[Congressional Record Volume 154, Number 69 (Tuesday, April 29, 2008)]
[House]
[Pages H2814-H2820]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FINANCIAL LITERACY MONTH 2008
Mr. HINOJOSA. Mr. Speaker, I move to suspend the rules and agree to
the
[[Page H2815]]
resolution (H. Res. 1079) supporting the goals and ideals of Financial
Literacy Month 2008, and for other purposes.
The Clerk read the title of the resolution.
The text of the resolution is as follows:
H. Res. 1079
Whereas personal financial literacy is essential to ensure
that individuals are prepared to make informed financial
choices, as well as manage money, credit, debt, and risk and
become responsible workers, heads of households, investors,
entrepreneurs, business leaders, and citizens;
Whereas personal financial management skills and lifelong
habits begin to develop during childhood;
Whereas a study completed in 2006 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, and the
average scores in both years were failing grades;
Whereas the 2007 Survey of the States by the National
Council on Economic Education found that 49 States include
the subject of economics and 40 States include the subject of
personal finance in their elementary and secondary education
standards, up from 48 and 31 States, respectively, in 2002;
Whereas 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 1 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 the personal savings rate in the United States was
zero percent at the end of the fourth quarter of 2007, which
puts it among the lowest since the government began
collecting the data in 1959;
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 37 percent of
workers say that they are not currently saving for
retirement;
Whereas the average baby boomer has only $50,000 in savings
apart from equity in their homes;
Whereas a study by the American Institute of Certified
Public Accountants found that 55 percent of people between
the ages of 25 and 34 maintain an interest-bearing account or
other savings instrument, a decrease of 10 percent since
1985;
Whereas the April 2007 National Foundation for Credit
Counseling consumer financial literacy survey found that only
39 percent of American consumers keep close track of their
expenses; less than half have ordered their credit report;
and one-third do not know where to go for financial advice;
Whereas studies show that as many as 10,000,000 households
in the United States are ``unbanked'' or are without access
to mainstream financial products and services;
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;
Whereas public, community-based, and private sector
organizations throughout the United States are working to
increase financial literacy rates for Americans of all ages
and walks of life through a range of outreach efforts,
including media campaigns, websites, and one-on-one
counseling for individuals;
Whereas at least 6,500 bankers will teach savings skills to
young people on April 29, 2008, during Teach Children to Save
Day, which was started by the American Bankers Association
Education Foundation in April of 1997 and has helped more
than 45,000 bankers teach savings skills to nearly 2,300,000
young people;
Whereas staff from America's credit unions will make
presentations to young people at local schools on financial
topics such as student loans, balancing a checkbook, and auto
loans during National Credit Union Youth Week, which will be
held April 20-26, 2008;
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 review, discuss
and recommend financial and economic literacy policies,
legislation, and programs, (2) collaborate with the private
sector, and nonprofit and community-based organizations, and
(3) organize and promote financial literacy legislation,
seminars, and events, such as ``Financial Literacy Month'' in
April, 2008, and the annual ``Financial Literacy Day'' fair
on April 28, 2008; 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, and JA
Worldwide 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, including raising public awareness about financial
education;
(2) recognizes the importance of managing personal
finances, increasing personal savings and reducing
indebtedness in the United States; and
(3) 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 with the goal of
increasing financial literacy rates for individuals of all
ages and walks of life.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Texas (Mr. Hinojosa) and the gentlewoman from Illinois (Mrs. Biggert)
each will control 20 minutes.
The Chair recognizes the gentleman from Texas.
General Leave
Mr. HINOJOSA. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks on this legislation and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Texas?
There was no objection.
Mr. HINOJOSA. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, personal financial management skills and lifelong habits
begin to develop during childhood. It is essential that we begin
preparing our youth as early as possible to make informed financial
choices, as well as manage money, credit, debt, and risk, and become
responsible workers, heads of household, investors, entrepreneurs,
business leaders, and citizens.
We need to begin working closely with the Department of Education in
States and localities to ensure that we begin the financial literacy
learning process at least by the time a child enters kindergarten, and
we need to work with the States to encourage them to require some form
of financial literacy as a required part of the education curriculum.
Policymakers of both parties at the local, State, and Federal levels
recently have increased their focus on financial literacy and economic
education issues because national surveys from such groups as
Jump$tart, the National Council on Economic Education, and the National
Federation for Credit Counseling reveal troubling gaps in students' and
the public's knowledge of these subjects.
Economic competency and financial literacy skills are critical for
individuals to make sound decisions regarding home ownership, in
savings, investment, credit and borrowing, as well as retirement
planning. An educated and literate populace will strengthen the
national economy as individuals improve their own economic well-being.
Mr. Speaker, our government should lead by example. We should
coordinate and communicate a unified message on financial literacy
across this Nation. We should authorize and appropriate such funds as
necessary to create a broad-based public awareness campaign comprised
of a substantial mass market, multimedia effort in support of a
national financial literacy initiative on the scale of the ``Truth''
campaign developed through the Public Education Fund to discourage
smoking among young people.
Furthermore, I believe that the National Endowment on Financial
Education and several other financial literacy nonprofits and
community-based groups would agree with me. In 2004, Congress passed a
bill known as the FACT Act. One of the provisions in that act required
Treasury and a Financial Literacy Commission to create such a campaign.
It is now 2008, and Treasury has failed. So now it's our turn to take
back control of the situation.
We can introduce legislation authorizing funds for such a national
multimedia financial literacy campaign. The National Endowment on
Financial Education recently completed one that was a success. I hope
that all of my colleagues will support such legislation once it has
been introduced.
Mr. Speaker, some disturbing facts. The personal savings rate in the
United States was a negative 1 percent at the end of 2006, and it was
zero percent at the end of the fourth quarter of 2007, which puts it
among the lowest level since the government began collecting
[[Page H2816]]
the savings rate data in 1959. Although more than 42 million people
living in the U.S. participate in 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 only 37 percent of workers say that they are not currently saving
for retirement.
Even more disturbing is the fact that the average baby boomer has
only $50,000 in savings, apart from equity in their home, and the first
wave of baby boomers have already entered their retirement years. This
is unbelievable and dangerous to our economy and our way of life.
Something I want to discuss at length, Mr. Speaker, is the plight of
what are known as the ``unbanked.'' As many as 10 million households in
the United States are unbanked, without access to mainstream financial
products and services. This is a very common occurrence in my
congressional district. People tend to operate in a cash society along
the Texas Mexico-border. If these individuals were to buy their goods
and services by drawing down funds from a checking or a savings
account, they would eventually be incorporated into the entire
mainstream financial system. By doing so, they would establish credit.
Lenders would have access to their credit reports and scores, and this
would hopefully result in these previously unbanked persons attaining
the American Dream of homeownership.
Unfortunately, even when these formally unbanked individuals finally
have the ways and means to purchase a home, they quickly discover that
they have to protect themselves from predatory lenders. I believe that
the legislation that Chairman Frank and the Committee on Financial
Services is crafting will help low-income individuals who have been
duped by unscrupulous salespersons, which has resulted in the current
economic crisis. Chairman Frank definitely has his finger on the pulse
of this problem, and he will make sure the train stays on the track.
I salute Congresswoman Biggert for her work on this issue. Six years
ago, to address all of these financial literacy problems, my colleague
and good friend and staunch supporter of financial literacy,
Congresswoman Judy Biggert, and I cofounded and currently cochair the
Congressional Financial and Economic Literacy Caucus. The caucus seeks
to address these issues head-on by increasing public awareness of poor
financial literacy rates and working to find the ways and means to
improve them.
The caucus has helped promote policies that advance financial
literacy and economic education. Together, we have done so by
connecting Members of Congress with Federal agencies that can help them
teach financial literacy at town hall meetings, through financial
literacy e-newsletters, financial literacy fairs, financial football,
the stock market game, and many more activities.
Mr. Speaker, I want to take this opportunity to commend my colleagues
and friends, Congresswoman Eddie Bernice Johnson and Congressman Don
Payne, for all that they are doing to improve financial literacy. With
a solid background knowledge of financial literacy, America's youth can
become responsible employees, heads of household, investors,
entrepreneurs, and business leaders.
{time} 1515
Parents and teachers need to teach our youth to start saving young,
stay insured, budget their money, not borrow what they cannot repay,
and especially avoid excessive credit card debt and the credit card
sharks that prey on students on every college campus across the United
States.
Before I close, Mr. Speaker, I want to take this opportunity to thank
Congresswoman Biggert for working with me over the years on financial
literacy. It is a pleasure to work with you and to be able to
accomplish so much in just a few years.
I also want to commend her staff, Nicole Austin and Zach Cikanek, for
their dedication to the financial literacy cause. I want to also
express my sincere appreciation for the assistance Denise Wilson of our
Committee on Government Reform provided my staff. I applaud the staff
from America's credit unions, who made presentations to young people at
local schools on financial topics such as student loans, balancing a
checkbook and auto loans during National Credit Union Youth Week, which
was held the week of April 20 of this year.
I also want to commend the American Bankers Association Education
Foundation for holding their annual Teach Children to Save Day. Today,
April 29, just happens to be Teach Children to Save Day. It is my
understanding that over 12,000 bankers from 1,100 bank branches signed
up to host financial literacy events today. Furthermore, I understand
that tomorrow is El Dia de los Ninos, and they too will be exposed to
financial literacy education in English and in Spanish. Many American
children will share financial literacy lessons with approximately
435,000 students, which is quite an endeavor, but one which they can
accomplish under the direction of Kathryn Kelly.
I include the following extraneous material for the Record:
NFCC and MSN Money Release Consumer Survey Results on Capitol Hill--
2008 Survey Reveals Serious Gaps in Financial Literacy
Silver Spring, MD.--The National Foundation for Credit
Counseling (NFCC) and MSN Money today released the results of
their 2008 Consumer Financial Literacy Survey during a
Congressional Briefing on Capitol Hill. The purpose of the
survey, conducted by Princeton Survey Research Associates
International, is to identify what Americans know about their
finances and to assess their overall financial health. Having
identified the key areas of deficiency, the NFCC and MSN
Money plan to target their financial education initiatives to
those Americans most at-risk.
While some results were positive, others revealed an
undeniable need for financial education. Key findings were as
follows:
Significant number struggle with mortgage payments and
complexity of buying a home. One in every 10 Americans with a
mortgage, or roughly 10 million adults, report being late or
missing a mortgage payment in the last year. Adding more
stress to the current housing market, almost one-quarter of
Americans say they do not know enough about owning a home to
consider buying one.
Millions have serious difficulties paying bills each month,
most notably Generation Y. While a majority of the public
reports that they pay their bills on time and do not have any
debts in collections, a notable minority has fallen behind
and is struggling, with seven percent, or roughly 15 million
adults, either getting calls from collectors or seriously
considering filing for bankruptcy. Higher income households
and older Americans are more likely to stay on top of their
bills. Whites and Latinos are more likely to pay their bills
on time and stay clear of collections than blacks.
Alarmingly, only 59 percent or roughly 23 million of the
young adults in Generation Y, those ages 18-29, pay their
bills on time every month. That translates into millions of
tomorrow's leaders, those who will drive the engine of our
economy for years to come, who are not practicing a most
basic financial principle. The previous generation of
consumers, those ages 30-49, also do not appear to be
modeling good financial behavior.
Only a minority keep close track of expenses/spending.
Financial experts generally agree that having a household
budget is sound financial management. However, similar to the
findings from 2007, only a minority of Americans say they
keep close track of what they their typical monthly expenses
are. Although a majority of the public has at least a
somewhat good idea of where their money goes each month,
nearly two in 10, or roughly 40 million adults, keep little
or no track at all. Contrary to some stereotypes, how closely
Americans manage their money does not vary by gender, age, or
income. Women continue to be as likely as men, younger people
as likely as older people, and lower income households as
likely as higher income ones to keep close track of what
they spend.
Savings and emergency funds lacking. A majority of the
public does not have a sufficient emergency fund, defined as
three to six months income saved. More than one-third, or
roughly 76 million adults, say they do not have any non-
retirement savings. Although a majority is currently saving
for their retirement, more than one-quarter are not.
Many Americans are under-insured, Latinos at higher risk.
Even though the baby boomer generation has come of age, only
a little more than one-quarter say they have long-term care
insurance. Another at-risk group is renters, with only one in
10 saying they have renters insurance. Latinos are also less
likely to have medical and life insurance than whites or
blacks.
Minority has ordered credit report. Financial experts
recommend that consumers check their credit history at least
once a year. Yet, only a minority of Americans has ordered
their credit report in the past year, in spite of the fact
that it can be acquired for free. And one-third, or roughly
72 million adults, readily admit that they do not know their
all-important credit score.
Parents and home the biggest influence on financial
education. A plurality of the public
[[Page H2817]]
says they have learned the most about personal finance from
their parents or at home. Almost half of those who closely
monitor their finances are more likely to say that they
learned about personal finance from their parents or at home,
underscoring the potential positive influence parents can
have on their children financially. To a lesser extent, some
say they learned the most about personal finance on their
own, followed by a financial professional, self-help sources,
school, work, friends, and their spouse or partner.
Americans worry about future income growth; Midwest has
greatest concerns. And matters are not likely to improve,
according to some Americans. Only one-quarter expect their
income to outpace inflation. More than half of all Americans
believe their income will shrink, not keep pace with
inflation, or stay even; this worry is greatest among
Americans in the Midwest at nearly 70 percent.
``If there were ever a time that Americans needed to
embrace financial literacy, it is now,'' said Susan C.
Keating, president and CEO of the NFCC. ``The NFCC is proud
to make public the results of this survey in hopes that it
will be a wake-up call to consumers. We live in a credit-
dominated society and it is important that consumers avail
themselves to the many opportunities to sharpen their
financial skills and avoid any traps along the path to
financial stability.''
``The findings of this study are staggering, especially
given the current economic outlook. We conducted this study
to get at the core of what financial issues plague Americans
and with this information we are now better equipped to help
consumers where they need it most,'' said Richard Jenkins,
editor-in-chief of MSN Money. ``The good news is that there's
an array of tools, expert advice and other resources
available to better equip Americans with the information they
need to stay on top of their finances. As a first step, I
encourage consumers to check out the NFCC and MSN Money Web
sites for tips and guidance on how to get their finances on
track and stay ahead during these tough financial times.''
Survey Methodology. Princeton Survey Research Associates
International conducted telephone interviews between March
5th and March 15th, 2008 from a representative sampling of
1,001 Americans nationwide. The margin of error for questions
based on the total sample is +/- 3 percentage points.
____
Washington, DC, April 8, 2008.
Hon. Ruben Hinojosa,
House of Representatives,
Washington, DC.
Hon. Judy Biggert,
House of Representatives
Washington, DC.
Dear Representatives Hinojosa and Biggert:
I am writing on behalf of the Credit Union National
Association (CUNA), to express our support for H. Res. 1079,
which supports the goals and ideals of Financial Literacy
Month 2008. CUNA is the nation's largest credit union
advocacy organization, representing 90% of our nation's
approximately 8,800 state and federal credit unions, their
state credit union leagues, and their 88 million members.
Given the uncertainty in today's financial markets, the
subprime lending crisis and other economic factors, financial
literacy is more important than ever for all Americans. A
knowledge of personal financial management, including
savings, investment and debt, is essential to ensuring that
individuals are empowered to make informed decisions about
their finances. The financial literacy is vital to the well-
being of American families and the overall economic health
and prosperity of our nation.
Credit unions are particularly aware of the importance of
providing a financial education to young people. During
Financial Literacy Month, credit unions will demonstrate our
commitment to educating youth as we hold National Credit
Union Youth Week from April 20-26, 2008. Through the week's
National Youth Savings Challenge, participating credit unions
will motivate children, teenagers, and their parents to
become more active users of credit union services. Each year
of the challenge has seen a steady increase in participation
and savings. In 2007, 393 credit unions participated in the
challenge and 71,844 youth--an increase of 9,067 youth
accounts--made $10.1 million in saving deposits.
In keeping with our commitment, credit unions manage many
other financial youth literacy programs throughout the year.
Credit unions have directly assisted in delivering the
National Endowment for Financial Education's (NEFE) High
School Financial Planning Program materials to more than
1,200 schools and 500,000 students nationwide from 2000 to
2007. Of the 6 million student guides which have been
distributed since its publication, 4 million were distributed
since CUNA's partnership with the program in 2000.
In addition, credit unions have helped fund the BizKid$
Television Series--a 26-episode series that promotes
financial education for middle and high school students and
reaches nearly 90 million American households--which was a
joint project of the Washington Credit Union Foundation, the
Public Broadcasting Service, and Junior Achievement
Worldwide. Credit unions across the country also reach out to
students on a personal level by visiting local schools to
speak about such topics as student loans and hosting personal
finance camps for teenagers.
CUNA believes in the importance of financial literacy for
all Americans and thanks you for your leadership in
introducing H. Res. 1079. We strongly urge its adoption in
the House of Representatives.
Sincerely,
Daniel A. Mica,
President & CEO.
____
ICBA Applauds Reps. Hinojosa and Biggert for Resolution on Financial
Literacy Month
Washington, D.C. (April 15, 2008).--The Independent
Community Bankers of America (ICBA) strongly supports the bi-
partisan congressional resolution Recognizing the Goals and
Ideals of Financial Literacy Month (H. Res. 1079) designating
April as ``Financial Literacy Month,'' which calls on
government, non-profit organizations and the private sector
to raise public awareness about the importance of financial
education in the United States and the serious consequences
that can result from a lack of understanding about personal
finances.
``Managing money wisely is critical to success in life,''
said Cynthia L. Blankenship, ICBA chairman and vice chairman
and chief operating officer of Bank of the West, Irving,
Texas. ``Too many Americans lack the skill and knowledge to
make appropriate financial decisions. The more consumers and
young adults know, the better they are at managing their
finances, and the better they manage their finances, the more
likely they are to enjoy a secure financial future.
``We commend Reps. Ruben Hinojosa (D-Tex.) and Judy Biggert
(R-Ill.) for introducing a resolution that supports the goals
and ideas of Financial Literacy Month,'' said Blankenship.
``Financial education is important for today's consumers so
that they can understand and make good decisions when faced
with the complex array of financial products and services
available.''
ICBA encourages its nearly 5,000 member community banks to
support the goals of Financial Literacy Month by promoting
financial literacy programs during ICBA Community Banking
Month in April, as well as throughout the year. ICBA has an
on-going commitment to improving financial literacy by
forging government, non-profit and private-sector
partnerships, such as the Jump$tart Coalition and America
Saves.
ICBA recognizes community banks for their outstanding
financial literacy efforts within their community through the
National Community Bank Service Award Financial Literacy
Award. For 2007, two community banks received recognition:
Howard Bank, Ellicott City, Md., was honored for its
financial literacy program by donating more than $70,000 and
volunteering countless hours to local schools, community
groups and non-profit associations needing help with
financial literacy.
1st Centennial Bank, Redlands, Calif., was honored for
developing curriculum that teaches the basics of money
management such as saving, budgeting, spending and using
credit wisely. 1st Centennial offers the program and provides
all materials for free.
Some of the results of the National Federation for Credit
Counseling's survey were positive, but others revealed an undeniable
need for financial education. These results are consistent with the
findings of Jump$tart's 2008 financial literacy survey, the National
Council on Economic Education's 2007 Survey of the States, the 2007
Ariel-Schwab Black Investor Survey, the Employer Benefit Retirement
Institute's recent Retirement Confidence Survey, and the National
Council of La Raza's ``Financial Counseling: A Meaningful Strategy for
Building Wealth in the Latino Community.''
In closing, Mr. Speaker, our country is suffering financially and our
constituents are not armed with the tools they need to provide for a
good future. Whether you are 5 or 65, it is never too early nor too
late to take control of your finances. So why not start now?
For these reasons and more, I encourage my colleagues to support this
resolution, H. Res. 1079.
Mr. Speaker, I reserve the balance of my time.
Mrs. BIGGERT. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I rise in strong support of H. Res. 1079, which
recognizes April as National Financial Literacy Month. I am pleased to
say that this will be the fifth year in a row that Congress has
designated April as Financial Literacy Month, and I would like to thank
my good friend and fellow Chair of the House Financial and Economic
Literacy Caucus, Mr. Hinojosa, for introducing this resolution and for
his continuing efforts to improve financial literacy rates in America.
Our caucus, which boasts about 80 members from both sides of the
aisle, has been on the front line of this issue for several years, and
I think it is fair to say that we have made some genuine progress.
Today, 40 States include personal finance in their educational
standards. That is up from 31 in 2002. Even more promising, 49 States
now include some aspect of economics in the
[[Page H2818]]
curriculum guidelines. But we have much work ahead of us if we are
going to help today's children become tomorrow's smart investors,
entrepreneurs and business leaders.
The savings rate is still hovering just below zero; 10 million
Americans are unbanked; there were 2.2 million foreclosures in 2007;
and the front pages of our newspapers across the country proclaim that
millions of Americans are losing their homes because they were not
ready to be homeowners.
Clearly, the need to improve financial literacy of Americans is
greater than ever. And this applies to all Americans, not just students
and children. From college grads to senior citizens, consumers are
being asked to make decisions about increasingly complex financial
products. According to the FTC, one-third of borrowers could not even
identify the interest rate in a mortgage disclosure form and half could
not correctly identify the loan amount. The problem is amplified by
complicated legal jargon about balloon payments, rate resets, escrow
accounts, prepayments and closing costs. The list goes on and on. That
is why I have introduced several bills to help owners find a loan that
best meets their budget and needs, steering them away from a situation
that could lead to foreclosure down the road.
Just last week, I joined Financial Services Ranking Member Bachus and
Housing and Community Development Subcommittee Ranking Member Shelley
Moore Capito to introduce legislation that would simplify mortgage
documents and increase resources for housing counseling. Taken
together, these reforms will not only prevent foreclosures, they will
help owners to avoid fraud and allow them to easily compare financial
products to find the best loan for their families' needs.
Mr. Speaker, efforts to stimulate the economy cannot succeed unless
we equip Americans with the knowledge and resources they need to
succeed in today's sophisticated economic market. Housing is just one
of these areas where improved financial literacy will benefit
consumers.
Americans also need access to the proper tools for saving and
investing money. At the start of the 110th Congress, I introduced a
bill called the 401 Kids Family Savings Act of 2007. This bill will
allow parents and family members to set aside money in a child's
account that will accumulate tax-free and can be used for college
tuition, a first home, or even retirement, should the money last that
long. Not only will this boost savings, it will get kids actively
engaged in banking from the time they are old enough to count. This
way, they can learn about things like compound interest in the best way
imaginable, by watching their own college fund grow.
Mr. Speaker, there are so many great ideas for improving financial
literacy rates. In fact, over 50 nonprofit community and private sector
organizations from across the country came to the Hill yesterday for
the annual Financial Literacy Day Fair. On display for policymakers
were hundreds of books, programs and resources on how to improve
financial literacy in ways that will make a positive impact on people's
lives. It was a remarkable success, and I would like to congratulate
the National Council on Economic Education, the Jump$tart Coalition,
Junior Achievement, and all the other sponsors who worked with Senators
Akaka and Enzi to put it together.
I would also like to recognize the impressive efforts of Charles
Schwab, John Hope Bryant and the other members of the President's new
Private Sector Advisory Council on Financial Literacy. It is
increasingly clear that teaching financial literacy requires
cooperation between the government and industry. This council will help
to facilitate that cooperation by making and implementing
recommendations for improving on current financial literacy outreach
efforts.
Mr. Speaker, Americans are a diverse group, but we all share some
very basic financial needs. We need to be prepared for tuition costs, a
home, 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 the economy. Every American should
have the opportunity and know-how to fulfill each of these goals. That
is why I urge my colleagues to support this resolution and show that
financial literacy remains a top priority for Congress.
I would like to once again thank Representative Hinojosa and his
staff, especially Greg Davis, for all their hard work on this
resolution. I would also like to thank the chairman and ranking member
of the Financial Services Committee, Mr. Frank and Mr. Bachus, for
helping to move this resolution through our committee in a bipartisan
way.
Mr. Speaker, I strongly support this resolution and urge my
colleagues to do the same.
Mr. Speaker, I reserve the balance of my time.
Mr. HINOJOSA. Mr. Speaker, I am delighted to be able to recognize and
yield 5 minutes to the gentlewoman from New York (Mrs. Maloney).
Mrs. MALONEY of New York. I thank the gentleman for yielding and
congratulate him on this resolution and all of his hard work.
Mr. Speaker, I rise in support of this resolution, and I want to
thank Chairman Hinojosa and Congresswoman Biggert for their leadership
in this area as co-chairs of the bipartisan Financial and Economic
Literacy Caucus.
As this resolution states, we need to work to encourage government
and private sector initiatives to enhance financial literacy. Given the
current turmoil in the financial markets, the housing crisis,
increasing credit card indebtedness and the economic downturn, it is
very important that all Americans become better educated and more
responsible financial consumers.
Financial literacy is important for many reasons, not the least of
which is to learn how to save. As some point out, we have lost that
ability. The Department of Commerce reports that personal saving as a
percentage of disposable income, already low, declined to zero in the
fourth quarter of 2007, and with the economic downturn, the situation
will likely get worse. We need to help individuals develop personal
savings skills, and this resolution will encourage them to do so.
The deregulation of financial markets and the rapid increase in the
number and complexity of financial products stump even the most
financially savvy. We know that financial literacy is especially low
for certain groups, such as those with lower educational attainment and
low income. If you don't understand how finance charges on mortgages,
credit cards or car loans work, you can't make decisions that help you,
and these decisions could push you further into debt without you
realizing it.
The efforts of our school system are uneven, and we need to encourage
them. In its 2007 Survey of the States, the National Council of
Economic Education found that only 41 States require economic standards
to be implemented in the high school curriculum, only 17 States
actually require an economics course for graduation, only 22 States
actually test students' knowledge of economics, only seven States
require that students take a personal finance course for graduation,
and only nine States actually test students' knowledge of personal
finance.
Just last month, the Jump$tart Coalition released its annual study,
which found that the 2008 high school senior class knows less about
principles of basic personal finance than their 2006 counterparts. This
does not bode well for their ability to manage their finances as a
result.
This resolution shows our commitment to improving financial literacy
through both public and private sector efforts. I urge my colleagues to
support it. I congratulate the authors, and I congratulate the chairman
and the ranking member for their efforts in moving it through the
committee.
Mrs. BIGGERT. Mr. Speaker, I yield 3 minutes to the gentleman from
Connecticut (Mr. Shays), an important member of the Financial Services
Committee.
Mr. SHAYS. Mr. Speaker, I rise today in support of the goals and
ideals of Financial Literacy Month and the commitment in Congress to
raise public awareness about the importance of financial education.
As we near the end of April, which is Financial Literacy Month,
credit card debt is on the rise, borrowers are defaulting on mortgage
payments, oil
[[Page H2819]]
prices are hitting historic highs, unemployment is increasing and
consumers continue to bite off more debt than they can handle.
Financially illiterate consumers cannot be expected to make sound
financial decisions because they simply are not equipped with the tools
and knowledge they need.
{time} 1530
It seems to me we can't expect people to be thoughtful consumers when
they are not afforded the knowledge they need to make wise choices
about their finances.
In light of recent turmoil in the subprime mortgage and credit
markets, financial education is now more important than ever. Federal
Reserve Chairman Ben Bernanke drew attention to this point when he
said, ``The crisis in the U.S. subprime mortgage market underscored the
need for Americans to develop a sound base of financial knowledge.''
I believe it is important to ensure Americans have access to the
knowledge and expertise they need to be savvy consumers and wise
investors. It is never too early to learn about the importance of good
credit and savings.
Parents and schools play an important role in educating tomorrow's
consumers, which is why I am supportive of initiatives like Jump$tart
that bring financial education into our Nation's classrooms. Jump$tart
is a national coalition of organizations dedicated to improving the
financial literacy of kindergarten through college-aged youth by
providing educational resources and advocating for increased personal
finance education. A 2008 survey of high school seniors conducted by
the alliance revealed that graduating seniors continue to struggle with
basic financial concepts.
First convened in December 1995, the Jump$tart Coalition for Personal
Financial Literacy determined that the average high school graduate
lacks basic personal financial management skills like even balancing a
checkbook. Laying the groundwork for financial independence at a young
age will create a generation of individually prosperous and fiscally
responsible consumers, and a corresponding stronger and better Nation.
Mr. HINOJOSA. Mr. Speaker, I submit the following extraneous material
for the Record:
Financial Counseling: a Meaningful Strategy for Building Wealth in the
Latino Community
(By Beatriz Ibarra, National Council of La Raza)
summary
The report shows that current policies to improve financial
literacy for Latinos fail to include one-on-one financial
counseling programs, the linchpin of any strategy to close
the wealth gap for Hispanics. Financial Counseling: A
Meaningful Strategy for Building Wealth in the Latino
Community provides specific policy recommendations on how to
increase programs proven to improve financial decision-making
of Hispanics--especially the more than 14.5 million who lack
a basic checking account.
Mr. BACA. Mr. Speaker, I rise to support H. Res. 1079, a resolution
supporting the goals and ideals of Financial Literacy Month and thank
my friend and colleague Mr. Hinojosa for offering it. I also want to
thank Mr. Hinojosa for his leadership of the Financial and Economic
Literacy Caucus (FELC), of which I am a proud member.
This year, the theme for my annual women's conference was ``Financial
Literacy for Women,'' to recognize the importance of educating and
encouraging women to take steps that could result in a better financial
future for themselves and their families. At this conference, I invited
speakers to motivate the women in my district to think about their
finances and plan for the future.
That's what this resolution is all about, ensuring that individuals
from all walks of life-- women, men, young and old--recognize the
importance of managing personal finances, increase personal savings and
reduce their debt. In these tough economic times it is important that
we all prepare for our financial future.
The past few months we have seen rising prices for gas to food, more
Americans losing their homes or the value in their homes, and rising
unemployment. Earlier this year, the New Direction Congress passed an
economic stimulus package to help families with high costs of gas,
health care and groceries, and to jumpstart our slowing economy.
Recovery Rebates will be in the hands of 130 million Americans,
starting early in May.
The strain of the economic downturn on middle-class families demands
a second growth and relief package now--and Congress will work in a
bipartisan way to find solutions for the immediate crisis and for a
long-term economic recovery for America.
I am a proud member of the House Financial Services Committee and
last week, we held a markup of legislation that will help address the
foreclosure crisis. The first bill, H.R. 5818 provides $15 billion in
loans and grants to States to allow them to buy up repossessed
properties. This will help ensure that abandoned homes don't stay on
the market too long to keep home prices from dropping even further. The
second bill, H.R. 5830 allows the FHA to insure up to $300 billion in
subprime loans so that these families in danger of foreclosing can
refinance into a more affordable loan. It also provides money to
housing counselors to increase their efforts in underserved, poor, and
minority communities.
Congress is doing its part to help stabilize our economy and help
keep families in their homes. This resolution supports our efforts by
calling on the President to issue a proclamation calling on the Federal
Government, States, localities, schools, nonprofit organizations,
businesses, other entities to observe Financial Literacy Month with
community programs and events. This outreach will help us raise public
awareness about financial education and is particularly important for
our country's present and future economic well-being.
I urge my colleagues to support H. Res. 1079.
Mrs. BACHMANN. Mr. Speaker, I rise to support H. Res. 1079. Financial
stability is the foundation on which freedom and prosperity are built.
It is vital that all Americans grab hold of their personal finances so
that families and future generations of Americans have the opportunity
to prosper. I rise to honor the goals and ideals ``Financial Literacy
Month'' represents, and urge the nation to secure their finances and
plan for the years to come.
As a member of the Financial Literacy Caucus and co-sponsor of this
resolution, I join my colleagues in acknowledging the importance of
financial planning and encourage Americans to set goals rather than
live from paycheck to paycheck. With the assistance of dedicated
financial planners, Americans can be educated and assisted with setting
up a sound financial plan and provide for their family a more secure
life.
Through a financial plan, we begin to dream. When we dream, we have
the incentive to save; and through savings, we flourish financially.
Through a variety of activities, workshops, and seminars in local
communities, citizens will have the ideal opportunity to speak with
knowledgeable financial planners and begin to paint a picture of a more
sound and secure future of financial independence.
Mr. Speaker, I am thrilled to co-sponsor this resolution so that many
Americans, for the first time, can begin to dream of a life of
financial security, and work to reach their highest goals and
aspirations.
Ms. JACKSON-LEE of Texas. Mr. Speaker, I rise today in strong support
of H. Res. 1079, supporting the goals and ideals of Financial Literacy
Month. I would first like to thank my distinguished colleague, Ruben
Hinojosa of Texas, for introducing this important legislation. I
believe basic financial literacy is imperative to ensure that
individuals are capable of making financial choices, as well as
managing money, credit, debt, and risk and becoming responsible
workers, heads of households, investors, entrepreneurs, business
leaders, and financially stable citizens. Understanding how each of
these topics work together and affect each other is important for
laying the groundwork for solid financial foundation for you and your
family.
Personal financial management skills and lifelong habits begin to
develop during childhood. In 2006, the JumpStart Coalition for Personal
Financial Literacy found that high school seniors knew less about
principles of basic personal finance than did high school seniors 7
years earlier, and the average scores in both years were failing
grades. Financial security is the cornerstone of prosperous
communities, nurturing neighborhoods and strong families. However, many
individuals and families are experiencing financial crisis because of
inadequate savings, too much debt and poor planning for potential major
life events. Today, a majority of consumers are experiencing some sort
of financial difficulty causing a significant impact on their everyday
lives. In fact, Americans carry more than $2 trillion in consumer debt
and 30 percent of consumers report having no extra cash--making it
impossible to escape the financial burden of living paycheck to
paycheck. On average, U.S. households carry about $8,000 in credit card
debt alone. The total U.S consumer credit card--revolving credit--debt
was $937.5 billion in November 2007 which is absolutely unheard of.
Far too many Americans are insufficiently educated about their
personal finances. The personal savings rate in the United States was
zero percent at the end of the fourth quarter of 2007, which puts it
among the lowest since
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the government began collecting the data in 1959. Shockingly, about
half of adults--49 percent--say they are concerned they have not paid
enough attention to managing their finances as they should have and 48
percent are concerned they don't know enough about financial planning;
4 out of 10 American workers are not saving for retirement. Public,
community-based, and private sector organizations throughout the United
States are working to increase financial literacy rates for Americans
of all ages and walks of life through a range of outreach efforts,
including media campaigns, Web sites, and one-on-one counseling for
individuals.
Mr. Speaker, I urge Members of Congress in a time of economic crises
and brink of economic recession, to promote literacy in all aspects of
finance. I support the goals and efforts established by the National
Council on Economic Education, the JumpStart Coalition for Personal
Financial Literacy, its State affiliates, and its partner organizations
for supporting the goals and ideals of Financial Literacy Month,
including raising public awareness about financial education. I
recognize the importance of managing personal finances, increasing
personal savings and reducing indebtedness in the United States. I urge
my colleagues to join me in supporting this legislation that requests
the President to 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 with the
goal of increasing financial literacy rates for individuals of all ages
and walks of life.
Mr. HINOJOSA. Mr. Speaker, I yield back the balance of my time.
Mrs. BIGGERT. I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Texas (Mr. Hinojosa) that the House suspend the rules
and agree to the resolution, H. Res. 1079.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. HINOJOSA. Mr. 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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