[Congressional Record Volume 153, Number 63 (Thursday, April 19, 2007)]
[Extensions of Remarks]
[Pages E798-E799]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      SUPPORTING THE GOALS AND IDEALS OF FINANCIAL LITERACY MONTH

                                 ______
                                 

                               speech of

                          HON. RUBEN HINOJOSA

                                of texas

                    in the house of representatives

                         Monday, April 16, 2007

  Mr. HINOJOSA. Mr. Speaker, I submit the following letters regarding 
H. Res. 273, ``Supporting the Goals and Ideals of Financial Literacy 
Month.''


                                                  Countrywide,

                                    Calabasas, CA, April 12, 2007.
     Hon. Ruben Hinojosa,
     House of Representatives, Rayburn House Office Building, 
         Washington, DC.
     Hon. Judy Biggert,
     House of Representatives, Longworth House Office Building, 
         Washington, DC.
     Re: Support for H. Res. 273.
       Dear Congressman Hinojosa and Congresswoman Biggert: On 
     behalf of Countrywide Financial Corporation I want to commend 
     you and your colleagues in the House Financial and Economic 
     Literacy Caucus for the introduction of H. Res. 273, which 
     supports the goals and ideals of Financial Literacy Month.
       Founded in 1969 on the belief that all Americans should 
     have the opportunity to own a home, Countrywide has become 
     the largest home mortgage lender in the nation and a leader 
     in providing home loans to first-time buyers, minorities and 
     low- and moderate-income families. Today, Countrywide has 
     grown to more than 54,000 employees with 900 retail offices 
     nationwide. We at Countrywide share the sentiments and 
     concerns expressed in H. Res. 273, and we strongly support 
     the goal of improving the quality and reach of financial 
     education in America, particularly to lower- and moderate-
     income individuals and families.
       To that end, in conjunction with Financial Literacy Month 
     Countrywide has launched its Home Ownership Mortgage 
     Education (H.O.M.E.) program. The H.O.M.E. program is a 
     comprehensive online reference tool, available at 
     www.HomeBvCountrvwide.com. providing consumers with 
     information on all aspects of homeownership, from basic 
     personal finance to life as a homeowner. By offering this 
     financial and homebuyer education program, Countrywide 
     supports consumers' ability to make well-informed financial 
     decisions as they pursue the dream of homeownership.
       The H.O.M.E. program is a further extension of 
     Countrywide's founding mission and one of several education 
     initiatives that Countrywide supports. In January 2005, 
     Countrywide announced a $1 million, five-year commitment to 
     the U.S. Conference of Mayors' DollarWi$e Campaign. As a 
     founding sponsor of the campaign, Countrywide supports 
     Capacity Grants, a component of the campaign that makes 
     grants to cities that are developing or expanding local 
     financial education strategies for consumers. More than 100 
     cities now conduct local DollarWi$e campaigns and Capacity 
     Grants have been awarded to the following cities: Pleasanton 
     (CA), Quincy (IL), Bowling Green (KY), Quad Cities (IL, IA), 
     Detroit, Savannah and Miami.
       Again, I want to express my personal support and that of 
     our employees for H. Res. 273, and for the goals and ideals 
     of the House Financial and Economic Literacy Caucus.
           Sincerely,
                                                 Angelo R. Mozilo,
     Chairman and CEO.
                                  ____



                               State Farm Insurance Companies,

                                  Bloomington, IL, April 12, 2007.
     Hon. Ruben Hinojosa,
     Rayburn House Office Building, House of Representatives, 
         Washington, DC.
     Hon. Judy Biggert,
     Longworth House Office Building, House of Representatives, 
         Washington, DC.
       Dear Representatives Hinojosa and Biggert: As a leader in 
     insurance and financial services, State Farm' 
     strongly supports H Res. 273. This resolution in support of 
     the goals and ideals of Financial Literacy Month clearly 
     illustrates the need for increased efforts to build financial 
     and economic literacy in the United States, especially among 
     young people.
       State Farm is committed to promoting financial literacy 
     among Americans of all ages. In 2006, State Farm contributed 
     more than $1.3 million dollars to financial literacy 
     programs; and, in 2007, we will contribute nearly $2 million. 
     Our contributions target the issue of financial literacy in 
     many ways, from grassroots efforts that are led by youth, to 
     training aimed at teacher education, to content designed for 
     adults.
       On behalf of State Farm, I congratulate you both on your 
     continued leadership of the Financial and Economic Literacy 
     Caucus. Your commitment to promoting the importance of 
     financial literacy through events like the upcoming Financial 
     Literacy Day on the Hill benefits not only your constituents, 
     but thousands of other Americans seeking access to higher 
     education, homeownership, retirement savings, and other 
     fundamental financial goals.
       We look forward to a continued relationship with you as we 
     work to address this very important issue. If State Farm can 
     serve as a resource to you or the Caucus, please feel free to 
     contact me.
           Sincerely,
                                             Michael A. Fernandez,
     Vice President, Public Affairs.
                                  ____



                                  Consumer Mortgage Coalition,

                                   Washington, DC, April 15, 2007.
     Hon. Ruben Hinojosa,
     House of Representatives, Rayburn House Office Building, 
         Washington, DC.
     Hon. Judy Biggert,
     House of Representatives,
     Longworth House Office Building, Washington, DC.
       Dear Representatives Hinojosa and Biggert: The Consumer 
     Mortgage Coalition, a trade association of national mortgage 
     lenders, servicers, and service providers, strongly endorses 
     the bi-partisan Congressional resolution, H.R. 273, 
     supporting April as ``Financial Literacy Month''. We applaud 
     and thank you and all of the cosponsors of this resolution 
     for your efforts to both raise awareness about the critical 
     need for financial education in the United States and 
     encourage the government and the private sector to work 
     towards our common goal on this issue.
       Our nation's finance system offers access to capital and 
     mortgage credit to consumers of almost every economic 
     condition. This has contributed significantly to raising our 
     nation's homeownership rate to the highest in history. 
     Homeownership remains the fundamental first step towards an 
     individual's ability to accumulate personal wealth, as

[[Page E799]]

     well as contributing to neighborhood and community stability, 
     among many other attributes.
       For most households, purchasing a home is the most 
     significant financial transaction they will ever make. 
     Therefore, it is very important that homebuyers understand 
     and are able to choose the mortgage loan product that best 
     fits their individual financial needs. In order for a 
     consumer to make the right choice, however, they must be 
     financially literate.
       Moreover, a well-informed consumer is the first line of 
     defense against mortgage fraud and predatory mortgage 
     origination practices. If consumers are able to fully 
     understand the options before them, they will be better able 
     to defend themselves against those who hope to take advantage 
     of them.
       From a broader perspective, our member companies strongly 
     believe that financial education has a direct impact on the 
     economic health of our families, our communities, and our 
     nation.
       Again, we thank and applaud you for your leadership on this 
     important initiative.
       With best regards, I am
           Sincerely,
                                                 Anne C. Canfield,
     Executive Director.
                                  ____


               [From the Washington Post, Mar. 30, 2007]

  Money's On the Line During These Classes: Colleges Teach Financial 
                                 Basics

                           (By Susan Kinzie)

       Heather O'Brien graduates from Georgetown University this 
     spring with an education in biology, in English, in history. 
     She leaves with a newfound conviction that she should work in 
     the ministry. And with about $63,000 in debt.
       ``When I got here,'' she said, ``finances were the last 
     thing on my mind. I was on my own for the first time, in a 
     new place. It was very exciting--and it seemed like college 
     would last forever.''
       Now, she's taking one last set of classes. It's a sort of 
     Real World 101, a crash course in money: Georgetown is 
     offering a series of financial literacy workshops for 
     seniors, covering such topics as loan repayment and 
     consolidation, spending, credit cards, taxes and benefits.
       The professors and other financial experts leading the 
     classes all say the same thing: If only I'd known this when I 
     was your age.
       ``These are lessons best learned young,'' said adjunct 
     business professor Michael Ryan, ``when there's not a lot on 
     the line.''
       Students are leaving college with more debt than ever, now 
     that more of them have to rely on loans, tuition keeps rising 
     and credit cards are being pushed on many campuses. The 
     median education loan debt is nearly $20,000 for full-time 
     students at four-year colleges. And that's not including 
     credit cards; more than half of students surveyed this winter 
     by Sallie Mae had piled on more than $5,000 in debt in 
     school. And one-third added more than $10,000 in credit-card 
     debt.
       Some students treat credit cards and student loans like 
     found money, for spring break trips or betting on NCAA 
     brackets. But many are struggling to afford college; nearly a 
     quarter charge part of their tuition. And most need to get 
     used to managing expenses, learning--often the hard way--as 
     they go along.
       Now some schools are adding courses on financial basics. 
     Beginning this academic year in Virginia, for example, public 
     universities are required to offer some financial literacy 
     training, said Barry Simmons, Virginia Tech's director of 
     scholarships and financial aid. The school designed an 
     optional online class, covering budgeting, credit cards and 
     other basics for freshmen. The University of Virginia has a 
     pilot program, too.
       Financial companies offer occasional courses on campus, and 
     some have pitched in on the Georgetown classes. The added 
     focus comes as scrutiny on universities' relationships with 
     lenders increases and as Congress moves to ease the burden on 
     students.
       Some students arrive on campus used to managing credit, 
     balancing budgets, maybe even trading stocks. But others--
       ``We get the sense that students don't really understand 
     how money works,'' said Greg Pasqua, a senior at Georgetown 
     who heads the student-run credit union and helped organize 
     the seminars. ``People do things that aren't very intelligent 
     with their money. Overdraw accounts six times on $2 
     purchases, and get hit with six fees for buying bubble gum. 
     Or get reported to Equifax because you didn't pay your loan 
     on time, and you're like, `I'll get it next time.' ''
       Ryan said, ``It's amazing what some students don't know--
     that 30 to 40 percent of their proceeds will be taxed away . 
     . . Even basic things like 401(k)s,'' or whether they should 
     put money into the pretax retirement savings accounts.
       At two recent workshops at Georgetown, students interrupted 
     to ask, ``What is a 401(k), anyway?''
       So professors and other experts sorted through the 
     unfamiliar names and the jargon, explained the types of 
     benefit choices they'll be expected to make, how to figure 
     out what their monthly loan payments and take-home pay will 
     be, how to invest in their 20s.
       It's not difficult stuff. It's just--who has time to think 
     about credit scores and interest rates when there's so much 
     else going on?
       Until a car loan or a lease is turned down because of a bad 
     credit score, or late fees pile up.
       When O'Brien was a high school senior in Texas, she was 
     offered a full scholarship to another school. But she loved 
     Georgetown; when she visited, someone told her that everyone 
     there has been given many gifts and that they should think 
     about how to give back.
       So she didn't pay too much attention to the details of the 
     loans she was taking out. ``When I was a freshman, I was 
     like, `Loans, great! I don't have to pay them back 'til I 
     stop going to school--cool.' ''
       It's not just tuition (which is a hefty $33,000-plus this 
     year, before housing, books and fees.) In Georgetown, with 
     shops selling $200 jeans and bars mixing $15 cocktails, there 
     are plenty of ways to bleed money within stumbling distance 
     of campus.
       O'Brien didn't make any big mistakes; she was carefu1. She 
     knew she didn't want to drop a couple of weeks' paychecks 
     from her on-campus job on a top from some little 
     boutique nearby; she'd rather take a bus to shop somewhere 
     cheaper. She's not a big drinker, so she doesn't wake up 
     wondering what happened to her wallet. But she does like 
     ordering music and books online, and she didn't realize 
     how quickly it could add up.
       ``It wasn't until senior year, when I had to pay my own 
     rent and pay utilities, that I really understood what $60,000 
     was,'' she said, referring to her tuition debt.
       This year, too, she started setting rules for herself. ``I 
     eat lunch on campus once a week and pack my lunch the other 
     days.'' And she limits her online purchases to $20 a month. 
     She opened a separate account for her rent money so she's not 
     tempted to dip into it.
       The classes have already changed her mind-set, she said. 
     She learned about interest rates and credit scores. ``I have 
     had a couple of late payments that dinged me. I just thought, 
     `Oh, one day late, not a big deal.' '' But in the class she 
     learned that could cost major benefits. ``If you go three 
     years [paying] on time, you could have a 3 percent decrease 
     in the interest rate--which is amazing.''
       She doesn't regret taking out the loans; she had so many 
     great classes at Georgetown that she kept switching majors, 
     from pre-med to English and so on. ``This is the place that 
     made me who I am,'' she said, ``The ideals, the professors, 
     the chaplains, the friends I made.''
       She's excited to become a chaplain or a grief and crisis 
     counselor at a hospital after graduate school. She knows she 
     won't get paid much, but she's absolutely sure it's what 
     she's meant to do.
       ``There are some things I look back and wish they were 
     different,'' she said. She might have taken out smaller 
     loans, with less money for expenses. ``I might have had more 
     of a realization that all of that was [racking up] interest 
     and would take a long time to pay back.''
       Now she has a better idea of how to manage loans and 
     evaluate benefits and salary. The classes reminded her to 
     budget carefully and put money away for retirement when she 
     can.
       Then again, she's not sure that had she learned all this 
     earlier it would have changed many of the decisions she made. 
     ``Graduation,'' she said, ``was so far away.''

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