CUNA Comment Letter
Improving Financial Literacy in Schools
April 12, 2007
Financial Literacy and Education Commission
U.S. Department of the Treasury
1500 Pennsylvania Avenue, N.W.
Washington, DC 20220
RE: Improving Financial Literacy in Schools (Kindergarten Through Postsecondary)
Dear Sir or Madam:
The Credit Union National Association (CUNA) appreciates the opportunity to provide our views on the subject of raising the financial literacy of kindergarten through postsecondary students. CUNA commends the efforts put forward by the Financial Literacy and Education Commission (Commission) to implement the National Strategy for Financial Literacy, including the two-day Summit on Kindergarten Through Postsecondary Financial Education co-hosted with the U.S. Department of Education. Donna Steckino, President/CEO of Community Credit Union in Lewiston, Maine, was a panelist at the Summit, representing her credit union, CUNA, and the Maine Credit Union League.
CUNA, by way of background, represents approximately 90% of our nations 8,700 state and federal credit unions, which serve nearly 87 million members. CUNAs letter was developed with significant contributions from Ms. Steckino and the staff of CUNAs Center for Personal Finance.
Summary of CUNAs Position
- The not-for-profit sector can participate in a number of ways in promoting financial education. Not-for-profit organizations can develop, deliver and sponsor financial education programs. They should help define and determine the necessary curriculum to help students achieve basic financial skills. They can fund research into the most effective means to teach financial skills. They can promote financial literacy through funding public service announcements.
- Credit unions have traditionally considered financial education to be part of their social mission. Indeed, education is one of the operating principles of the international credit union movement. Besides providing numerous programs and materials that credit union volunteers can utilize at schools to teach financial education, CUNA hosted a National Financial Literacy Summit in September last year to bring together major organizations involved in the credit union movement's financial literacy initiatives to explore the future of those efforts. Specifically, Summit participants explored what opportunities exist for working together more closely among themselves and with outside partners in order to address the financial literacy needs of key demographic groups, including the youth market. Some of the major initiatives and materials are discussed in detail below.
It is important for the private sector to be involved in financial education in schools. At the same time, there are several challenges, such as limited funding for other personal finance materials, often requiring fundraising; lack of uniformity in teaching styles and lessons; disparate accessibility to supplemental private funding; and the inability to track results consistently.
Until financial education is mandated by the government, financial institutions, other financial services companies, and not-for-profit organizations can provide funding and employee- volunteers to teach classes. In return, it seems reasonable to give organizations some recognition for their donations of money and staff time.
Volunteers need to establish good relationships with their local schools, with the goal of preparing better informed consumers before they leave home to enter college or the workforce. Credit union volunteers, working with the free NEFE® High School Financial Planning Program®, have found that there are many benefits from this involvement, including personally interacting with youth; contributing a variety of points of view; and bringing the real world into the classroom.
CUNA and credit unions have a proud tradition and history of helping their members become better educated regarding their personal finances. Credit unions actively promote the education of their members, officers, and employees, along with the public in general, in the economic, social, democratic, and mutual self-help principles of credit unions. The promotion of thrift and the wise use of credit, as well as education on the rights and responsibilities of members are essential to the dual social and economic character of credit unions in serving member needs. In fact, one of the reasons CUNA was founded was to promote greater awareness and understanding of financial matters among credit union members of all means.
From their inception in the U.S., credit unions have made financial education a part of their mission, providing financial information and training to members in groups and on a one-to-one basis. Many of our member credit unions actively sponsor community and school-based educational programs and seminars, providing individuals with resources such as: how to maintain a share draft account; how and what to look for when purchasing family transportation; how to complete a mortgage loan application; what is involved when applying to finance or repair a home. Many credit unions are actively working in schools to teach personal finance skills to children and teenagers. We also provide credit union staff as volunteers to read to elementary school children, participate in the Partners in Excellence program with the local school district, and provide scholarships to needy high school students to attend institutions of higher learning. These services are often provided at no cost and are open to credit union members and the communities they serve.
CUNA Financial Literacy Summit
Today, financial literacy and education is an integral part of the work credit unions do in serving their members. In recognition of this fact, CUNA hosted a National Financial Literacy Summit in Washington, D.C. on Sept. 26, 2006. The objective in convening the Summit was to provide a forum for key credit union system organizations to educate one another about their financial literacy programs, share future plans, find common ground, and suggest new ways forward. Participants in the summit included: leaders from state credit union leagues, the CUNA board or their designees, the National Credit Union Foundation, the state foundation network, and credit union system organizations including the National Federation of Community Development Credit Unions, Defense Credit Union Council, CUNA Mutual Group, National Youth Involvement Board, Education Credit Union Council, AACUL, the Association of Corporate Credit Unions, and the World Council of Credit Unions.
Organizations that CUNA works closely with on financial education efforts which participated in the Summit were: the Congressional financial and Economic Literacy Caucus; Treasury Department (Deputy Assistant Secretary for Financial Education); the National Credit Union Administration; the Consumer Federation of America; the National Endowment for Financial Education® (NEFE); the national Jump$tart Coalition for Personal Financial Literacy; JA Worldwide (Junior Achievement); and the USDA Cooperative State Research, Education and Extension Service.
The 2000 agreement for a CUNA-NEFE partnership came about through a mutual belief that teens with financial literacy are better prepared for challenges they will face striving to achieve their life goals. CUNA's National Financial Literacy Summit became the springboard for an announcement of a new partnership uniting the resources of NEFE with the outreach potential of Junior Achievement. The Summit highlighted and explored the future of such partnership efforts.
The report generated by the Summit includes guiding principles for youth financial education, including:
- Financial goals for young people must be personal.
- Youth must develop a savings habit and earn regular income at an early age.
- They must have the freedom to make real decisions and real mistakes in handling money.
- Parents should have or develop the skills to set good examples for their children and must reinforce their childrens learning.
From the credit union side, credit unions must articulate and demonstrate their commitment to youth financial education. And financial education programs should connect to later learning by fostering cradle-to-grave learning tied to specific age-appropriate financial services.
Jump$tart Coalition for Personal Financial Literacy
CUNA is an active member of the Board of Directors for the Jump$tart Coalition, an organization whose mission is to ensure that youth and young adults are equipped with the financial literacy skills that are necessary to make informed financial decisions. CUNA staff chaired the task force that reviewed Jump$tarts curriculum standards and produced the revised 2007 National Standards in K-12 Personal Finance Education.
National Endowment for Financial Education (NEFE)
CUNA has formed a partnership with the National Endowment for Financial Education (NEFE) and the Cooperative Extension Service (CES) to teach the High School Financial Planning Program (HSFPP) to high school seniors across the nation. The HSFPP is a fully developed curriculum, consisting of six units that integrate easily into a number of existing high school courses, such as math, social studies, economics, and consumer or life science. HSFPP materials provide a basic introduction to personal financial planning, covering the impact of career and work factors on earnings potential, spending and saving money, using and managing credit effectively, protecting assets, and the time value of money. Students also are taught how to develop their own personal spending and savings plan.
CUNA helps (with CO-OP Financial Services, the nations largest credit-union owned EFT network and processor) underwrite the cost of printing HSFPP course materials that are offered free of charge to any school requesting them, and credit union staff volunteer to either teach the course itself, or to train teachers how to teach it. The program is based on the idea that discipline in managing money is best achieved if it is learned early in life, and is proven to secure results. Since the CUNA-NEFE partnership began in 2000, more than 3.5 million high school seniors have participated in the program.
CUNA and its state affiliates work to promote the HSFPP in their local schools. By encouraging teachers to team teach the program with a financial professional, which CUNA and the state associations work to provide on request.
Since 2000 (the first year of CUNA/credit union involvement with the program):
- More than 400,000 high school students have participated in the program directly through credit unions involvement.
- More than 2,000 high schools have participated with credit unions.
- This program has been revised, with credit union help, to ensure that the content remains relevant to the times, and reflects the latest in good consumer practices (e.g. online purchasing).
JAs Biz Kid$ -- TV Series and Classroom Curriculum
CUNAs 501(c)(3) charitable affiliate the National Credit Union Foundation (NCUF) is the largest contributor to JAs Biz Kid$, a new financial education television series being launched this month on PBS. NCUF has made a three-year commitment worth nearly $2 million to produce the TV series targeting grade school students and their families.
Each TV episode will be converted into classroom content to teach students in grades 4-9 about financial literacy and entrepreneurship through a partnership with Junior Achievement (JA). Junior Achievement plans to integrate the JAs Biz Kid$ curriculum into 20,000 schools and 178,000 classrooms. Credit union employees and volunteers will be invited to participate in the financial education of 4 million students through the Junior Achievement network.
Financial literacy learning objectives include:
- Financial Responsibility and Planning;
- Income and Career;
- Money Management;
- Asset Protection; and
- Wealth Building: Saving and Investing.
Entrepreneurship learning objectives include:
- Entrepreneurial Skills;
- Job Readiness Skills; and
- Business Functions.
The JAs Biz Kid$ program will serve as a complement to NEFEs High School Financial Planning Program, by providing financial education experiences for students before they become high school seniors.
With the long-range plan that JAs Biz Kid$ become the cornerstone of a broader business education campaign, the program intends to help launch a new generation of business-savvy, socially conscious kids.
National Youth Involvement Board
CUNAs member credit unions created the National Youth Involvement Board (NYIB) in 1972 in order to gain grassroots input from individuals working in credit unions or CUNAs league affiliates to create a national system for the dissemination of information and resources regarding youth participation in the credit union movement. NYIB works with its participating credit unions to better prepare them to serve the projected 90 million-strong youth market. NYIB provides credit unions access to proven tools, techniques, and resources to learn the latest advancements in youth marketing, innovative ideas for educating youth about money, and a built-in network of peers with diverse experiences and valuable best-practices. During a typical school year, the NYIB network of volunteer classroom presenters teaches about 300,000 students about personal finance.
Outreach to Hispanic Communities
The Hispanic community accounts for more than 40 percent of the nations population growth over the past 16 years (1990-today). Hispanic immigrants are assimilating into the U.S. culture. Since 2000, the number of U.S.-born Hispanics has surpassed immigration as the largest source of Hispanic growth. However, within this group particularly with newer Americans a tradition of using financial institutions regrettably is almost non-existent. Since newer Americans among Hispanics are traditionally distrustful of financial institutions, it puts them outside of the financial mainstream.
The Hispanic market is also young, with a median age of 27 meaning the market represents significant long-term membership growth and service potential. And credit unions have a long tradition of bringing those outside of the financial mainstream (such as new workers; young sailors, soldiers and Marines; others) into the community by offering low-cost financial services, and a secure, safe and sound place to do business. Hispanics are also looking for some institutions to offer them services.
CUNA has developed extensive materials for credit unions to use in reaching out to the growing Hispanic community such as Thrive by Five, CUNAs financial literacy resource for parents of preschoolers (see below) and our recently introduced Quick Start Guide, which includes step- by-step instructions for developing products and relationships for this mostly underserved, but growing, segment of the population.
In addition, CUNAs Hispanic Resource Center on our website offers (among other things) a resource file library, links to additional resources for serving Hispanics, Our Quick Start Guide, and the report of our Hispanic Task Force, updated regularly, on how credit unions can better serve this burgeoning market.
CUNA's league affiliates and member credit unions have also worked to put student run credit unions and/or branches in schools. Involving students in the daily operation of a credit union provides them greater insight to financial safety and soundness, and provides them direct access to savings and other programs.
Though the ideal situation is to teach youth while they are young about financial best practices, CUNA and its member credit unions recognize the need and importance to offer adult financial literacy programs. Though credit unions already provide financial counseling and financial planning services to their members as a regular service, CUNA strongly supported the provisions in the Bankruptcy Abuse and Consumer Protection Act (S. 256) that required mandatory financial counseling-- ensuring individuals are fully apprised of all their options before making a decision that could prevent future access to affordable financial services.
CUNA has recognized another key component of financial literacy is outreach to the underserved communities. CUNAs National Credit Union Foundation, with support from the Ford Foundation, implemented a nationwide financial literacy campaign called Plan For It. Save For It to address the need for increased savings among low-to-moderate income families. More than 4,000 credit unions currently use the Plan For It. Save For It guide to increase savings among low-income credit union members. In addition, financial literacy training contributes to the greater control of ones financial future and retirement savings, and can lead to the creation of an entrepreneurial class in local communities.
For K-12 students, it is important to keep the process simple and fun. We understand that, for example, the Maine Credit Union League has hosted a financial literacy fair for high school students. The curriculum is requisite preparation for students' journey through "life" on fair day. A local community college donates space for the event. On the day of the fair, students get budget worksheets with salaries based on their career choices and through visits to various booths, such as housing, transportation and credit. Students are asked to make real life choices and experience the exercise of balancing their budget on income allocated from their career choices. As the fair progresses, students learn the effects of their choices, such as the sports car, home or vacation they cannot initially afford. Volunteer coaches then guide the students through various options to bring their budgets back in line.
CUNA Youth Financial Education Programs
CUNA and the credit union movement have long worked to provide as much interactive financial education as possible. CUNA and the credit union movement have stepped up to the plate in this respect. Besides the NEFE High School Financial Planning Program, CUNA provides several youth financial education programs at no charge. Among them are:
- Thrive by Fivea free program to help parents teach their preschoolers about spending and saving from an early age. A special task force of credit unions and Cooperative Extension educators developed the materials, had them reviewed by experts in child development, and tested them with focus groups of English- and Spanish-speaking parents and preschool children. "Thrive by Five" materials include eight activities parents can download at no charge to help teach their young children such concepts as waiting to spend money, how not to lose money, how money is used to buy something, that when money is spent, it's gone, and that having fun or giving gifts does not have to cost money.
CUNAs main goal is to encourage healthy attitudes about money in young children. Long before they enter school, children observe adults using money and buying things and they watch television daily and see thousands of commercials each year. We also acknowledge that parents are not the only influence on what their children learn about using money. However, if children are learning basic lessons about money from their parents, parents increase the chance their childrens values will be similar to theirs. Credit unions distribute the materials to members by linking through their websites. Since 2005, when the resource first appeared on CUNAs web site, more than 60,000 visitors have downloaded a total of 100,000 copies of the eight teaching activities in English and Spanish and viewed an additional 40,000 pages of supplemental materials.
- National Youth Saving Challengean annual National Credit Union Youth Week promotion that helps credit unions encourage young members to make saving and investment deposits. In its third year (2006), more than 66,000 youth members nationwide saved more than $9.6 million in their credit unions in a single week! This free Savings Challenge program helps credit unions build strong relationships with young people and their families, and encourages them to make deposits at their credit unions.
Goals of the Savings Challenge include an opportunity for youth to: open accounts; introduce themselves to the concept of setting financial goals and saving for them; visit the credit union and learn first hand they are welcome; and, empower themselves with the lifelong tool of financial education. In the three years that CUNA has sponsored this program: the level of deposits has grown nearly sevenfold; the number of youth involved has expanded fourfold; and nearly 14,000 young savers have opened new accounts.
- Desjardins Youth Financial Education Awardan annual recognition of the best of credit union organizations efforts to improve financial literacy. Besides showcasing the exemplary programs of credit union leagues, individual credit unions, and credit union chapters, the Desjardins award also honors members of Congress who have proved themselves to be financial literacy champions.
- Online Directory of Credit Unions with In-School Branchesa listing of credit unions maintaining student-run operations in K-12 schools. As of April 9, 2007, 153 credit unions in 31 states and the District of Columbia reported operating branches in 548 schools.
CUNA Youth Financial Education Products
CUNA has prepared a number of products for sale to credit unions to assist them in educating young members and potential members. These include:
- Googolplex: The CU Guide for Student Moneymakersan online youth magazine, largely written by youth, for credit union youth of all ages. The fun games, stories, and activities deal with the money matters and life issues each age group faces.
- Guides to Independencean online interactive curriculum that introduces financial services to teenagers and rewards them with free music downloads. Examples of curriculum topics include: how to buy a used car; how to use a check card; how to get a loan; how to manage debt; and how to pay for school.
- Additional Youth Products, such as Mad City Moneya budgeting simulation, several coloring and activity books, and a collection of brochures to help parents with questions about allowances and other family financial concerns.
CUNA and its member credit unions have long been in the forefront of developing and implementing effective financial literacy programs for members of all ages and from all economic backgrounds. CUNA appreciates the opportunity to provide comments on our financial literacy outreach efforts, and looks forward to continuing to work with the Commission to bring the greatest access and awareness of financial literacy programs to our members and the youth in our schools.
If you have any further questions, please feel free to contact me by phone at (202) 508-6743 or by e-mail at email@example.com.
Senior Regulatory Counsel
Credit Union National Association