[Congressional Record (Bound Edition), Volume 150 (2004), Part 3]
[Senate]
[Pages 3744-3745]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        FINANCIAL LITERACY MONTH

  Mr. NICKLES. I ask unanimous consent the Senate proceed to the 
immediate consideration of S. Res. 316, submitted earlier in the day by 
Senators Akaka, Allen, Sarbanes, Corzine, and others.
  The PRESIDING OFFICER. The clerk will report the resolution by title.
  The legislative clerk read as follows:

       A resolution (S. Res. 316) designating April 2004 as 
     ``Financial Literacy Month.''

  There being no objection, the Senate proceeded to consider the 
resolution.
  Mr. AKAKA. Mr. President, I am in support of this resolution 
designating April, 2004, as Financial Literacy Month, and asking the 
President to issue a proclamation calling on the Federal Government, 
States, localities, schools, nonprofit organizations, businesses, other 
entities, and the American people to observe the month with appropriate 
programs and activities. I thank Senators Allen, Sarbanes, Corzine, 
Santorum, Kohl, Thomas, Johnson, Kennedy, Schumer, Levin, Lautenberg, 
Murray, Landrieu, Durbin, Inouye, and Crapo for standing with me in 
advancing financial and economic literacy for our entire citizenry.
  Last year, the Senate designated April, 2003, as Financial Literacy 
for Youth Month by adopting my resolution, S.Res. 48, to highlight the 
need for increased financial and economic literacy and education in our 
country. Since then, there has been wider recognition that we need to 
broaden the spotlight to include problems resulting from pervasive 
financial illiteracy among adults of all ages as well, no matter in 
which region of the country they live, in which sector of the economy 
they work, or for which side of the aisle they vote. All of us know at 
least one person in our lives who has suffered the sometimes tragic and 
often unavoidable results of not knowing how to create and stick to a 
budget, not understanding the merits of maintaining good credit 
history, or not having the analytical skills to make decisions based on 
factors in the economy.
  We are witness to the cumulative results of these individual 
decisions. Consumer debt rose at a greater rate than was expected in 
2003, increasing to nearly $2 trillion in September, 2003, as noted by 
the Federal Reserve. The rate of foreclosures for FHA loans was the 
highest ever recorded in the third quarter of 2003, according to the 
Mortgage Bankers Association National Delinquency Survey. The 
Congressional Research Service reports that the percentage of income 
used for household debt payments, including mortgages, credit cards, 
and student loans, rose to the highest level in more than a decade in 
2001 and remained above 13 percent in 2003. Also, that personal savings 
as a percentage of personal income decreased from 7.5 percent in the 
early 1980s to 2.3 percent in the first three-quarters of 2003. As 
reported in the Associated Press, personal bankruptcies nearly doubled 
in the past decade, including more than 1.6 million people who filed 
for personal bankruptcy in fiscal year 2003. And a final sign of our 
times, despite technological advances that make it even more convenient 
and less costly to manage our money through accounts at banks and 
credit unions, Fannie Mae reports that between 25 million and 56 
million adults are `unbanked', or not using mainstream, insured 
financial institutions. All of this tells me that we cannot overlook 
our adult population and their need for financial literacy and 
education.
  Even so, prevention remains key, and education lies at the heart of 
prevention. We must continue to work in our schools to convey important 
and practical lessons personal finance and economics, so that our 
students may leave secondary and postsecondary, and even elementary 
education, with age-appropriate tools and skills that they may continue 
to hone throughout their lives. In addition to learning and practicing 
the essential basics in reading, writing, and arithmetic, they should 
understand how they can do their part toward helping their families 
stick to the budget constructed on the kitchen table, saving toward 
their college tuition, or helping to identify future opportunities that 
will benefit everyone in their families in the long run.
  As an example, the Hawaii Council on Economic Education, with 
assistance from the Securities Education Division within the Hawaii 
Department of Commerce and Consumer Affairs, is sponsoring the Hawaii 
Stock Market Simulation, which is an interactive tool to help students 
learn about how the U.S. financial market system works. By gaining an 
understanding of the securities markets, students in third grade 
through twelfth grade can learn about the importance of saving and 
investing to help provide a sound economic and financial base for their 
own future. Student teams invest a hypothetical $100,000 in stocks, 
bonds, and mutual funds and compete statewide. Last year, I met with 
some of the winning teams who, in the short 10-week period, raised the 
value of their portfolio to as much as $130,273.49--an amount 
accomplished by a team from Kalani High School. In the Fall 2003 
competition, a team from Keaau High School achieved a portfolio value 
of $129,930.42. Even in the elementary division in the most recent 
competition, a team from Moanalua Middle School invested successfully 
for a portfolio of $117,877,73. This is just one example of the types 
of competitions held around the country that gets kids excited in 
investing and saving while cautioning them about speculation, pulling 
their parents and other family members into the exercise, and give them 
the tools to analyze their own personal finance decisions, well into 
their adult years.
  Support for economic and financial literacy efforts in our schools is 
a worthwhile investment for our country to make in our future 
generations. I am highlighting this point in this resolution, as well 
as working to provide more resources through the Excellence in Economic 
Education Act for K-12 education--rather than terminating this program 
as President George W. Bush recommended in his fiscal year 2005 budget, 
and working with my colleague from Wyoming, Senator Enzi, to strengthen 
this investment in our students in colleges and universities through 
our bill, S. 1968, the Financial Literacy in Higher Education Act.
  And once again, economic and financial literacy must reach adults in 
this country, particularly to help those who are heads of households, 
workers, and business owners plan for short- and long-term investment, 
savings, and retirement, as well as avoid the grasp of predatory 
lenders that peddle products such as high-interest Refund Anticipation 
Loans, high-cost remittances, payday lending, and abusive financial 
marketing practices. I call to the attention of my colleagues the 
establishment of the Financial Literacy and Education Commission, and 
look forward to its development of a national strategy that will 
coordinate Federal efforts in financial and economic literacy. I also 
recognize the efforts of organizations such as the Jump$tart Coalition 
for Personal Financial Literacy, the National Council on Economic 
Education, and others on the forefront of this movement for their 
parallel endeavors.
  I urge my colleagues in the Senate to join me in commemorating all of 
these efforts to forward financial and economic literacy in this 
country by recognizing April 2004 as Financial Literacy Month, and I 
urge that they support this resolution.
  Mr. NICKLES. I ask unanimous consent the resolution and preamble be 
agreed to en bloc, the motion to reconsider be laid on the table, and 
any statements be printed in the Record without intervening action or 
debate.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The resolution (S. Res. 316) was agreed to.
  The preamble was agreed to.
  The resolution, with its preamble, reads as follows:

[[Page 3745]]



                              S. Res. 316

       Whereas only 26 percent of 13- to 21-year olds reported 
     that their parents actively taught them how to manage money;
       Whereas a 2002 survey by the National Council on Economic 
     Education found that a decreasing number of States include 
     personal finance in their education standards for students in 
     kindergarten through grade 12;
       Whereas a 2002 study by the Jump$tart Coalition for 
     Personal Financial Literacy found that high school seniors 
     know even less about credit cards, retirement funds, 
     insurance, and other personal finance basics than high school 
     seniors did 5 years ago;
       Whereas 55 percent of college students acquire their first 
     credit card during their first year in college, and 83 
     percent of college students have at least 1 credit card;
       Whereas personal savings as a percentage of personal income 
     decreased from 7.5 percent in the early 1980s to 2.3 percent 
     in the first 3 quarters of 2003;
       Whereas today more than 42,000,000 people in the United 
     States participate in 401(k) plans;
       Whereas a 2002 Retirement Confidence Survey found that only 
     32 percent of workers surveyed have calculated how much money 
     they will need to save for retirement;
       Whereas only 30 percent of those surveyed in a 2003 
     Employee Benefit Trend Study are confident in their ability 
     to make the right financial decisions for themselves and 
     their families, and 25 percent have done no specific 
     financial planning;
       Whereas between 25,000,000 and 56,000,000 adults are 
     unbanked, i.e., not using mainstream, insured financial 
     institutions;
       Whereas millions of people in the United States derive 
     great benefits from the wide variety of products and services 
     offered by the financial services industry in the United 
     States, and such financial products and services allow 
     individuals and families to build homes, start businesses, 
     finance educations, buy cars, and meet the everyday needs of 
     everyday life;
       Whereas expanding access to the mainstream financial system 
     provides individuals with lower cost, safer options for 
     managing their finances and building wealth;
       Whereas a greater understanding and familiarity with 
     financial markets and institutions will lead to increased 
     economic activity and growth;
       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;
       Whereas financial literacy empowers individuals to make 
     wise financial decisions and reduces the confusion of an 
     increasingly complex economy;
       Whereas personal financial management skills and life-long 
     habits develop during childhood;
       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; and
       Whereas Congress found it important enough to ensure 
     coordination of Federal financial literacy efforts and 
     formulate a national strategy that it established the 
     Financial Literacy and Education Commission in 2003 and 
     designated the Office of Financial Education of the 
     Department of the Treasury to provide support for the 
     Commission: Now, therefore, be it
       Resolved, That the Senate--
       (1) designates April 2004 as ``Financial Literacy Month'' 
     to raise public awareness about the importance of financial 
     education in the United States and the serious consequences 
     that may be associated with a lack of understanding about 
     personal finances; 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.

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