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 Commissions (Commissions) 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 nations nearly 7,700 state and federal credit unions, which serve approximately 93 million members.
Summary of CUNAs Views
- CUNA strongly supports financial education and initiatives to increase financial literacy. As stated in a recent comment letter to the Commission, credit unions have traditionally been very consumer focused and as an industry we welcome the opportunity to do our part in this national effort to increase financial literacy.
- Overall, we are very encouraged by the goals and action areas the Commission has identified in the proposed National Strategy. Specifically, the list of proposed action areas is thorough and consistent with the underlying objectives of the National Strategy.
- We agree with the Commissions proposed vision statement, which describes the National Strategys long-term vision of financial success, financial stability, and financial security for all individuals and families in the U.S.
- In addition, we agree with the proposed mission statement, particularly the provision in regard to individual decision-making.
- We support the Commissions proposed goals and generally support the proposed objectives for each goal. However, we encourage the Commission to consider tailoring resources and programs to the specific demographic for which they are intended.
Discussion of CUNAs Views
We applaud the Commissions 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 Commissions efforts are critical to effectively address the issue.
The Commissions 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 Commissions Questions
Do you agree with the vision statement? If not, what are your suggestions?
The statement describes the National Strategys long-term vision of financial success, financial stability, and financial security for all individuals and families of the U.S.
We agree with the Commissions 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 componentthat is, enabling consumers to independently assess relevant information when making choicesis 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 Commissions 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 Commissions 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.