Washington, D.C. - The Senate adopted a resolution (S. Res. 316) introduced by U.S. Senator Daniel K. Akaka (D-Hawaii) to designate April 2004 as Financial Literacy Month. Concerned by studies indicating that the vast majority of American youth lack the basic knowledge and skills to make intelligent, informed decisions about their finances, and economic indicators reflecting widespread financial illiteracy among adults, Senator Akaka led a bipartisan effort requesting that the President promote financial literacy by issuing a proclamation calling on schools, nonprofit organizations, businesses, government entities on the federal, state, and local levels, and citizens to observe the month with appropriate programs and activities. The bipartisan resolution highlights the problems resulting from pervasive financial illiteracy among Americans of all ages across the country.
The United States continues to experience high levels of household debt, bankruptcy filings, and home foreclosures. Consumer debt rose at a greater rate than was forecast 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, 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. "We cannot overlook our adult population and their need for financial literacy and education," Akaka noted. "We are witnessing the cumulative results of poor financial decision making by consumers and the need for economic and financial literacy education at all ages."
The resolution emphasizes that economic and financial literacy education in our schools is a worthwhile investment for our country to make for future generations. Senator Akaka and a bipartisan coalition of senators are working to provide more resources through the Excellence in Economic Education Act for K-12 education and strengthen our investment for students in colleges and universities.
"As we educate our nation's young people to make wise financial choices, we must also 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 loans, and abusive financial marketing practices," Akaka said.
