Washington, D.C. - U.S. Senator Daniel K. Akaka (D-Hawaii) sponsored a resolution designating April as Financial Literacy Month. It was passed by the Senate yesterday by voice vote, without objection. Senators Enzi, Dodd, Stabenow, Levin, Schumer, Inouye, Menendez, Crapo, Johnson, Cardin, Lincoln, Cochran, Martinez, Murray, Allard, Durbin, Baucus, and Feinstein were original cosponsors.
Akaka's Senate floor statement introducing the resolution appears below:
Without a sufficient understanding of economics and personal finance, individuals will not be able to appropriately manage their finances, evaluate credit opportunities, and successfully invest for long-term financial goals in an increasingly complex marketplace. It is essential that we work toward improving education and consumer protection, and empowering individuals through economic and financial literacy in order to build stronger families, businesses, and communities. Now, more than ever, it is imperative that education in economics, credit, and personal finance takes center stage. During the past year, we have seen the unscrupulous nature of predatory lenders as they enticed millions of families into complicated loans they could not afford nor understand, and we are now witnessing the results of a faltering housing market that has begun to impact other sectors of the US economy. Rapidly increasing access to credit for Americans was not matched by efforts to ensure they could make sense of the complex agreements they were entering into.
As recent statistics released by the Federal Reserve and the Department of Commerce have shown, consumer debt in America continues to rise. Last year, the total amount of consumer debt topped two and a half trillion dollars, of which credit card balances comprise a major portion. Hard-working Americans now spend a record 14 percent of their income just to pay the interest on their accumulated consumer debt. Personal savings rates have been negative for two out of the last three years, a situation not seen in this country since the Great Depression. In a time of rising costs of energy, higher education, and health care, it is even more challenging for working families to navigate their difficult financial situations.
Furthermore, a study conducted last year by the National Council on Economic Education found that, compared with 2004, even fewer states now require testing knowledge of economics as a requirement for high school graduation. We need to do more to invest in financial literacy now for our young men and women in order to ensure a knowledgeable, prosperous generation of future American leaders who will be able to make decisions that will benefit both their families and our nation.
I would like to thank those organizations and individuals who do their part to ensure the education of personal finance reaches as many Americans as possible, and I applaud their efforts in these times of economic distress.
Taking the month of April to focus our attention on financial literacy will allow us to make steady progress in helping to make Americans more competent with their limited financial resources. I urge my colleagues to join with me in the swift passage of this resolution, and together we can work toward a future where all Americans enjoy the benefits of a financially literate society.
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