A Look Ahead
By Jan A. Miller
As I begin my tenure as your new chairman, I can’t help but remember my first experience with a state banking association in the summer of 1971. It was a one-day conference sponsored by the Vermont Bankers Association at the Killington Ski Resort, which was much smaller than it is today. Little did I know that some 34 years later I would be in this position. As I said at the Massachusetts Bankers Association’s Annual Meeting, I am honored to be your chairman and look forward to the coming year.
Among the many priorities of the MBA, I would like to dedicate the year ahead to the idea that we as an industry can and should do more to not only promote but actively engage in financial literacy.
Federal Reserve Chairman Alan Greenspan last year, in an address to an audience of soon-to-be high school graduates in Chicago, said, “because the complexity of our economic system continues to increase, the skill level that you reach in your twenties will surely be inadequate for the needs of our economy when you reach 40. So education must be ongoing.”
There is little doubt that our industry faces a most daunting challenge. In a rapidly expanding world of complex financial management products and tools, how do we guide our customers – young, mature and everyone in between – as well our workforce, into the century ahead?
We recently reviewed the applications for scholarships awarded by the MBA Scholarship Foundation to the deserving college-bound sons and daughters of member bank employees. The essay question was, “What can your bank do to improve financial literacy?” My fellow trustees and I were impressed with the range of outreach ideas contained in the essays. The honesty expressed of their own lack of financial knowledge was also a concern. We did get a chuckle from the sage advice of one budding academic who said: “The first thing to do is educate the bank employees.” Ouch!
We all know by now the rationale for educating customers: a better-educated customer is a more focused consumer – in addition to a valuable contributor to our society. Difficult as it may be, we will all be better off by starting the financial literacy process with our own employees. They, in turn, will be better able to reach out to customers – and potential customers.
In my own institution, I have seen the benefit of financial education firsthand. We have a program called “Financial Empowerment.” It is a financial literacy program that has been delivered to junior high schools as well as senior citizen centers. The need is at all levels. I participated in one program for junior-high age kids who attended the half-day program as an elective. They could have gone to the aquarium, Science Museum, etc., but instead chose to come to the bank. I was impressed by their enthusiasm, their thirst for knowledge about checking and savings accounts, investing, credit cards and even car loans! Of course the first question they asked me was, “How much do you make?”
No Formal Education
It may come as a surprise to some that there is no formal financial education curriculum mandated by our state and most others. Thus, many high school graduates leave school with woefully inadequate financial tools for the real world – be they moving on to jobs or college. We’re talking about what should be basic financial education: how to manage a checkbook, what revolving debt is, budgeting and more.
Your MBA has always been a strong advocate of expanding financial literacy in Massachusetts. Recently, the Association began a partnership with the Massachusetts Office of Consumer Affairs to support the High School Financial Literacy Initiative. This program has been tested nationwide and is designed to be taught voluntarily through the high school classroom and other community-based organizations. You and your employees have an opportunity to get involved and I would encourage your bank to do so.
The MBA and the Massachusetts Office of Consumer Affairs this past spring organized a half-dozen successful training sessions throughout the state and quite a few bankers participated who will now be moving into our high schools to teach our students about managing their finances. If you would like to send more bank employees for training, the MBA will be conducting another training session in the fall. Contact Kevin Kiley at the Association for more information at (617) 523-7595.
In addition to financial literacy, in the year ahead we will be focused on opposing large credit union growth and supporting CRA for credit unions; protecting the state bank charter; lobbying for joint Federal Deposit Insurance Corp. and state exams to relieve some of the regulatory burden; protecting the mutual bank charter; and engaging in an important ongoing consumer awareness campaign to combat fraud and ID theft.
As I said at the beginning, I’m honored to be your chairman and follow in the footsteps of the others before me. Our industry is undergoing great changes, the challenges are many but also the opportunities are great. I look for your input. If there is an issue you would like us to address, just give me a call at (617) 478-4000 or send an e-mail.
Jan A. Miller is president of Wainwright Bank in Boston. He can be reached at firstname.lastname@example.org