Draft National Strategy for Financial Literacy 2010

September 17, 2010

Department of the Treasury
Office of Financial Education
1500 Pennsylvania Avenue, NW
Washington, DC 202201

RE: Draft National Strategy for Financial Literacy 2010

To Whom It May Concern:

The Credit Union National Association (CUNA) appreciates the opportunity to comment on the Financial Literacy and Education Commission’s (Commission’s) request for comment regarding the draft National Strategy for Financial Literacy 2010 (National Strategy). The National Strategy is intended to provide a broad strategic overview for the financial literacy and education field. By way of background, CUNA is the largest credit union trade organization in the country, representing approximately 90 percent of our nation’s nearly 7,700 state and federal credit unions, which serve approximately 93 million members.

Summary of CUNA’s Views

Discussion of CUNA’s Views

General Comments

We applaud the Commission’s work in the area of financial literacy and education. As noted in our September 10 letter to the Commission in response to its proposal on core competencies, we believe the current level of financial literacy on a national scale is cause for concern and the Commission’s efforts are critical to effectively address the issue.

The Commission’s requests for comment for both the draft National Strategy and the proposed core competencies do not require formal comment solicitation under the Administrative Procedures Act. However, as mentioned in our previous comment letter, we believe financial literacy is of such great importance that the Commission should allow public input for a minimum 30-day comment period.

The Commission has proposed a draft National Strategy that is aimed at providing a broad strategic overview for the financial literacy and education field. Specifically, the proposed National Strategy is intended to create an overarching framework that all organizations involved with personal-finance education, research, practice, and policy will find useful to help guide their work over the next three to five years.

As proposed, the draft National Strategy identifies four primary goals, these are: increase awareness of and access to financial education, determine and integrate core financial competencies, strengthen provision of financial education, and identify and share effective practices. In addition, the Commission has identified five action areas, these are: policy, education, practice, research, and coordination. The proposed National Strategy makes clear that not every organization would engage in each area, but instead would find its own appropriate balance.

Overall, we are very encouraged by the proposed goals and action areas the Commission has identified. Specifically, we believe the list of proposed action areas is thorough and consistent with the underlying objectives of the National Strategy.

Comments Specific to the Commission’s Questions

Do you agree with the vision statement? If not, what are your suggestions?

The statement describes the National Strategy’s long-term vision of financial success, financial stability, and financial security for all individuals and families of the U.S.

We agree with the Commission’s proposed vision statement.

Do you agree with the mission statement? If not, what are your suggestions?

The proposed mission statement is, to set strategic direction for policy, education, practice, research, and coordination so that individuals and families make informed financial decisions.

We agree with the proposed mission statement. In particular, we strongly support the proposed objective of allowing individuals and families to make informed financial decisions. We believe the decision-making component—that is, enabling consumers to independently assess relevant information when making choices—is vital to the success of the National Strategy.

Do you agree with the goal statements? If not, which goal statement(s) would you change and how?

The goal statements the Commission has proposed are: increase awareness and access to financial education, determine and integrate core financial competencies, strengthen provision of financial education, and identify and share effective practices.

We agree with all four of the proposed goal statements.

Do you agree with the objectives under each goal? If not, which objective(s) would you change and how?

We generally agree with the proposed objectives for each goal.

One of the objectives for Goal 1 (Goal 1 is to increase awareness and access to financial education) is, “the development and dissemination of financial-education resources and programs that effectively deliver relevant information to diverse constituencies.” While we support the objective, we believe the objective may be more effective if it were to explicitly state that the development and dissemination of such financial-education resources should be done with a clear understanding of the demographic of the recipient of these efforts. Understanding who will be the end-users of these resources would allow the developers and distributors to tailor the products and distribution methods accordingly.

In regard to Goal 3 (which is to strengthen the provision of financial education), we offer the following objectives to supplement the Commission’s list: (1) develop a process to enlist parents in modeling sound financial behavior for their children, beginning in early childhood; and (2) review potential financial literacy programs to assess the underlying concepts which are to be taught, the cognitive ability of children to grasp those concepts, and the behavior sought to be improved.

Which objectives are most relevant to your organization?

Objective from Goal 1: “Provide unbiased and understandable financial-education resources at financial decision points, such as during the home-buying process.”

We strongly support this objective and believe the timing of, and circumstances surrounding, provision of information is almost as important as the information itself. The example in the Commission’s proposed objective of the home-buying process as an important financial decision point is one that credit unions can directly relate to and one that we know is accurate.

Objective from Goal 4: “Identify customized programs that address local and other needs, such as those that place emphasis on low- to moderate-income, minority, unbanked, and underserved communities.”

We support this objective. However, as noted above, we believe a similar objective should be included for Goal 1.

What type of organization(s) do you represent?

CUNA represents federal and state chartered credit unions, which are cooperative non-profit financial institutions.


Thank you for the opportunity to express our views on this extremely important topic. If you have any question about our letter, please do not hesitate to give Senior Vice President and Deputy General Counsel Mary Dunn or me a call at (202) 508-6743.

Sincerely,

Luke Martone
Regulatory Counsel