PROspective Vol II No III April 2011
On almost any subject, the federal government has a wealth of information for use by the public… from the EPA to the CIA.
This is especially true of the Treasury Department, which has thousands of booklets and notices from the IRS, and has considerable financial information and education material for consumers and investors.
Josh Wright is the Acting Director of the Treasury Department’s Office of Financial Education and Financial Access.
He answers questions on what exactly the Treasury and other parts of the federal government are doing to help the public better manage its money.
Chuck Miller: What are some of the major initiatives by the Federal government in th area of financial education?
Josh Wright: There are three primary ways to improve consumer financial outcomes for American families: first, enhancing individuals’ financial literacy and capabilities; second, promoting access that meets consumer needs; and third, establishing strong protections for consumers. Basic financial literacy is the necessary foundation for informed consumer decision-making.
But to be effective, financial literacy must be combined with improved access to suitable financial products and strong consumer protections. The three efforts combine to create financial capability, which is the ability of individuals to make and execute good financial choices for themselves and their families.
Presently, the Treasury’s Office of Financial Education and Financial Access is working with numerous Federal agencies on the implementation plan for the National Strategy to promote financial literacy, Promoting Financial Success in the United States: National Strategy for Financial Literacy 2011. The Strategy creates an overarching strategic framework that public and private organizations committed to personal finance education, research, practice, and policy can use to guide their work.
In addition to the implementation of the National Strategy, the Department of Treasury, in conjunction with the Department of Education, is currently holding the National Financial Capability Challenge, a program that challenges high school students to learn about personal finance concepts. Teachers sign up their students and teach curricula made available by a number of organizations in an online Educator Toolkit. Students then take a voluntary online exam to test their knowledge. The top two scorers at each school, plus all students scoring in the top 20 percent, receive National Financial Capability Challenge Award Certificates. Last year more than 76,000 students across the country took the Challenge. This year’s Challenge ended on April 8.
The role of promoting financial education is being taken on by new government entities as well. The Consumer Financial Protection Bureau, created as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is in the process of establishing an Office of Financial Education. That office will coordinate programs relating to financial literacy and consumer education, providing tools that will help families make financial decisions that are right for them.
The Treasury Department is also working on some upcoming financial education and access activities. We are designing challenges to spur financial education and access innovation. Challenges will be available on Challenge.gov. Follow Challenge.gov on Twitter to stay informed.
CM: What’s FLEC and what does it do?
JW: The Financial Literacy and Education Commission was created per Title V of the Financial Literacy and Education Improvement Act. It represents 22 agencies, bureaus, and entities of the Federal government and is tasked with improving the financial literacy and education of persons in the United States. It is chaired by the Treasury Secretary and is made up of the heads of member agencies.* The Commission is coordinated by the Treasury Department’s Office of Financial Education and Financial Access.
The Commission encourages government and private sector financial literacy efforts. As part of this effort, the Commission wrote a National Strategy to promote financial education, established MyMoney.gov, a website full of resources offering guidance on planning for financial life events, and has hosted a number of meetings open to the public to discuss evidence-based, financial education approaches.
CM: What’s on MyMoney.gov?
JW: The Commission launched a national financial education website, MyMoney.gov. in October 2004 which streamlines access to Federal financial education resources. These resources provide the public access to personal finance information from Federal sources in a centralized location.
MyMoney.gov provides numerous resources and tools such as Taking Control of Your Finances: A Special Guide for Young Adults, made available by the FDIC, Taking the Mystery Out of Retirement Planning, provided by the Department of Labor, and Financing Your Business, provided by the Small Business Administration.
Shortly after President Obama proclaimed April 2010 to be National Financial Literacy Month, the Commission announced the launch of the redesigned MyMoney.gov which included enhanced interactive features and utility.
CM: Why have I not heard of MyMoney.gov before now? There seems to be a wealth of information on the site.
JW: The redesigned MyMoney.gov is greatly improved and we are continuing to build awareness about its great content. In addition, we are always trying to think of ways to improve the site and provide valuable information that will assist users in making informed financial decisions. In the upcoming year we plan to add additional features to the site such as a tool for users to self assess their financial literacy knowledge and skills. We also plan to improve navigation of the site and incorporate research that would be helpful to community practitioners and policy makers. There are a number of promotional materials, such as MyMoney.gov bookmarks, available upon request. We encourage readers to visit the site and share it with others.
CM: What new initiatives are under discussion?
JW: The Financial Literacy and Education Commission has a number of proposed activities for 2011. Some of those activities include:
1. The implementation of the National Strategy, Promoting Financial Success in the United States: National Strategy for Financial Literacy 2011 which aims to: increase awareness of and access to effective financial education; determine and integrate core financial competencies; improve financial education infrastructure; and identify, enhance, and share effective practices.
2. The implementation of core competencies created by the Financial Literacy and Education Commission Core Competencies Working Group to address the lack of common understanding and goals within the financial education field. The Department of Treasury, in conjunction with the Commission’s Core Competencies Working Group, identified five core concept areas: (a) earning, (b) spending, (c) saving and investing, (d) borrowing, and (e) protecting against risk. Knowledge and action items for each concept were developed so that core competencies could be put into a format and language that are easily accessible and easily remembered.
3. The Financial Literacy and Education Commission’s Research and Evaluation Working Group is working to establish a research clearinghouse next year. The clearinghouse will be helpful to researchers, practitioners, and program providers. The purpose is also to encourage collaboration among agencies and other experts.
*The Office of the Comptroller of the Currency; the Office of Thrift Supervision; the Federal Reserve; the Federal Deposit Insurance Corporation; the National Credit Union Administration; the Securities and Exchange Commission; the Departments of Education, Agriculture, Defense, Health and Human Services, Housing and Urban Development, Labor, and Veterans Affairs; the Federal Trade Commission; the General Services Administration; the Small Business Administration; the Social Security Administration; the Commodity Futures Trading Commission; the Office of Personnel Management, the White House Office of Public Engagement and its newest member, the Consumer Financial Protection Bureau.