Banks Are Doing Their Part
When it comes to getting out the financial literacy message, the nation’s banks are doing their part.
In three consecutive surveys, from 2001 through 2003, the Consumer Bankers Association (CBA) has found steadily increasing growth in the number of financial education programs sponsored by the banking industry. In the latest survey, 98 percent of the institutions surveyed indicated that they sponsor financial literacy programs or else support such efforts through partnerships.
The "Survey of Bank-Sponsored Financial Literacy Programs," issued in the spring of 2003, covers mortgage and home ownership, public school and college courses, small business development programs, credit counseling, and predatory lending.
For the first time, this year’s survey also included a measurement of state bank association activity in the financial literacy arena, as well as bank programs aimed at the so-called "unbanked" population, and provision for Individual Development Accounts (IDAs).
"Over the past year," the report states, "the issue of financial illiteracy in America has continued to draw national attention from lawmakers, educators, consumer advocates, and the financial services industry."
Among those expressing concern is Federal Reserve Chairman Alan Greenspan who, in an address before the annual meeting last April of the Jump$tart Coalition for Personal Financial Literacy, declared, "Regulators, consumer advocates, and policymakers all agree that consumer education is essential in the quest to stem the occurrence of abusive, and at times, illegal lending practices."
(Jump$tart, together with the Federal Deposit Insurance Corp. (FDIC), is one of the nation’s leading promoters of financial literacy, and both organizations have joined numerous banks in educational partnerships with elementary and high schools across the nation.)
Between January and March 2003, 55 banks -- among them 14 of the nation’s biggest -- and 15 state banking associations responded to the CBA survey. Among the banking heavyweight respondents were Bank of America, Citibank, FleetBoston, and Wachovia.
However, the CBA points out, "Although many of the nation’s largest banks make up the bulk of respondents in terms of asset size, smaller institutions (less than $20 billion) make up the majority of respondents in terms of number of banks included in the study – 57 percent of the respondents."
Financial literacy programs offered by banks to K-12 schools showed a strong upsurge in the latest survey, with nearly 80 percent of the banks surveyed reporting school programs, with nearly 60 percent of these partnering with organizations like Jump$tart.
"In addition, 70 percent of banks noted that they supported youth financial education through the national "Adopt-a-School program, and 83 percent engage in programs where bank employees tutor students," the report states. Some 26 percent of survey respondents said they also offer financial education courses on college campuses.
Focus on the Unbanked
The "unbanked" population of America is also attracting increased attention. Some 40 of the institutions surveyed offer IDAs, while 27 institutions offer personal finance programs aimed specifically at unbanked consumers.
According to the report, "In addressing the needs of a major segment of the unbanked population, immigrants and non-English speaking consumers, 70 percent of banks stated that their institution provides financial education programs, basic banking literature, or educational brochures in a foreign language, primarily Spanish."
Here are some of the more innovative programs currently being offered by some of the survey’s respondent banks:
• FleetBoston’s Community Investment Group offers assistance to non-profit and community organizations to enable them to better manage their IDA accounts. Through the IDA program, participants learn the basics of managing money and savings.
• Branch Banking and Trust of Winston-Salem, N.C., in partnership with a Latino advocacy group, developed a series of 60-minute Spanish language audiotapes which beside offering basic banking tips also offers counsel on becoming accustomed to life in the United States.
• In Chicago, a group of banks have joined forces to offer a program targeted at consumers, chiefly minorities, who don’t do business with banks. Using a curriculum based on the FDIC’s MoneySmart financial literacy program, the Chicago bankers offer a free 10-week course to adult students. Called "Our Money Matters: The ABCs of Personal Finance" the program is now offered at all seven of the City College campuses.
• MBNA America, the nation’s top independent credit card issuer, developed a program aimed at college students. Labeled the Student Financial Education Service (SFES), the nationwide effort is designed to furnish both college students and their parents with a wide range of financial information, including credit card management, understanding credit reports, investment options, and budgeting.
The CBA report also cites the continuing efforts to include personal financial literacy courses in high school curriculums, noting "Despite varying opinions on how and where students should learn about personal finance, the push to have financial education integrated in public schools continues to gain momentum."
While gaining momentum, however, advocates for school curriculum-based financial literacy courses still face daunting hurdles. Fittingly, as CBA points out in its report, they’re money related:
"While proponents of financial literacy lobby for changes in school standards to require the integration of financial education in primary and secondary schools, superintendents of cash-strapped school systems reiterate the need for more funding, and educators wrestle with the proposition of finding adequate time and resources to teach additional subject matter."