energy in these critical issues.''
I encourage all House Members to join this important
organization, and become actively involved in its vital
mission,'' Duvall stated, for the NCEE.
Both Representatives Biggert and Hinojosa will be featured
speakers at the 2005 National Summit on Economic and
Financial Literacy, convened and conducted by the NCEE, which
will be held on Thursday, March 3, 2005 at the National Press
Club in Washington, DC.
about the ncee
The NCEE (www.ncee.net) is a non-profit, non-partisan
organization dedicated to improving economic literacy.
Through its unique nationwide network of state Councils and
more than 200 university based Centers for Economic
Education, NCEE's programs reach more than 150,000 K-12
teachers and over 15 million students in more than 70,000
schools each year. The NCEE was also recently designated by
the U.S. Department of Education as the leadership
organization to implement the $1.5 million Excellence in
Economic Education program through the No Child Left Behind
legislation. Through the Cooperative Education Exchange
Program (CEEP), the distinctive programs of the National
Council on Economic Education are also reaching over 10
million students in 26 countries, including Indonesia,
Central and Eastern Europe, the former Soviet Union and other
developing market economies.
____
Junior Achievement,
Colorado Springs, CO, February 15, 2005.
Hon. Ruben Hinojosa,
Rayburn House Office Building,
Washington, DC.
Dear Representative Hinojosa: On behalf of Junior
Achievement's 1,400 associates and 110,000 classroom
volunteers nationwide, congratulations on your latest effort
to promote financial literacy and economic education.
[[Page H1801]]
The establishment of a Financial & Economic Literacy Caucus
reinforces the importance of a financially literate society.
With personal bankruptcies and debt continuing to soar, I
urge the caucus to consider a focus on youth. According to
the latest JA Poll on Personal Finance, nearly 70 percent of
teens nationwide say they influence their parents' buying
decisions, while nearly 25 percent of 18-year olds say they
already own and use their own credit cards. The earlier we
can intervene with an education on the ``economics of life,''
the better off we'll be.
As the nation's oldest and largest organization dedicated
to promoting economic education and financial literacy, JA
stands ready to assist the caucus in advancing its goals.
Thank you for your resolve in championing this important
issue. We look forward to working with you.
Sincerely,
David S. Chernow,
President and CEO, JA Worldwide.
____
ICI Lauds Formation of the Financial Literacy Caucus Washington, DC
February 15, 2005.--The Investment Company Institute today
announced its support for the creation of the Financial and
Economic Literacy Caucus under the bipartisan leadership of
caucus Co-Chairs, Congressmen Judy Biggert (R-IL) and Ruben
Hinojosa (D-TX).
The caucus will host educational forums and such events as
``Financial Literacy Month.'' It will also act as focal point
for communicating with various public and private agencies
and groups.
``Mutual funds are many Americans' introduction to
investing,'' said ICI President Paul Schott Stevens. ``The
earlier they understand the importance of investing to pay
for educating their children and funding their retirement,
the more effective their planning will be. We are pleased to
support the Caucus' mission of promoting financial
literacy.''
Providing America's 92 million mutual fund investors with
the tools they need to develop goals, evaluate risk, and make
informed investment decisions is a long-standing mission of
the Institute and its mutual fund members, Stevens said.
The Institute supports financial education through its
Investor Awareness series of public messages and publications
and through the work of its Education Foundation. Since 2000,
the Foundation's primary focus has been the Investing for
Success program.
In partnership with the National Urban League and the
Hispanic College Fund, the program promotes the benefits of
long-term investing within the African-American and Hispanic
communities.
Reps. Biggert and Hinojosa are both members of the House
Committee on Financial Services and the House Committee on
Education and the Workforce, which has jurisdiction over
pensions. They also share long histories of promoting
financial literacy through their legislative actions.
____
NASAA Commends Launch of Congressional Financial and Economic Literacy
Caucus
Washington, February 16, 2005.--The following is a
statement from North American Securities Administrators
Association President and New Jersey Board of Securities
Chief Franklin L. Widmann on the formation of the Financial
and Economic Literacy Caucus. Organized in 1919, NASAA is the
oldest international organization devoted to investor
protection. NASAA's membership consists of securities
administrators in the 50 states, the District of Columbia,
Puerto Rico, Canada, and Mexico.
``NASAA commends Representatives Judy Biggert (R-IL) and
Ruben Hinojosa (D-TX) for their leadership in forming the
Financial and Economic Literacy Caucus. Providing a forum for
Members of Congress to promote policies advancing financial
literacy and economic education is an important step to
ensuring that our citizens have the tools necessary to build
financial knowledge and financial security.
``State securities regulators share your concern about the
deficit level of financial literacy in this country and the
impact it has on personal financial decision-making. And we
also share a common dedication and commitment to doing
something about it.
``We stand ready to assist the Caucus and serve as a
resource, as you move forward in developing and implementing
programs to improve the level of financial literacy in this
country.''
Madam Speaker, financial literacy means empowerment, power to manage
money, credit, and debt, and become responsible workers, heads of
households, investors, entrepreneurs, and leaders. It means banking the
unbanked and bringing them into the mainstream financial system to
protect them from abusive predatory or deceptive credit offers and
financial products.
Numerous programs exist to improve financial literacy: The NCEE's
Financial Fitness For Life program; Jump$tart's Personal Finance
Education Standards and Benchmarks are used by educators and parents;
Junior Achievement's programs and surveys; ICI's Investing for Success
program; the FDIC's free, multilingual Money Smart adult financial
literacy curriculum; the FTC's I.D. theft What's It All About program;
as well as CFA's America Saves program; VISA's Practical Money Skills
For Life program; AICPA's 360 Degrees of Financial Literacy program;
the Girl Scouts of America's Money Smarts program; the CHCI NHI's
homeownership workshops; Lincoln Financial's financial planning
programs; the ABA Education Foundation's Take Control of Our Personal
Finances program; ACB's Money Rules program; the North American State
Securities Association's program.
Madam Speaker, the list goes on and on. It includes Fannie Mae's
homeownership program in English and Spanish; Operation Hope's Banking
on Our Future program; and Freddie Mac's CreditSmart Espanol program.
At present, several of these financial literacy programs are
operating in my congressional district, Texas 15. The Security Industry
Association's Stock Market Game is one such program. I am proud that my
district was chosen again this year to participate in SIA's second
annual Capitol Hill Challenge stock market program. This year I
selected La Feria High School, located in Cameron County, Texas, to
participate in this program. They have been competing against 15 other
districts from across our country. I wish them well. Please know I will
be rooting for my team.
Madam Speaker, I want to thank the gentlewoman from Illinois (Mrs.
Biggert), and her legislative assistant Nicole Austin, for working with
me on today's legislation.
In closing, I want to say that I look forward to continuing to
collaborate with her on any and all efforts that will help increase
public awareness of the need to improve financial literacy, to promote
programs that increase financial literacy for all during all stages of
life, and to significantly improve the financial literacy rates across
this great country. It is never too late to take control of your
personal finances, and it is something that all of us in the United
States can start today.
I urge my colleagues to support this legislation, Madam Speaker.
Mr. DAVIS of Illinois. Madam Speaker, we have no further speakers on
our side. I would just simply close by suggesting that my father used
to tell us that money is like life. The better you manage it, the
longer you are likely to keep it.
Madam Speaker, I strongly support this resolution.
Madam Speaker, I yield back the balance of my time.
Mr. GUTKNECHT. Madam Speaker, I would only close by saying that
financial literacy clearly is an idea whose time has come. I thank the
authors for bringing it forward. I urge all Members to support the
adoption of House Resolution 148.
Ms. JACKSON-LEE of Texas. Madam Speaker, I am here today to
supporting the goals and ideals of Financial Literacy Month. I want to
thank my colleagues Congresswoman Biggert and Congressman Hinojosa for
introducing such a valuable piece of legislation.
The financial services industry in the United States benefits
millions of people in the United States, providing products and
services that allow individuals and families to build homes, buy cars,
finance educations, start businesses, and meet everyday needs. Personal
financial education is essential to ensure that individuals are
prepared to manage money, credit, and debt, and become responsible
workers, heads of households, investors, entrepreneurs, business
leaders, and citizens, yet a study completed in 2004 by the Jump$tart
Coalition for Personal Financial Literacy found that high school
seniors know less about principles of basic personal finance than did
high school seniors 7 years earlier.
Financial education has been linked to lower delinquency rates for
mortgage borrowers, higher participation and contribution rates in
retirement plans, improved spending and saving habits, higher net
worth, and positive knowledge, attitude, and behavior changes, yet a
2004 survey completed by the National Council on Economic Education
found that the number of States that include personal finance in
education standards for students in kindergarten through high school
has improved since 2002 but still falls below 2000 levels.
Expanding access to the mainstream financial system provides
individuals with lower-cost and safer options for managing finances and
building wealth and is likely to lead to increased economic activity
and growth, yet studies show that as many as 10 million
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households in the United States are `unbanked' or are without access to
mainstream bank products and services. Personal financial management
skills and lifelong habits develop during childhood, and 55 percent of
college students acquire their first credit card during their first
year in college, and 92 percent of college students acquire at least
one credit card by their second year in college, yet only 26 percent of
people between the ages of 13 and 21 reported that their parents
actively taught them how to manage money.
Although more than 42,000,000 people in the United States participate
in qualified cash or deferred arrangements described in section 401(k)
of the Internal Revenue Code of 1986 (commonly referred to as `401(k)
plans'), a Retirement Confidence Survey conducted in 2004 found that
only 42 percent of workers surveyed have calculated how much money they
will need to save for retirement and 4 in 10 workers say that they are
not currently saving for retirement. It is unfortunate that personal
savings as a percentage of personal income decreased from 7.5 percent
in the early 1980s to 1.1 percent in the last two quarters of 2004.
Congress has sought to implement a national strategy for coordination
of Federal financial literacy efforts through the establishment of the
Financial Literacy and Education Commission (FLEC) in 2003, the
designation of the Office of Financial Education of the Department of
the Treasury to provide support for the Commission, and requirements
that the Commission's materials, Web site, toll-free hotline, and
national multimedia campaign be multilingual.
I am glad to be here today to support the goals and ideals of
Financial Literacy Month; and join my colleagues in requesting that the
President issue a proclamation calling on the Federal Government,
States, localities, schools, nonprofit organizations, businesses, other
entities, and the people of the United States to observe the month with
appropriate programs and activities.
Mr. DREIER. Madam Speaker, I would like to commend the Gentlelady
from Illinois, Mrs. Biggert, and the Gentleman from Texas, Mr.
Hinojosa, for introducing this important resolution. As a member of the
Financial and Economic Literacy Caucus, I am proud to rise in support
of this measure.
Over 40 years ago, fewer than 2 in 10 families owned stocks. Today,
this figure has risen dramatically, with more than 50 percent of
Americans owning assets dependent on the stock market. We've come a
long way. But I believe we can still do more to provide greater
opportunities for all Americans to become part of the Investor Class.
One method is to reach out directly to our local communities. In my
own district, I am sponsoring a team of students from Bonita High
School (La Verne) to participate in the Securities Industry
Association's (SIA) stock market game. This program provides teachers
with an engaging real-world tool for teaching basic economic skills
while instilling in their students an understanding of the importance
of sound saving and investing. As students track their team's
portfolio, they are able to commit the skills they learn in school to
real-world financial decisions.
It is also important to note that efforts to enhance financial
literacy should not just be confined to our own country. As we strive
for expanded trade and investment with our global partners, the
financial ups and downs in world markets have a greater impact on our
local economies. Helping to spread financial and economic literacy to
emerging markets is critically important to establishing stability in
developing nations. For example, in 2004 Citigroup and the Citigroup
Foundation provided more than $22 million in support of financial
education programs in activities that reached millions of people in
more than 40 countries. These activities included community development
projects to support the expansion of thrift and credit-based
cooperative groups in India and the development of a microfinance
industry in China.
Financial literacy is more than just crunching numbers. It is about
empowerment and opportunity. It is about making your money work for
you, whether it is buying a first home, paying for college, or planning
for retirement. That is why we must do everything we possibly can to
ensure that all Americans have a solid understanding of personal
finance.
Madam Speaker, I urge all of my colleagues to vote in support of this
resolution.
Mr. GUTKNECHT. Madam Speaker, I yield back the balance of my time.
{time} 1345
The SPEAKER pro tempore. (Mrs. Miller of Michigan.) The question is
on the motion offered by the gentleman from Minnesota (Mr. Gutknecht)
that the House suspend the rules and agree to the resolution, H. Res.
148.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds of
those present have voted in the affirmative.
Mr. DAVIS of Illinois. Madam Speaker, on that I demand the yeas and
nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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