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Congressional Testimony
February 5, 2002 Tuesday
SECTION: CAPITOL HILL HEARING TESTIMONY
LENGTH: 801 words
COMMITTEE:
SENATE BANKING HOUSING AND URBAN AFFAIRS
HEADLINE: FISCAL 2003 BUDGET: TREASURY DEPARTMENT
TESTIMONY-BY: DEBBIE STABENOW (D-MI), SENATOR
BODY: Opening Statements of Committee Members
Opening Statement of Senator Debbie Stabenow (D-MI)
Hearing on
"The State of Financial Literacy and Education in America."
Tuesday,
February 5, 2002
Thank you, Mr. Chairman. I am glad that you have called
this hearing. As you have pointed out, financial literacy is so critical. It is
as necessary in today's world as basic reading and math skills. Unfortunately,
it often does not get the attention it deserves.
Last December, back in
my home state of Michigan, I attended an event at Eastern High School in Lansing
where the Michigan Jump
art Coalition for Personal Financial Literacy
released the findings of a statewide survey in conjunction with the National
Institute for Consumer Education.
What we learned was disturbing.
Michigan high school seniors generally did not have a strong grasp on basic
personal finance concepts related to saving and investing, money management, and
credit.
I doubt our students are much different from students around the
country.
One interesting finding in the study was that students who
participated in the Stock Market Game, a national investment game, did better in
the survey than students who completed an entire course in money management or
even an entire course in economics.
This seems to indicate that
reality-based, interactive learning curriculum is critical to instilling basic
financial literacy concepts in our students. This finding is a lesson that I
hope that educators and other policymakers will explore more thoroughly.
Mr. Chairman, if we are to improve financial literacy, then we must make
it a priority in our schools. The education bill that we passed not too long ago
establishes a national financial literacy clearinghouse and I hope that will
help us to streamline our education efforts.
In addition, I am happy to
note that, in my state, the legislature is moving forward, in a bi-partisan way,
to make financial literacy a priority.
The State House of
Representatives, last month, overwhelmingly passed a bill to ensure that the
State Department of Education establishes model programs in financial education.
The bill also makes it clear that Michigan schools should set aside
federal education funds specifically for financial education programs. I hope
the state Senate will act quickly on this proposal.
Consistent with this
emphasis on financial literacy, in Michigan, we test our students on economic
concepts in the 5th, 8th, and 11th grade as part of the Michigan Educational
Assessment Program. It is so important that we continue to do this throughout
elementary and secondary school. Economics should be an integral part of the
curriculum at every age level in every part of our country.
Mr.
Chairman, while the kindergarten through 12th grade period is an important time
to educate the public, we in Michigan and around the country need to look at
improving financial literacy among adults as well.
The financial
illiteracy of adults in this country is both startling and troubling. And, it
makes too many in our society vulnerable to
predatory lending
practices.
That's why I was so pleased to join with Freddie Mac last
year in launching the anti-
predatory lending campaign "Don't
Borrow Trouble" in Southeast Michigan. Freddie Mac is a real leader in educating
our public about their rights and responsibilities when buying a home.
I
hope that Freddie Mac, and its counterpart, Fannie Mae, will continue to be
leaders in tackling abusive lending - especially as the two companies move
increasingly into the subprime market.
Mr. Chairman, I look forward to
hearing from our witnesses today. I hope that this set of hearings is just the
beginning.
I want to work with my colleagues, community groups,
financial services companies, and consumer groups to make financial education an
on-going effort.
We need more campaigns like "Don't Borrow Trouble."
Campaigns for managing credit card debt and for keeping a good credit
rating. And, it must be done in a sustained and coordinated way. That's the way
we did it in Detroit. We brought everyone to the table, assessed the community's
needs, and implemented a program.
Furthermore, we need the financial
services community to step up and reach out to the "unbanked" and "underbanked"
even when it's not their most profitable demographic group.
We need to
improve financial literacy to help my generation as well as our children and
their children better understand saving and investment needs and to help plan
appropriately so that retirement years are comfortable times - not a time when
people have to choose between necessities like food and prescription drugs.
All of this is possible and I hope today will be an important step
forward.
Thank you, Mr. Chairman.
LOAD-DATE: February 11, 2002