May 16, 2006
JS-4262
Remarks of Anna Escobedo Cabral, U.S. Treasurer
U.S. Department of the Treasury
Before the Financial Literacy and Education Commission
Washington, DC- Thanks very much Emil for that wonderful introduction. And thank you to you and your staff in Treasury's Office of Financial Education for doing an absolutely phenomenal job of putting this meeting together – the 8th public meeting of the Financial Literacy and Education Commission.
I also want to tell you how honored I feel to join you and the distinguished members of this Commission today. I am very happy to join not only our very own fantastic Emil Henry, but also of course by our very talented and passionate colleagues – NCUA Chairwoman JoAnn Johnson and OCC Comptroller John Dugan.
Welcome to Treasury. All of us in this room today share a common mission – that of improving financial literacy levels for all people across the country.
Before we continue with our morning's work I want to take just a brief moment to share with you a little bit about the room in which we sit today.
We find ourselves in a very beautiful and historic room – the Cash Room. As some of you may be aware, the Cash Room officially opened in June of 1869 for the purpose of conducting transactions of the government's financial business. In essence it functioned as a "banker's bank" – the need for a bank in the Treasury Building arising indirectly from a reform of the country's monetary system in 1846 and from subsequent developments during the Civil War era. It supplied area commercial banks with coins and currency from our vaults, but it is important to note that services were also offered to the public. Those services included cashing of government checks, exchanging new money for old, redeeming silver certificates and gold certificates, as well as selling U.S. Treasury bonds.
Today we together continue to build on this room's rich history. Although we no longer exchange currency in this room, in essence we exchange something much more valuable – ideas – some ideas that are new, and some that have already been put into practice and have been already rendering positive results.
Hopefully, all of us will take away some new piece of important information, which may prove instructive and help in our own respective organization's work of making it easier for more Americans to obtain the necessary skills to manage their money wisely.
It is really important that the members of this Commission and all of those who champion financial literacy be recognized for your efforts – your continued work in this area is absolutely critical to helping individuals improve their lives.
I can tell you this from my own personal experience.
I want to share with you a little bit about where I came from, and why the work you are doing today, in so many ways, is so important. I am Mexican American from a fourth generation, farm-worker family. What that means is that my family has for generations worked in the fields – my parents have worked in the fields and for a very little while, we children worked in the fields as well.
We grew up very poor for the most part, and most of the time we had to scrape by because we had very little money.
Today, in great part because of the many doors education has opened up for me, I find myself at quite the opposite end of the financial spectrum.
However, through my outreach and conversations with people across the country, I continue to find that the feeling of barely getting by is common and a feeling shared by many – no matter what income level people operate in. In fact, although our economy continues to grow and there are more jobs available for more Americans since the 1950s, somehow we continue to fall short in the area of personal finance knowledge and good personal finance habits.
This is likely due in part to a lack of education. However, part of it is probably also attributable to the fact that a complex burgeoning economy like ours also creates more choices and sophisticated vehicles for saving and making one's money grow.
So really, when we talk about financial education in today's terms, what we're really talking about is improving people's quality of life. But achieving our common goals will require us to go beyond creating additional nicely manicured brochures.
Education means not just presenting information in a nice neat package – it also means delivering it through the right channels by people who are trusted in their respective communities.
This sort of education in which we're all engaged is really about helping to create new opportunities for people – opportunities like paying for a child's college education, purchasing a home, starting a business and planning for a secure retirement.
Currency Security and Financial Education
You know, as 42nd Treasurer of the United States I take great pride in carrying out some important responsibilities that come with this office.
I spend a significant amount of time working on matters related to improving currency security – working with the Federal Reserve and Secret Service – to ensure that our government stays ahead of efforts from would-be counterfeiters. I advise the Secretary of the Treasury on these matters and work with the Bureau of Engraving and Printing to educate the public about currency security features, particularly the newly designed notes. Many of you are already familiar with the new designs on the $50 and the $20, but I also hope you all have become familiar with the new $10 which features our very own and first Secretary of the Treasury, Alexander Hamilton. We'll continue to make changes every 7 to 10 years and continue to educate the public so we may protect the strength of our American currency.
Additionally, many of you are already aware that Emil's department and my office spend a lot of time coordinating efforts on improving people's level of financial literacy.
Improving financial education levels for all Americans is indeed a high priority for all of us.
I think we can all agree that it is the right thing to do – as I mentioned earlier – it's helping to create an environment where individuals can reach their full potential on a variety of levels.
But we also acknowledge the bottom line – that it is necessary to do so for the good and safety of individuals, as well as the overall health of businesses and our growing economy.
Take for instance how individuals without bank accounts were impacted in the Gulf Coast states after the series of hurricanes that slammed into that region. Unfortunately, we witnessed what can happen to those with very little access to financial education or financial services options mostly offered by traditional financial institutions.
After last year's Gulf Coast Hurricanes many people without bank accounts in these hard hit areas found it much more difficult to access benefits they were expecting to receive in the mail, mostly because they were displaced and difficult to track or reach.
Many of these people are what this financial education community commonly referrs to as the "unbanked." Current reports estimate there are about 10 million individuals without access to basic banking services – other reports state that figure as upwards of 20 million plus. This issue of "banking the unbanked" or improving access to services for traditionally underserved individuals will be a top priority for my office, particularly in the months and years ahead.
As Secretary Snow's adviser and a spokesperson working on matters related not only to improving currency security education, but also financial education in the U.S., I am the first to acknowledge that the federal government can not undertake this significant task on its own.
One area where Treasury has been very successful in working with such partners is the GoDirect campaign, of which I have been honored to be a part.
About a year and half ago, the Treasury and Federal Reserve Banks launched Go Direct, in Spanish known as Directo A Su Cuenta. Its focus is to motivate seniors to receive their Social Security benefits by direct deposit.
It not only communicates the importance of direct deposit – it also provides the means by which seniors can make the switch from a paper check to direct deposit. We have a dedicated call center staffed by bilingual personnel ready to assist all beneficiaries – and since July 2005, almost 400,000 beneficiaries have signed up for direct deposit through the call center alone.
The call center is only one of many ways we are helping beneficiaries sign up for direct deposit. Our Web sites: www.GoDirect.org and www.DirectoASuCuenta.org, allows beneficiaries to access a step-by-step online tool to sign up – either on their own or through their bank or credit union.
Direct deposit is not only the most convenient way for all seniors to have immediate access to Social Security benefits, it is also the most secure way for receiving them. Unfortunately, despite 95 percent of Americans having heard or read about identity theft, a Treasury and Federal Reserve Bank survey revealed that many are unaware of the security benefits of direct deposit over paper checks.
That is why I urge you to help us spread the word about this great free service. Keep in mind that direct deposit can also provide seniors receiving SSA payments with a sense of control of their money. This is true even under the most difficult circumstances. Again, as you know Hurricane Katrina displaced tens of thousands of federal beneficiaries just days before their checks arrived in the mail. In uncertain times like these, enrolling in direct deposit can offer a much needed peace of mind to federal benefit recipients.
We need significant help of partners, from the private and non-profit sectors, who are trusted and have a longstanding presence in those communities we aim to reach and serve. At the end of the day, our community partners are our best spokespeople and our best teachers.
That is I continue to look forward to working together with those community-base organizations that help make this task less insurmountable. And I look forward to continuing to work with our team here at Treasury and Commission partners.
Suffice it to say you've already accomplished a lot in very short period of time.
Acknowledgement of the Commission's Work
I want to really commend you for the tremendous progress you've made in this area in the last couple of years. It wasn't easy. It required your great generosity of time, your talents and expertise in a variety of financial and consumer education areas that your agency deals with on a day-to-day basis. But you should be very satisfied and encouraged by the results of your efforts because they are truly impressive.
It is really rather astounding that in just a few years 20 federal departments and agencies have been able to work together to launch a toll-free hotline, 1-888-MyMoney, and to develop a coordinated federal web site on financial education, MyMoney.gov.
Additionally, you've launched a very extensive report in this area. I had the privilege in April this year to join Secretary Snow and other members of the Commission in helping launch the first-ever national federal strategy for financial education – Taking Ownership of the Future; The National Strategy for Financial Literacy. I am proud to say that my office will be lending support in carrying out many of the calls to action delineated in the strategy.
Allow me to just briefly share with those of you joining us today who may not yet be familiar with this document a brief overview of the content of the strategy.
The strategy looks at a variety of important topics, such as homeownership, credit management, retirement savings, in addition to "banking the unbanked" – an issue that as I mentioned earlier, my office is particularly focused on. This month, I also had the opportunity to participate in executing one of the first calls to action at the Midwest Regional Conference on "Banking the Unbanked" in Chicago, Illinois along with Chairwoman Johnson and Treasury's Dan Iannicola.
The strategy also describes some challenges and provides a blueprint, or serves as guidepost if you will, for possible solutions.
Sometimes the solutions come from the Federal government, but again, often nonprofit organizations, businesses and other private sector players provide important resources for those wishing to learn more about financial matters.
It also puts forward examples of financial education programs that community leaders, business people, and volunteers can all look to as they design programs of their own to enhance financial literacy.
And at the end of each chapter in the strategy, you will notice that Calls to Actions are highlighted. It is our hope that these Calls to Actions will provide a springboard for further open and inclusive discussion on a whole myriad of issues.
Please tell your colleagues about this new resource, which can be found on the MyMoney.gov web site.
Closing
In closing, I do want to reiterate my thanks once again for your efforts and I want to congratulate you for what you've already accomplished.
But now it's time to move forward and explore what our next steps might be. In order to do that, we'll need to continue to maintain the lines of communication open and to share methodologies and proven approaches.
I encourage those of you with new insights to share on this topic to get a hold of Treasury's financial education team, which as many of you know is overseen by Dan Iannicola, Deputy Assistant Secretary for financial education. I also want to recognize the individuals that are really the engine behind all our efforts here at Treasury: our Director of Outreach for Financial Education Luz Figueroa, our Director of the Office of Financial Education Dubis Correal, CAIP Director Louisa Quittman, Special Assistant Tom Kurek, and Jennifer Millikin who is temporarily with us from GSA and lending her expertise and support.
On behalf of Secretary Snow and his Treasury team – thank you again for your time and attention, and welcome to the department of the Treasury.