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THE FEDERAL GOVERNMENT’S ROLE IN 

EMPOWERING AMERICANS TO MAKE INFORMED 

FINANCIAL DECISIONS 

HEARING 

BEFORE THE

OVERSIGHT OF GOVERNMENT MANAGEMENT, 

THE FEDERAL WORKFORCE, AND THE 

DISTRICT OF COLUMBIA SUBCOMMITTEE 

OF THE

COMMITTEE ON 

HOMELAND SECURITY AND 

GOVERNMENTAL AFFAIRS 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

FIRST SESSION 

APRIL 29, 2009 

Available via http://www.gpoaccess.gov/congress/index.html 

Printed for the use of the Committee on Homeland Security 

and Governmental Affairs 

( 

(II) 

COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS 

JOSEPH I. LIEBERMAN, Connecticut, Chairman 

CARL LEVIN, Michigan 

DANIEL K. AKAKA, Hawaii 

THOMAS R. CARPER, Delaware 

MARK L. PRYOR, Arkansas 

MARY L. LANDRIEU, Louisiana 

CLAIRE MCCASKILL, Missouri 

JON TESTER, Montana 

ROLAND W. BURRIS, Illinois 

MICHAEL F. BENNET, Colorado 

SUSAN M. COLLINS, Maine 

TOM COBURN, Oklahoma 

JOHN MCCAIN, Arizona 

GEORGE V. VOINOVICH, Ohio 

JOHN ENSIGN, Nevada 

LINDSEY GRAHAM, South Carolina 

MICHAEL L. ALEXANDER, Staff Director 

BRANDON L. MILHORN, Minority Staff Director and Chief Counsel 

TRINA DRIESSNACK TYRER, Chief Clerk 

OVERSIGHT OF GOVERNMENT MANAGEMENT, THE FEDERAL 

WORKFORCE, AND THE DISTRICT OF COLUMBIA SUBCOMMITTEE 

DANIEL K. AKAKA, Hawaii, Chairman 

CARL LEVIN, Michigan 

MARY L. LANDRIEU, Louisiana 

ROLAND W. BURRIS, Illinois 

MICHAEL F. BENNET, Colorado 

GEORGE V. VOINOVICH, Ohio 

LINDSEY GRAHAM, South Carolina 

LISA M. POWELL, Chief Counsel and Acting Staff Director 

MATTHEW J. PIPPIN, Deputy Legislative Director 

JESSICA K. NAGASAKO, Professional Staff Member 

JENNIFER A. HEMINGWAY, Minority Staff Director 

BENJAMIN B. RHODESIDE, Chief Clerk 

(III) 

C O N T E N T S 

Opening statements: Page 

Senator Akaka .................................................................................................. 1 

Senator Burris .................................................................................................. 13 

WITNESSES 

WEDNESDAY, APRIL 29, 2009 

Hon. John Berry, Director, U.S. Office of Personnel Management, accompanied by Raymond J. Kirk, Manager, Benefits Officers Training and Development Group, U.S. Office of Personnel Management ................................. 4 

James H. Shelton, III, Assistant Deputy Secretary for Innovation and Improvement, U.S. Department of Education ........................................................ 5 

Arthur J. Myers, Principal Director and Acting Under Secretary of Defense 

for Military Community and Family Policy, U.S. Department of Defense ...... 8 

Sandra F. Braunstein, Director, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System ................................ 10 

Richard J. Hillman, Managing Director, Financial Markets and Community 

Investment, U.S. Government Accountability Office ........................................ 11 

Robert F. Duvall, President and CEO, Council for Economic Education ............ 26 

Dallas L. Salisbury, President and CEO, Employee Benefit Research Institute, and Chairman, American Savings Education Council ............................. 28 

ALPHABETICAL LIST OF WITNESSES

Berry, Hon. John: 

Testimony .......................................................................................................... 4 

Prepared statement .......................................................................................... 33 

Braunstein, Sandra F.: 

Testimony .......................................................................................................... 10 

Prepared statement with an attachment ....................................................... 54 

Duvall, Robert F.: ....................................................................................................

Testimony .......................................................................................................... 26 

Prepared statement .......................................................................................... 97 

Hillman, Richard J.; 

Testimony .......................................................................................................... 11 

Prepared statement .......................................................................................... 79 

Myers, Arthur J.: 

Testimony .......................................................................................................... 8 

Prepared statement .......................................................................................... 47 

Salisbury, Dallas L.: 

Testimony .......................................................................................................... 28 

Prepared statement with attachments ........................................................... 102 

Shelton, James H. III: 

Testimony .......................................................................................................... 5 

Prepared statement .......................................................................................... 41 

APPENDIX 

Background .............................................................................................................. 147 

North American Securities Administrators Association, prepared statement .... 154 

Question and Response for the Record from: 

Ms. Braunstein ................................................................................................. 160 

(1) 

THE FEDERAL GOVERNMENT’S ROLE IN 

EMPOWERING AMERICANS TO MAKE 

INFORMED FINANCIAL DECISIONS 

WEDNESDAY, APRIL 29, 2009 

U.S. SENATE,

SUBCOMMITTEE ON OVERSIGHT OF GOVERNMENT

MANAGEMENT, THE FEDERAL WORKFORCE,

AND THE DISTRICT OF COLUMBIA,

OF THE COMMITTEE ON HOMELAND SECURITY

AND GOVERNMENTAL AFFAIRS,

Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:31 p.m., in room 

SD–342, Dirksen Senate Office Building, Hon. Daniel K. Akaka, 

Chairman of the Subcommittee, presiding. 

Present: Senators Akaka and Burris. 

OPENING STATEMENT OF SENATOR AKAKA 

Senator AKAKA. I call this hearing of the Subcommittee on Oversight of Government Management, the Federal Workforce, and the 

District of Columbia to order. Aloha and welcome to our witnesses, 

and thank you so much for being here today. 

Financial literacy is an issue that must be addressed as we continue to grapple with severe economic challenges and global recession. The negative impacts of financial illiteracy are less obvious 

when the economy is booming, employment is plentiful, and wages 

rise. It is when recessions come, people lose jobs, and wages fall 

where the true costs of financial illiteracy among working families 

become apparent. 

My interest in financial literacy dates back to when I was in the 

fourth grade. My teacher at that time insisted that each child in 

the class bring a piggy bank to class. We were made to understand 

how money saved a little at a time can grow into a large amount 

and enough to buy things that would have been impossible to obtain without savings. And she used that to teach us English and 

arithmetic because she had us write a paper on how much money 

we had and what our intentions were if we had enough money to 

buy something. And so she used that piggy bank in that way, and 

my experience with the piggy bank taught me important lessons 

about money management that have stayed with me and helped 

me throughout my life. 

More people need to be taught these important lessons so that 

they are better able to manage their resources. Too many Americans lack basic financial literacy. Americans of all ages and backVerDate Nov 24 2008 13:43 Feb 25, 2010 Jkt 051021 PO 00000 Frm 00005 Fmt 6633 Sfmt 6633 P:\DOCS\51021.TXT SAFFAIRS PsN: PAT
2 

grounds face increasingly complex financial decisions as members 

of the Nation’s workforce and managers of their family’s resources. 

Without a sufficient understanding of economics and personal finance, individuals cannot appropriately manage their finances, effectively evaluate credit opportunities, successfully invest for longterm financial goals, or cope with financial situations. 

One of the root causes of the current economic crisis was that 

people were steered into mortgage products with costs or risks that 

they could not afford. It is essential that we work toward improving education, consumer protections, and empowering individuals 

and families through economic and financial literacy in order to 

build stronger families, businesses, and communities. 

My legislation, the Excellence in Economic Education Act (EEE 

Act), was enacted as part of the No Child Left Behind Act. The 

EEE Act promotes economic and financial literacy among elementary and high school students. It is intended to fund a range of activities such as teacher training, research and evaluation, and 

school-based activities to further the understanding of economic 

principles. I have obtained funding of approximately $1.5 million 

for the EEE Act in each fiscal year since fiscal year 2004, and I 

will continue to work to fund this important program. 

Additionally, in 2003 I, along with several of my colleagues, created the Financial Literacy and Education Commission with the intention to improve the financial literacy knowledge of all Americans. Unfortunately, the previous Administration did not develop 

an effective national strategy on financial literacy. We must revise 

the strategy, establish goals and objectives, and aggressively work 

to meet those goals. 

In 2004, I worked to include in the Thrift Savings Plan Open 

Elections Act a mandate that the Office of Personnel Management 

(OPM) develop and implement a retirement financial literacy and 

education strategy for Federal employees. I have appreciated the 

efforts of OPM, and I look forward to the establishment of goals 

and benchmarks so that we can continue to better prepare our Federal workforce to retire on their own terms. 

However, education is only one component of financial literacy. 

We must ensure that consumers are adequately protected. Too 

many Americans are taken advantage of by unscrupulous lenders 

through refund anticipation loans, payday loans, and other predatory products. Additionally, members of our armed forces are often 

pressured into making inappropriate investment choices. We must 

restrict practices which are predatory and ensure that our regulators better represent the interests of consumers. 

The third vital component of financial literacy is economic empowerment. Millions of working families do not have a bank or 

credit union account. The unbanked rely on alternative financial 

service providers to obtain cash from checks, pay bills, and send remittances. Many of the unbanked are low- and moderate-income 

families that can ill afford to have their earnings diminished by relying on these high-cost financial services. 

In addition, the unbanked are unable to save securely to prepare 

for the loss of a job, a family illness, a downpayment on a first 

home, or education expenses. Providing access to a bank or credit 

3 

union account can empower families with increased financial opportunities. We must do more to bank the unbanked. 

Today’s hearing provides an opportunity to examine Federal financial literacy efforts and the Financial Literacy and Education 

Commission. We must continue to work together to encourage better economic and financial literacy, which in turn will result in 

stronger families and better functioning markets. 

I appreciate the appearance of the witnesses today and look forward to working with them and other members of the Administration on this issue of vital importance to working families. I welcome the following witnesses today to the Subcommittee: 

Hon. John Berry, Director of the Office of Personnel Management, who is accompanied by Raymond Kirk, the Manager of the 

Benefits Officers Training and Development Group at the Office of 

Personnel Management; 

James Shelton, Assistant Deputy Secretary of the Office of Innovation and Improvement of the Department of Education; 

Arthur Myers, Principal Director and Acting Under Secretary of 

Defense for Military Community and Family Policy at the Department of Defense; 

Sandra Braunstein, Director of the Division of Consumer and 

Community Affairs from the Board of Governors of the Federal Reserve System; 

And Richard Hillman, Managing Director of Financial Markets 

and Community investment from the Government Accountability 

Office. 

It is the custom of this Subcommittee to swear in all witnesses, 

and I would ask all of you to please stand and raise your right 

hand. Do you solemnly swear that the testimony you are about to 

give this Subcommittee is the truth, the whole truth, and nothing 

but the truth, so help you, God? 

Mr. BERRY. I do. 

Mr. KIRK. I do. 

Mr. SHELTON. I do. 

Mr. MYERS. I do. 

Ms. BRAUNSTEIN. I do. 

Mr. HILLMAN. I do. 

Senator AKAKA. Thank you. Let it be noted for the record that 

the witnesses answered in the affirmative. 

Before we start, I want you to know that your full written statements will be part of the record. I would also like to remind you 

to keep your remarks brief, given the number of people testifying 

this afternoon. 

Again, welcome, and I would like to call on Director Berry to 

please proceed with your statement. 

4 

1The prepared statement of Mr. Berry appears in the Appendix on page 33. 

TESTIMONY OF HON. JOHN BERRY,1 DIRECTOR, U.S. OFFICE 

OF PERSONNEL MANAGEMENT, ACCOMPANIED BY RAYMOND J. KIRK, MANAGER, BENEFITS OFFICERS TRAINING 

AND DEVELOPMENT GROUP, U.S. OFFICE OF PERSONNEL 

MANAGEMENT 

Mr. BERRY. Mr. Chairman, thank you very much for this incredible opportunity to be with you today and, most importantly, thank 

you for your leadership on this very important issue. For many 

years, you have been a voice in the wilderness on the topic of the 

importance of financial literacy, and thank goodness that you have 

because you have really advanced a wonderful cause that will benefit all Americans. 

It is my pleasure to be here today with Ray Kirk, who is our 

leader on this effort, to give you a little bit of an update on what 

is underway at the Office of Personnel Management. 

OPM is committed to educating Federal employees about the 

need for retirement savings and investments and providing good 

information on how to plan for their retirement years. We are now 

doing that through a strategy and an educational model that we 

call Retirement Readiness NOW. 

Retirement Readiness NOW combines basic information about 

the benefits provided by the government, as an employer, and the 

broader financial education needs of our employees. Rather than 

being a ‘‘near-retirement’’ event, the Retirement Readiness NOW 

model considers retirement financial literacy and education as a career-long process. 

We have three key roles in Retirement Readiness NOW: Capacity, coordinating, and catalyst. Building capacity means providing 

training and tools to agency benefit officers so they can help their 

employees understand their benefits and identify their financial 

education needs. 

For example, one of the tools we recently developed in partnership with the American Savings Education Council of the Employee 

Benefits Research Institute is the Federal Ballpark Estimate—a 

savings goal worksheet. It is very easy to use. I actually went online with it yesterday with Mr. Kirk, entered my data, and found 

some very interesting information. I think I am going to have to 

work an extra 10 years, but it is a great feedback mechanism, and 

it is wonderful in terms of its ease of use. We want to help people 

identify and have a better understanding of their current savings 

pattern to show them how well they are doing in meeting their savings goal. 

We also need to have good evaluation measures. They are critical 

to make sure that our efforts are being effective. In addition, next 

month we will be conducting our fourth Benefits Officer Retirement 

Financial Education Symposium. This symposium will provide 

training for agency benefits officers on a wide variety of Administration topics, as well as updates on retirement readiness initiatives. 

Another key role of OPM is coordination of financial education 

resources. OPM’s role is to identify those resources and create partVerDate Nov 24 2008 13:43 Feb 25, 2010 Jkt 051021 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 P:\DOCS\51021.TXT SAFFAIRS PsN: PAT
5 

1The prepared statement of Mr. Shelton appears in the Appendix on page 41. 

nerships to leverage the use of those materials by our agencies for 

their employees. 

Finally, OPM serves as a catalyst for retirement readiness programs. OPM speakers participate in a variety of conferences involving Federal employees to spread the word on the need for retirement readiness and education programs. We have found that many 

agencies have taken this responsibility seriously. Let me just mention three quick examples. 

The Social Security Administration currently conducts seminars 

for new, mid-career, and pre-retirement employees covering the 

three dimensions of our Retirement Readiness NOW model. They 

also conduct monthly lunch and learn seminars called ‘‘Wealth of 

Wisdom Wednesdays,’’ which cover an array of financial education 

topics. 

In the Veterans Administration (VA), they have established a 

wonderful financial education intranet site for their employees. 

They periodically conduct agency-wide financial education programs that are broadcast to all VA locations, and they operate 

programs with a regional focus to address the local needs of employees. Employees also receive a letter from the VA Secretary that 

reminds them about the importance of financial education and outlines all of the programs the Department has, and having that senior leadership is really important. 

OPM conducts a speaker series on topics such as debt management, Thrift Savings Plan (TSP), college savings plans, and home 

mortgages, and our employees have access to a financial education 

page on the agency intranet. 

However, OPM and agencies cannot improve employees’ retirement readiness without the direct involvement of the employees 

themselves. Employees must take advantage of opportunities provided, and they must assume the personal responsibility for taking 

steps to meet their own retirement goals. 

Mr. Kirk and I stand ready with the rest of the panel to answer 

any questions that you or the Subcommittee might have, Mr. 

Chairman. Thank you for this opportunity to be with you today. 

Senator AKAKA. Thank you very much, Mr. Berry, for your testimony. 

And now I would like to call on Mr. Shelton for your testimony. 

TESTIMONY OF JAMES H. SHELTON, III,1 ASSISTANT DEPUTY 

SECRETARY FOR INNOVATION AND IMPROVEMENT, U.S. DEPARTMENT OF EDUCATION 

Mr. SHELTON. Good afternoon, Chairman Akaka. Thank you for 

the opportunity to come and talk to you today about the Department of Education’s efforts in this area, especially during Financial 

Literacy Month. As you stated, the timing of this is actually prescient given the condition that we find ourselves in economically 

and the role that the lack of financial literacy played in getting us 

here. 

You are a leader in actually putting together a number of the 

programs—one of the most significant programs the Department 

has in the area of financial literacy, and so I want to talk to you 

6 

about the status of that program. I also want to talk to you about 

our Financial Literacy and Education Commission, and then additionally I want to talk to you about the work that we do around 

higher education and the requirements that we have of our lenders 

to participate in supporting our students around financial literacy 

as they obtain grants, awards, and loans. 

The other thing I wanted to do is just tell you how deep the commitment runs to financial literacy inside the Department. I am not 

sure if you are aware that Secretary Duncan was actually instrumental in creating a school in Chicago called the Ariel Charter 

School, which actually has a unique model built around financial 

literacy. Literally in the first grade, each first grade class is given 

$20,000 of real money to invest. They continue to invest those dollars until they graduate from school. The $20,000, they then donate 

the principal back to the first grade class at that time, and they 

split the proceeds that they have earned over that period of time. 

There is a curriculum that goes along with it all the way through, 

both helping them understand all the basic tenets of financial literacy, but also helping them to be savvy investors to understand, 

given that they actually have a stake in the outcome, what savvy 

investment really looks like—what it looks like when it goes well 

and what it looks like when it goes badly. It is that kind of commitment that is shared by not only the Secretary but a number of 

folks inside the Department. 

Now let me tell you about the Excellence in Economic Education 

program. It is administered by my office, the Office of Innovation 

and Improvement. Over the 5-year life of the program, the Department has awarded almost $8.8 million in grants. In the program’s 

first year, fiscal year 2004, we awarded a $1.48 million grant to the 

Council for Economic Education (CEE), formerly known as the National Council on Economic Education. In 2005, through a second 

competition, again, $1.47 million in the first year of a 5-year grant 

to the same organization. In fiscal year 2008, we provided the CEE 

with the third-year continuation award for approximately $1.44 

million. A new competition will be held in 2010. 

CEE has implemented a variety of initiatives designed to improve financial literacy in our schools. Its mission is to promote 

economic and financial literacy for all students in grades K through 

12 through its network of State councils and university-based centers by training thousands of teachers who will reach millions of 

students. CEE’s project activities are intended to help students develop the skills they need to become knowledgeable consumers, savers, investors, and effective participants in a global economy. And 

they complement, because of their sub-grant activities, the work of 

many others in the field who are trying to do similar work. 

Through the EEE program, CEE has awarded nearly $5.45 million and made 495 sub-grants to State and local education agencies 

as well as State and local organizations that provide economic, personal finance, and entrepreneurial education programs. 

To ensure greater cost-effectiveness and corporate community involvement, sub-grantees are required by the EEE program statute 

to match their Federal funding dollar for dollar. These sub-grantees implement activities that include collaboratively establishing 

and conducting teacher training programs for teachers of grades K 

7 

through 12; providing resources to school districts that desire to incorporate economics and personal finance in their curriculum; and 

also encouraging replication of best practices in promoting economic and financial literacy. 

We have been pleased with our partnership with CEE. We 

recently have implemented a new set of metrics for evaluating the 

effectiveness of the program. In collaboration with the Council, we 

determined that we needed to move the Government Performance 

and Results Act (GPRA) measures, the performance measures, because it was difficult to actually collect information on the first set 

of metrics. We now have moved to the second set of metrics, which 

I actually think will start to show results this year, and then we 

will be reporting on that as we move forward. 

Let me talk to you about the Financial Literacy and Education 

Commission now. In addition to administering the Excellence in 

Economic Education program, the Department of Education continues to work with the Financial Literacy and Education Commission in its efforts to improve financial literacy in our country. We 

will also collaborate with its member agencies of the Commission 

to bring together representatives from the State departments of 

education and local education agencies that are focused on this 

issue. The purpose of the meeting is to share available Federal resources on financial education as well as the work of the Council 

for Economic Education and the results from the Council’s evaluation. By bringing together the various folks that are investing right 

now in financial literacy, of which there are many people doing it 

at the State and local level, we believe that in the future we will 

also be able to significantly increase the coherence of the program 

as well. 

We are also working to increase the financial knowledge of postsecondary students. As important as financial literacy is at all levels of education, once an individual has received a Federal student 

loan, the consequences of a lack of adequate financial knowledge 

become more significant both for the individual and for the Federal 

Government. Defaults have declined from 22.4 percent for borrowers entering repayment in 1990 to 5.2 percent for borrowers entering repayment in 2006. There is no tight evidence that shows 

that increased financial literacy is driving that, but you would hope 

that those things are correlated. 

Financial literacy at the postsecondary level includes a number 

of things. Congress has expanded the types of services that must 

be offered through the Federal TRIO and GEAR UP programs. 

These things are focused on first generation college attendees and 

include education or counseling services designed to improve financial literacy and economic literacy of participants. Guarantee agencies and lenders are actually required to have a significant role in 

providing this financial literacy. However, because of the current 

market conditions, many of them are actually struggling to meet 

this condition of their involvement. 

So, in conclusion, the Administration continues to support the 

Excellent in Economic Education program. With continued funding, 

we will support and expand the programs for students and educators and also try and build upon the collaboration and coherence 

of the work that is done by many providers out in the field. We will 

8 

1The prepared statement of Mr. Myers appears in the Appendix on page 47. 

also continue to support evaluation and use the outcomes measures 

to inform program direction. So as we get more evidence on which 

parts of the program are working best, you can expect to see it improve over time. 

In closing, let me once again thank you and the rest of the Subcommittee that would be here for inviting me to speak today. I 

hope this discussion has illustrated the activities of the Excellence 

in Economic Education program and our postsecondary efforts, 

which I think actually need to be linked, and we will continue to 

monitor the effectiveness of our grant and let you know how it is 

going in the future. 

Senator AKAKA. Well, thank you very much, Mr. Shelton, for 

your detailed testimony. Mr. Myers. 

TESTIMONY OF ARTHUR J. MYERS,1 PRINCIPAL DIRECTOR 

AND ACTING UNDER SECRETARY OF DEFENSE FOR MILITARY COMMUNITY AND FAMILY POLICY, U.S. DEPARTMENT 

OF DEFENSE 

Mr. MYERS. Chairman Akaka, aloha. 

Senator AKAKA. Aloha. 

Mr. MYERS. Thank you for the opportunity to appear before you 

to discuss the Department of Defense’s efforts to further improve 

financial literacy among our service members and their families. 

On behalf of the Secretary of Defense and all the men and 

women who serve, I thank you for your strong support for our military community. You can be assured that our commitment to the 

quality of life in the military is stronger than ever. Our senior civilian and military leaders understand that the success of the military mission depends on the well-being of the service members and 

their families. There is no doubt that being financially ready directly impacts the well-being of our people and the retention and 

readiness of the force. 

The Department continues to work in partnership with other 

Federal and State agencies as well as nonprofit organizations, such 

as the Financial Industry Regulatory Authority (FINRA), the Consumer Federation of America, and InCharge Institute. Their awareness programs have been sensitive to military culture and have focused on the needs of the service members and their families. Partnerships have also been important in improving protection of service members and their families. Oversight of lending, investments, 

and insurance has been enhanced through partnerships with Federal and State regulators. 

I am proud to tell you some of our success stories. This last November, we began offering what we call ‘‘financial roadshows.’’ So 

far we have conducted 23 of them at various installations—in fact, 

including one aboard a ship—with resounding success. I have been 

able to observe several of our roadshow events and have been impressed by the enthusiasm and keen level of interest of all. 

For example, at Fort Belvoir, Virginia, earlier this year, roughly 

400 service members and their family members attended a 

roadshow on a very early Saturday morning. Child care was proVerDate Nov 24 2008 13:43 Feb 25, 2010 Jkt 051021 PO 00000 Frm 00012 Fmt 6633 Sfmt 6633 P:\DOCS\51021.TXT SAFFAIRS PsN: PAT
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vided and included a special savings program specifically for the 

children, as you know, financial readiness is a family affair. 

These workshops and presentations are tailored to the unique 

needs of the installation. So far, the five most requested themes for 

workshops have been: Financial planning; credit management, 

credit scores; budget, spending plan; strategies for home buying 

and protecting against foreclosures; and tips for saving and investing. 

I would also like to take this opportunity to highlight some additional facts: 528,737 tax returns have been prepared through our 

Department of Defense Military OneSource operation this season 

at no charge to service members. As alternatives to payday loans, 

service members and families have access to no-interest loans 

through military aid societies, and Defense credit unions offer 

small low-interest loans on our installations worldwide. Military 

banks have followed Federal Deposit Insurance Corporation’s 

(FDIC) lead, offering streamlined applications for small loans on 

our installation. 

Our Department of Defense schools stay on the cutting edge of 

education by offering courses in business and personal finance for 

students during their high school years from the 9th to the 12th 

grade. Designed to make students aware of financial challenges 

confronting them in daily life, topics cover: How to make intelligent 

decisions in spending and saving; how to maintain good financial 

records; how to avoid financial disasters that result from unwise 

use of credit and credit cards; information about banking services, 

insurance choices, and investment choices, as well as how to prepare income tax returns. Who would not want their child to be able 

to prepare a personal budget before graduating high school? 

We recognize that good financial habits need to start even earlier, so beginning last year, we successfully launched the Military 

Youth Financial Campaign as part of Military Saves Week. This 

children and youth program focuses on developing the self-confidence and personal skills needed to manage money. The handson activities teach children and youth how to make lifetime habits 

of managing money to build wealth, increase savings, continue 

learning, and have fun. In 2008, we had well over 5,000 youth participants, and this year that number has already grown to more 

than 7,000, and we make sure each child feeds their piggy bank. 

Service members and their families have sacrificed much in support of this Nation. Therefore, we believe it is our duty to continue 

to provide our military members and their families with the tools 

they need to help them make key financial decisions. 

Thank you, sir, again for your strong support of the military 

members and their families. I will be happy to respond to any 

questions you may have. Thank you. 

Senator AKAKA. Thank you very much, Mr. Myers. Ms. Braunstein, you may go ahead with your statement. 

10 

1The prepared statement of Ms. Braunstein with an attachment appears in the Appendix on 

page 54. 

TESTIMONY OF SANDRA F. BRAUNSTEIN,1 DIRECTOR, DIVISION OF CONSUMER AND COMMUNITY AFFAIRS, BOARD OF 

GOVERNORS OF THE FEDERAL RESERVE SYSTEM 

Ms. BRAUNSTEIN. Chairman Akaka and Senator Burris, I appreciate this opportunity to discuss what the Federal Reserve is doing 

to help Americans make informed financial decisions. This topic is 

particularly relevant in light of current economic conditions and 

the impact that those conditions are having on consumers’ finances. 

The Federal Reserve has a long history of providing useful consumer information. We believe that a well-informed consumer is a 

major line of defense in consumer protection. Educated consumers 

can serve as their own advocates and better protect themselves 

from unnecessarily expensive and abusive financial products and 

practices. However, the Board also believes that financial education 

is not a panacea. An effective consumer protection program should 

include raising consumer awareness and providing accurate information, increasing transparency of products through effective consumer-tested disclosures, and, when necessary, promulgating regulations banning or restricting unfair and abusive products and 

practices. 

This spring, in response to the increasing number of foreclosure 

rescue scams identified by our nonprofit partners, the Board purchased 30-second advertisements in movie theaters. The advertisements, which played in 14 cities with high foreclosure rates, 

warned consumers about foreclosure scams and directed them to 

our website for tips on avoiding foreclosure scams and for other 

useful consumer information. 

The Board has also calculators for consumers to explore mortgage choices and mortgage refinancing. And 2 weeks ago, we 

launched English and Spanish versions of our credit card repayment calculator, which allows consumers to estimate how long it 

will take to pay off their credit card bills if they only make minimum payments. 

While we work diligently to enhance consumer awareness and 

provide financial tools and information, the Board is aware that 

some consumers would benefit from a more structured approach to 

education. For example, across the Federal Reserve System, we 

host teacher education workshops for kindergarten through grade 

12 teachers. These workshops focus on activity-based constructivist 

learning approaches in contrast to more traditional information 

transfer education models. Our goals are to incorporate more experiential learning and to foster the development of critical thinking 

and problem-solving skills. 

At the same time we work to make sure that quality financial 

information reaches consumers, the Federal Reserve System is 

evaluating the impacts of financial education. Board staff, working 

with the Department of Defense, Army Emergency Relief, and San 

Diego City College, conducted a longitudinal study involving two 

groups of soldiers—one receiving a 2-day financial education course 

as part of their individualized training, and a second comparison 

group that did not receive any financial education. Soldiers who 

11 

1The prepared statement of Mr. Hillman appears in the Appendix on page 79. 

took the financial education course, compared to those who did not, 

were more likely to engage in positive financial behaviors and were 

less likely to engage in negative behaviors. 

The Board has responsibilities with respect to writing rules for 

a number of important consumer financial disclosures. The Board 

has developed extensive new disclosures for a variety of financial 

products, most notably credit cards, and we are currently in the 

midst of a major overhaul of mortgage disclosures. 

To ensure that new disclosures are useful to consumers, we have 

increased our use of consumer testing. We are also learning from 

the field of behavioral economics as we continue to develop disclosures that consumers will pay attention to, comprehend, and use 

in their decision making. 

Our consumer testing efforts taught us that even the best disclosures do not offer the best protection to consumers in all cases. 

Some aspects of increasingly complex financial products simply 

cannot be understood or evaluated by consumers, no matter how 

clear the disclosure. In those cases, direct regulation, including the 

prohibition of unfair or deceptive practices, is necessary. The Board 

took this approach with separate rulemakings that govern highcost mortgage loans and credit cards. 

In summary, we believe that a comprehensive approach best enables consumers to function effectively in the financial services 

marketplace. By enhancing consumer awareness, by providing reliable information to help consumers understand financial products 

and services, by requiring meaningful and consumer-tested credit 

disclosures, and by prohibiting unfair and deceptive financial products and practices, we can help consumers make informed decisions 

and protect them from abuse. 

Thank you very much. 

Senator AKAKA. Thank you very much, Ms. Braunstein. Mr. 

Hillman, will you please proceed with your statement? 

TESTIMONY OF RICHARD J. HILLMAN,1 MANAGING DIRECTOR, 

FINANCIAL MARKETS AND COMMUNITY INVESTMENT, U.S. 

GOVERNMENT ACCOUNTABILITY OFFICE 

Mr. HILLMAN. Thank you, Chairman Akaka and Senator Burris. 

I am happy to be here today to address the important topic of financial literacy. 

In 2006, Government Accountability Office (GAO) issued a report 

assessing the effectiveness of the Federal Financial Literacy and 

Education Commission, and our report included several recommendations. My prepared statement provides an update on the 

status of those recommendations, but this afternoon I would like to 

focus on two important recommendations—the first related to the 

National Strategy for Financial Literacy and the second related to 

fostering partnerships. 

In 2006, we reported that the Commission’s National Strategy 

was a useful first step in focusing attention on financial literacy, 

but largely was descriptive rather than strategic. The strategy was 

comprehensive in many respects, but its recommendations were 

presented as ‘‘calls to action’’ that generally did not include a plan 

12 

for implementation. We recommended that the Commission revise 

the strategy to include a concrete definition for ‘‘financial literacy’’ 

and ‘‘education,’’ specific goals and performance measures, the actions needed to accomplish these goals, and a description of the resources required. 

The Commission has now provided definitions for ‘‘financial literacy’’ and ‘‘financial education,’’ but has not incorporated the other 

elements that we recommended. For the most part, the revisions to 

the strategy since 2006 have consisted of newly developed calls to 

action, but they have not represented a fundamental shift in 

approach that incorporates specific recommendations on roles, 

funding, and activities. As a result, we continue to believe that the 

National Strategy for Financial Literacy, while beneficial in some 

regards, still does not serve as a true functional strategy that is a 

plan of action intended to achieve specifically stated goals. 

Our 2006 report also recommended that the Commission consider 

additional ways of partnering with private organizations and with 

State and local governments. We believe that the Commission has 

made progress in this area. In response to GAO’s report in April 

2007, the Commission created the National Financial Education 

Network which helps facilitate financial education at the State and 

local level. Our review indicates that the network has been a useful 

initial action to foster communication and collaboration among Federal, State, and local entities that share the common goal of improving financial literacy. In particular, network representatives 

with whom we spoke felt that the network provided an opportunity 

for members to learn from other States and localities and what 

they were doing and sharing of best practices. 

The Commission also played a role in facilitating the creation of 

the President’s Advisory Council on Financial Literacy and has provided administrative support to the council. This council was created by an Executive order in January 2008 and includes 16 prominent members who represent private corporations, nonprofit organizations, and academic institutions, amongst other entities. The 

council has a 2-year term that expires in January 2010. We believe 

that thus far the council’s activities have been productive and beneficial, particularly in helping to focus high-level attention on financial literacy amongst leaders in the nongovernmental sector and in 

facilitating strategic alliances amongst Federal, private, and nonprofit enterprises. 

We recognize that the Financial Literacy and Education Commission faces some real challenges in achieving its mission. First, the 

Commission has limited resources. It has no independent budget, 

and it has had only limited funding directed to it. As a result, to 

carry out its activities, the Commission has largely relied on limited financial and in-kind resources contributed by its member 

agencies. The Treasury’s Office of Financial Education provides the 

Commission with its primary administrative support, but this office 

is quite small, averaging about five staff to support its own and the 

Commission’s activities. 

Further, the Commission’s governance structure has both advantages and disadvantages. It consists of 20 Federal agencies who operate by consensus, but no independent budget and no legal authority to compel member agencies to take action. This has the 

13 

benefit of bringing together a large number of players to achieve 

the common goal of improving Americans’ financial literacy. At the 

same time, though, there are inherent challenges in coordinating 

the efforts of 20 Federal agencies, each with its own set of interests, resources, and constituencies. 

Mr. Chairman, this concludes my prepared statement. I would be 

pleased to address any questions at the appropriate time. 

Senator AKAKA. Thank you very much, Mr. Hillman. 

I want to thank you for your testimony, and I look forward to 

asking you questions. But before I begin with questions, I would 

like to call on Senator Burris for any opening statement he may 

have. 

OPENING STATEMENT OF SENATOR BURRIS 

Senator BURRIS. Thank you, Mr. Chairman and members of the 

panel. I would just like to welcome our witnesses today and thank 

them for taking the time to be here and tell us about the work 

their various agencies are doing to promote financial literacy and 

education throughout the country. That is kind of my strong suit. 

I have been in finance. I started out as a Federal employee, as a 

national bank examiner for the Comptroller of the Currency, so I 

have been through the financial part with the Federal Government 

and ended up in the banking business for many years before I became a public servant rather than a politician. 

I know that this issue is important to Senator Akaka, and I commend you on the timing of this hearing, Mr. Chairman, because it 

is the end of the Financial Literacy Month, so you timed that just 

right. 

I also understand that you held a hearing on this subject 2 years 

ago, and we are here today to determine what steps have been 

made in the past 2 years to improve the work of the Financial Literacy and Education Commission to develop a retirement financial 

literacy and education strategy for the Federal Government. And 

just by way of another thought, I just hope that in some kind of 

way you were able to reach our school children with some of the 

literature and materials that you may be putting out so that they 

can get a feel for what that dime, dollar, and what money really 

means and what it is, because we know some of our—especially the 

ones in this college generation now who can get the credit cards 

and get them mailed to them, the parents do not know that they 

got the credit card, and they are out of money, and they do not 

know that credit cards means that eventually somebody will have 

to pay the bill. So I just hope that some of that was included in 

the Commission’s work. 

That is my opening statement, Mr. Chairman, and I might have 

a question or two as we proceed. Thank you. 

Senator AKAKA. Thank you very much, Senator Burris. 

Mr. Berry, it is good to have you here and to hear what OPM 

is doing in this area of financial literacy. It pleases me that OPM 

values the use of evaluation measures to determine the effectiveness of its financial literacy programs. How will OPM determine 

what goals and benchmarks are most appropriate? And when will 

these benchmarks be put in place? 

14 

Mr. BERRY. Mr. Chairman, thank you. As I understand it, our 

strategy basically requires each agency to develop their own plan 

and to report annually to OPM on their retirement readiness strategies. Mr. Kirk and his team go over each agency’s annual report 

to make sure they include good metrics, they follow good accountability measures, and they provide us with the data we need to go 

forward with this program. 

Mr. Kirk, is there anything that you would like to add to this in 

terms of our measurement program for the Chairman, with the 

Chairman’s indulgence? 

Senator AKAKA. Yes. Mr. Kirk. 

Mr. KIRK. Thank you, Mr. Chairman. In addition to the individual agency assessments, OPM has two measures that we will be 

implementing this calendar year. 

One is a measure of employee knowledge of benefits. The Federal 

benefits program is an important foundation of the financial preparedness of our employees, and this fall we are going to be 

benchmarking a measure of employee knowledge of those benefits 

programs so we know where we should target additional education 

for employees so they can understand those benefits and maximize 

them. 

The second measure that we will be implementing this calendar 

year is a retirement readiness index. We will be having an online 

tool called ‘‘Retirement Readiness Profile’’ that allows individuals 

to get an assessment of where they are in the state of retirement 

readiness on the three dimensions that the Director mentioned. 

This profile will calculate an index score, which we will be able to 

then monitor on an aggregate basis. 

With this information we hope to be better able to assess the 

pulse of the Federal workforce to determine which areas employees 

are making improvements in retirement readiness, and which 

areas they may need more help. Then we can target additional development and training programs for employees in those areas. 

Senator AKAKA. Thank you very much for that. I am glad to hear 

you say that in essence you are informing your people about what 

benefits there are available, and in many cases, the people in the 

Federal workforce do not know that there are benefits available to 

them. So this is very important, and I am extremely interested in 

your readiness program, in this case retirement readiness, to help 

people plan their golden years after their work here. So thank you 

for that. 

Mr. Shelton, I greatly appreciated your testimony today. At our 

hearings during the previous Administration, the Department of 

Education (DOE) witness would explain why funding for the EEE 

was eliminated in the President’s budget. After years of continuing 

to keep it funded with the assistance of Senators Harkin, Specter, 

and others, I am hopeful that we will be able to increase the resources available for the EEE program. 

Mr. Shelton, while recognizing that there is a need for increased 

funding and resources for financial literacy efforts, can you point 

out specific areas where additional resources for sub-grant activities would have the most impact? 

Mr. SHELTON. Mr. Chairman, I believe there are at least two 

areas that we would like to see some additional sub-grants take 

15 

place. One is that what is apparent is that there is a significant 

level of activity around financial literacy and education in particular in the K–12 sector going on today. If you look through the 

collection of grants that have been made, sub-granted by the program, you see a number of very good examples. But what is clear 

is that we still are lacking the mechanisms for clear collaboration 

and actually steering the resources in a way that they are actually 

used, in a way that is efficient, and gets leverage off of everything 

that is happening in the field. So you see a lot of overlap and a 

lot of discontinuity in the field. Increasing resources directly to 

those coordinating networks would actually be significantly helpful 

both at the State level and the localities. 

The second thing is that there are certain organizations that 

seem to be emerging to the top in terms of their ability to have impact and their measuring actually of student effectiveness. I happen to know this by looking through the profile and my experience 

with grantees in particular. So by actually getting the grantees increased dollars that actually have metrics of success, I believe we 

will also start to see a greater impact with the students in the 

field, the students, and teachers that are being served directly by 

the programs. 

Senator AKAKA. Thank you. 

Ms. Braunstein, I continue to be concerned that consumer access 

to mainstream financial institutions remains limited in underserved communities, especially as affordable credit is becoming increasingly difficult for consumers to obtain. Without access to 

mainstream financial institutions, working families miss out on opportunities for savings, borrowing, and low-cost remittances. 

What must be done to improve access to mainstream financial institutions in economically underserved communities? 

Ms. BRAUNSTEIN. Chairman, we share your concern about the 

unbanked, and we have a number of programs going on around the 

country, especially through the reserve banks, where they are 

working specifically in their communities to try to bring the 

unbanked into the banking system. 

Attached to my testimony there is an appendix which lists a 

number of programs. You will see in that appendix there is a program called ‘‘Bank On’’ that is around the country, and it is ‘‘Bank 

On Cleveland,’’ or ‘‘Bank On St. Louis,’’ wherever it is located. And 

that program was established specifically to try to bring people into 

the banking mainstream, and the Federal Reserve is actively participating in a number of locations with that program, as well as 

we look for other means to do that as much as possible. 

Senator AKAKA. Thank you. 

Mr. Myers, I am encouraged by Department of Defense’s (DOD) 

success at promoting the message that obtaining financial counseling and assistance is a far better option than using predatory 

loans. However, a previous GAO report identified reluctance among 

some service members to reveal financial problems due to possible 

implications to their careers. We cannot allow this stigma to prevent service members with financial problems from seeking financial counseling. 

What must be done to remove any stigma that still deters personnel from seeking financial assistance? That is the question, but 

16 

let me, before I ask you for your response, tell you that in Honolulu 

we did hold a session in the largest hall we had there for military 

personnel, and it was such a success. It was great to see young couples from all branches to be there, and it was so well done, as a 

matter of fact, the admiral made good remarks on that and told me 

this is something that maybe we should be doing annually. But it 

was good to see the young couples there and to see the smiles on 

their faces as they left the hall. And I think more sessions like that 

throughout the country would certainly help the military personnel. 

So what must be done to remove any stigma that still deters personnel from seeking financial assistance? 

Mr. MYERS. I believe it is a three-prong attack: Education, opportunity, and leadership support. In the military now, when you are 

in basic training, you get financial management education. After 

you leave basic training, as part of your indoctrination, that continues. In all of our support centers and our bases, we have financial managers to assist. 

Opportunities—we started these roadshows, and we have done 

them at 23 installations, and what we actually do is ask the commander, ‘‘What are the issues as far as financial management at 

your base?’’ We plan to go to Nellis Air Force Base in a few 

months. Their issue is housing because they have been so hit by 

the housing prices. In fact, we think later on this year we are going 

to Hawaii to do a roadshow there. We will go to Alaska, and all 

50 States. It is an ongoing thing, as long as we have the opportunities. 

Also, before our Guard and Reserve deploy, we send financial 

consultants to sit down with the member and their family to go 

over a financial plan. When they come back, we have financial consultants at the base. At Fort Drum, they came back in November. 

Our financial consultants were supposed to leave in January. They 

are doing such a great job—they are still there helping those soldiers. 

We also have financial roadshows at other bases. We had one at 

Fort Myer yesterday. Who opened it up? The commander of Fort 

Myer. We had one in the Pentagon last year. It lasted 4 days. We 

had 400 people every day. This year we had 1,000 every day. We 

extended it for 5 days. Talk about senior leadership. General 

Petraeus was there along with other senior leadership. Admiral 

Mullen, now the Chairman, directed every Navy member to have 

a financial plan. 

Our next goal is to have our people who join the service establish 

a financial plan up front. We will review it with them. We will review it when they rotate, get married, and have significant life 

changes. 

So I believe with everything we are doing, it is no longer a stigma. It is in vogue to get your finances in order, and we are starting 

with the children. We are doing it in our youth centers, in our DOD 

schools and with our military members. 

So we are not satisfied, we will never be satisfied. There is always something to do. But I think we have a great start. 

Senator AKAKA. Thank you very much, Mr. Myers. 

17 

Let me ask a question of Mr. Hillman before I call on Senator 

Burris for his questions. 

Mr. Hillman, thank you very much for the work that you and 

your colleagues have carried out at GAO to assess the work of the 

Commission. As you described in your testimony, the Commission 

could do more to incorporate GAO’s recommendations and modify 

the national strategy to help ensure accountability. Could you give 

some examples of outcome measures that the Commission could 

utilize or describe how the Commission might determine such important benchmarks? 

Mr. HILLMAN. I would be happy to do that. We did find the national strategy to be a very comprehensive document to include a 

good amount of information on key issues associated with the importance of improving financial literacy. However, we had concerns 

that the strategy itself did not have desirable characteristics that 

we have seen in other national strategies. The question that you 

raise regarding the establishment of goals or performance measures is one of those such areas that we saw as a weakness in the 

national strategy. 

Examples of such goals that we would be hoping to see in such 

a strategy would be those that provide for outcomes as opposed to 

processes or those that provide for a change in consumer behavior. 

There are a number of measures that could be used to gauge the 

progress in improving financial literacy in America, such things as 

reducing the number of unbanked Americans and keeping track of 

those activities; perhaps increasing the number of people who begin 

saving for retirement; or even perhaps increasing the number of 

people checking their credit report to determine whether or not 

they achieve a high enough rating to obtain loans at reasonable 

rates. 

Measures such as these that change behavior in individuals 

could be a better indicator of the extent to which the many programs and initiatives that cut across the Federal Government are 

beginning to achieve their purposes. 

Senator AKAKA. Well, thank you very much for your response. 

Senator Burris, your questions. 

Senator BURRIS. Thank you, Mr. Chairman. 

Mr. Shelton, please bring me up to date in terms of the educational literacy program. Did you send out materials or how did 

you communicate with the various school districts? Did you do it 

at the State level with the State Boards of Education or did you 

do it on the local level? What type of contact did you have, and how 

did it proceed? 

Mr. SHELTON. Senator, the vast majority of the activity takes 

place through one of our grantees that I spoke about during my 

testimony that actually does outreach to States and local education 

agencies and makes sub-grants to a number of State and local 

agencies as well as nonprofit organizations that are involved in financial literacy. The grant making is 75 percent of the total funding that is allocated to the EEE program each year, which is $1.4 

to $1.45 million almost every year since its founding. 

Senator BURRIS. How far does that go? 

Mr. SHELTON. It was originally founded in 2004—how far does 

the funding go? 

18 

Senator BURRIS. Yes. Who are you reaching with—I do not think you could reach the Chicago school district with $1 million, but 

who are you reaching? Are private contractors doing this? 

Mr. SHELTON. The sub-grants that go to the agencies are complementary to—one, they are required to have matching funds. 

But, two, they are small grants that go into usually what would be 

a larger budget of each of these organizations complementing their 

work. My understanding, having recently started to review the program, is that the individual small grants are appreciated. In addition, the coordinating activities that the grantee provides are also 

considered to be valuable as well, bringing people together so that 

they can start to share information and leverage each other’s work. 

It is a reasonable question, to say the least, as to whether or not 

there is sufficient funding. 

Senator BURRIS. I am pretty sure you could always say you could 

use some more, right, to reach more—because as Mr. Myers said, 

literacy not only with Federal employees but literacy in the Nation 

is going to start with our children. So we have really got to put 

that into our elementary school system. Wouldn’t you agree, Mr. 

Shelton? 

Mr. SHELTON. Senator, a number of States—actually, 28 States 

actually have financial literacy built into their standards as it 

stands today. It stands to reason that there would be a number of 

States that actually should, especially given these conditions. Additionally, there are literally hundreds if not thousands of organizations that are involved in providing financial literacy to students 

in the K–12 space. Most of them have funding from a variety of 

sources. 

What we have not seen, actually, is the kind of coordination that 

would actually ensure that each student is getting the kind of financial literacy and training that they need. And, in fact, the programs that are delivering these services are actually doing the kind 

of evaluations to tell whether or not the students are actually benefiting from the work. 

So lots of activity, not clear, lots of impact, little funding coming 

from us, not clear, it takes a lot of additional funding to get the 

kind of collaboration and coherence, but definitely more than what 

we have today. 

Senator BURRIS. Very good. 

Ms. Braunstein, you made mention about credit cards. I want to 

know what happened to that study that you did to say that you 

have got to pay off more than the initial minimum payment. Is that 

what you testified to? Did I hear you say that you had some training by convincing them to pay off more than the initial downpayment and how long it will take them to pay it off? 

Ms. BRAUNSTEIN. Yes, in the legislation that passed through 

Congress a couple years ago, there was a provision—it was bankruptcy legislation. There was a provision that required us to develop information that would help consumers understand that 

when they only made the minimum payments on their credit card 

bills that it might take them a very long time to pay off those bills. 

So we have developed online calculators that are available where 

people can enter in information from their credit card statements, 

their balance amount, their minimum payment amount, their interVerDate Nov 24 2008 13:43 Feb 25, 2010 Jkt 051021 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 P:\DOCS\51021.TXT SAFFAIRS PsN: PAT
19 

est rate, to see, if they only made that minimum payment, how 

long it would take them. 

It also allows them to look at other kinds of payment streams. 

So if they decided they wanted to pay double the minimum payment, what would that mean for them? Or if they decided on the 

other hand that they wanted to pay off that balance in a certain 

amount of time, how much would they have to pay per month? 

This information is also available by telephone—we have a tollfree number for consumers—as well as the website. 

Senator BURRIS. Was this just for Federal employees or was this 

for the benefit of—— 

Ms. BRAUNSTEIN. No, this is for the general public. It is up there 

now on the website. We launched it about 2 weeks ago. 

Senator BURRIS. Oh, because I am now just trying to think back 

when I was a civilian before I got here on January 15. I have heard 

some local promotions about paying off your credit cards or if you 

only pay the minimum payment, but I did not even know the Federal Government had any role in trying to educate the consumer. 

And I lived in a major metropolitan area, and none of this information—and I consider myself pretty astute in terms of finances, and 

I have no recollection of any of this information reaching the public. So how was this disseminated? 

Ms. BRAUNSTEIN. Well, card companies will be required to put on 

the periodic statements that consumers receive, you will start seeing this. 

Senator BURRIS. They do not read their statements. 

Ms. BRAUNSTEIN. It will be very prominent at the top of the 

statement. Next to the box where they have the minimum payment, there will be something there that tells them where to call 

or what the website address is for more information about what 

only paying the minimum payment would mean. That will be very 

prominent. 

Senator BURRIS. Have you ever taken a poll of how many people 

who have credit cards get their monthly statement and read anything on the statement other than what the balance is and they 

send in the minimum payment? 

Ms. BRAUNSTEIN. No, but I think—— 

Senator BURRIS. I bet 99 percent of the people who get that 

statement do not even know that is on there. 

Ms. BRAUNSTEIN. I think people do look—even though they do 

not look at a lot of other information on their statement, I think 

the first thing they go to is what do I have to pay this month, and 

it is going to be right up there next to that minimum payment, and 

when is my due date, and that is where the information will be. 

Senator BURRIS. Have you done any type of polling or analysis 

on how many people actually read that? 

Ms. BRAUNSTEIN. Well, as a matter of fact, we just redesigned 

credit card disclosures. We did a major project on that, utilizing 

consumer testing where we used focus groups of consumers to first 

find out what kinds of information is important to consumers about 

credit cards, not just on the periodic statements but also when they 

receive solicitations in the mail and in their account-opening disclosures. And as a result of that, we have redesigned disclosures, and 

then we did further testing with one-on-one interviews to make 

20 

sure that consumers could understand the information that was 

there and that they were comprehending it correctly. And then we 

did a major quantitative testing of a large number of consumers to 

make sure that the disclosures we had redesigned would work. 

So, yes, we have tested that, and part of that testing was the 

statement about the minimum payment, and people did notice it 

and did understand it. 

Senator BURRIS. Well, do you think that the President’s position 

on credit cards and the latest promotion will help the situation at 

all? He is going to take a move to try to deal with disclosures by 

our credit card companies and simple information that even a fifth 

grader can read and understand? Will that help? 

Ms. BRAUNSTEIN. Yes, and we have tried to do that. We issued 

earlier this year or at the end of last year major sweeping regulations revamping the entire industry, both with disclosures as well 

as prohibiting unfair and deceptive practices that we identified. 

And we think that those rules, when they go into effect, will help 

tremendously. 

Senator BURRIS. Does the Federal Reserve still have those educational programs, where you can go to the Federal Reserve and 

learn about money? I recall in my district when I was there where 

you could actually go and see money and see it being burned, see 

it being— the old bills being dealt with, and school kids used to go 

down—I think in Chicago, is that the Fifth Federal Reserve District? 

Ms. BRAUNSTEIN. No, the seventh. 

Senator BURRIS. The seventh, right. That is right. Are those programs still going on? 

Ms. BRAUNSTEIN. Yes, they are. And, in fact, many of them have 

been enhanced in recent years, and they are quite robust—some of 

the reserve banks have quite robust programs, and they constantly 

bring classes of school children through. 

Senator BURRIS. Mr. Hillman, you noted that the President’s Advisory Council has been successful in creating needed partnerships 

with the public and private sectors. This council has a 2-year term. 

Should it be extended or restaffed? Or have any plans been made 

for the future of this program? 

Mr. HILLMAN. As part of the work that we did for this hearing, 

we updated the status of our recommendations in our December 

2006 report, so we have not had a comprehensive look at the accomplishments of the President’s Advisory Council on Financial 

Literacy. We have, though, reviewed its annual report and found 

it to include a number of key accomplishments that were quite impressive. Overall, we felt that the first ever National Financial Literacy Challenge that it administered with the Department of 

Treasury was one key, significant accomplishment that the council 

has had. 

Our initial reviews showed that the council was an important 

first step in promoting financial literacy and it would be useful for 

it to be reinstituted. 

Senator BURRIS. Does anyone have overall jurisdiction to deal 

with—is a separate group dealing with Federal employees for financial literacy and another group dealing with the public? Or is 

it just based on your particular—like the Federal Reserve has pubVerDate Nov 24 2008 13:43 Feb 25, 2010 Jkt 051021 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 P:\DOCS\51021.TXT SAFFAIRS PsN: PAT
21 

lic responsibility and the Department of Education has Federal responsibility and the department of personnel—Mr. Berry, you are 

primarily government centered and very little direct with the public. So do you have any public contacts or is yours only with Federal employees? 

Mr. BERRY. Primarily Federal employees and retirees from 

OPM’s perspective. 

Senator BURRIS. And now are they getting an education in what 

to do with their—the fact that they may start to work, is there any 

type of material that is given to a young Federal worker who comes 

in to convince them, if they are just out of college, and they are 

24 or 25 years old, and they have really got all those loans, and 

they need every penny that they can make, because they are not 

making that much money, do you have any luck in trying to convince them that, ‘‘hey, you ought to start thinking about retirement 

and putting a dollar away for the future?’’ 

Mr. BERRY. Yes, sir. In fact, I can personally testify to my own 

experience. I started working on Capitol Hill as one of the people 

sitting behind you there when I was 25, and I was under what is 

called the Federal Employees’ Retirement System (FERS). In my 

first briefing, the person at the House of Representatives—I was 

working on the House side—explained to me how important it was 

to invest, and specifically to take the full advantage of the government contribution. In other words, if you are not investing, you are 

really not maximizing the opportunity that is on the table. And, 

thankfully, I started investing when I was 25. 

Senator BURRIS. Oh, you did? 

Mr. BERRY. Yes, sir. 

Senator BURRIS. Ninety-nine percent of them do not do it because 

they need the money, Mr. Berry. 

Mr. BERRY. And I think there is always that tendency to think 

of retirement as a long way away. 

Senator BURRIS. Tell me about it. 

Mr. BERRY. And I think it is our generation’s responsibility to remind people it comes faster than you expect. 

Senator BURRIS. You better believe it does. [Laughter.] 

I wish there was some kind of way—because I have tried to do 

this. Well, I managed a law firm, and we hired young associates 

or support staff at the law firm, and naturally they are making a 

decent salary, but you cannot convince them to save a dime out of 

a dollar. That is what my dad taught me. I have never been rich, 

but my dad was just instrumental in if you make a dollar, you save 

a dime. And I have never forgotten that. And I tried to teach it to 

my kids. They did not follow it, though. [Laughter.] 

Yes, Ms. Braunstein? 

Ms. BRAUNSTEIN. Senator, I just wanted to let you know that in 

addition to all the public programs that we do at the Federal Reserve, we actually have an extremely active internal workplace 

education program for Federal Reserve employees that includes information about retirement. We have an extremely high take-up 

rate on our thrift plan. And we have information on retirement as 

well as other facets of financial education, including homeownership and those responsibilities. We do programs quite consistently 

on that for our staff. 

22 

Senator BURRIS. I wish that you would try to keep some type of 

data on that, some type of a record so we can see how successful 

it is, how many people are really doing it. And hopefully that data 

is compiled so you can look back in 20 years and see whether that 

person really did that individually, like Mr. Berry said he was able 

to save. So, therefore, he can take one of these low-paying Federal 

jobs and live on his interest and income that he made from his wise 

investments. But I hope that there is some type of follow-up study 

that will be taking place. 

Mr. Chairman, I see I am over my time, but I appreciate it. I 

might have to slip out on you again to go to another hearing. But 

I really appreciate the opportunity, Mr. Chairman. Thank you very 

much. And thank you, panel. I really appreciate the opportunity. 

Senator AKAKA. Thank you. 

Let me ask a second round of questions. Director Berry, what has 

been mentioned in questions asked seems to bear on retirement 

and preparation for retirement. In order to retire on one’s own 

terms, an individual must manage their debt responsibility, choose 

a mortgage suitable to their financial situation, and invest appropriately by utilizing the TSP and other options. 

What must be done to ensure that Federal workers have the ability to make sound financial decisions in different situations that 

have long-term consequences so they can retire on their own 

terms? 

Mr. BERRY. Senator, I think if there is a bright spot in the dark 

storm which we find ourselves in, it is that we have everyone’s attention, and I think that is a wonderful opportunity for us. It is a 

chance to pass on that educational message that Senator Burris 

referenced concerning the importance of saving. That message is if 

you want that quality of life and you do not save, you will not have 

it. 

I think people have received a very big wake-up call. I think 

there was a perception, as you mentioned, Mr. Chairman, in your 

opening statement, that when times are good, people tend to ignore 

their 401(k) or their TSP plan. I do not think anyone is ignoring 

them anymore, and they are paying attention to just how careful 

they have got to be and how much ground they are going to have 

to catch up. 

In addition, Mr. Chairman, I think it is important to point out 

we do not consider preparing for retirement as just being financially ready. We look at being mentally and socially ready as well 

as focusing on overall health. There are steps you can take now 

that will dramatically improve your health and overall quality of 

life in retirement years. For example, building exercise into your 

regimen and paying attention to your diet can mean quality of life 

in your retirement years is going to be much better. 

Social preparation is also important. We ask people to actually 

think about how they want to live when they retire. For example, 

if they are gregarious, social, or networking people, where might 

they want to retire? Do they plan to retire in an area that, let us 

say, where the cost-of-living might be less, like Kansas? Or are 

they planning to be in the Manhattan area of New York where the 

cost-of-living is much higher? This scenario will require a dramatically different planning scenario. 

23 

So we are trying to get people to think socially. Where does their 

family live? Where do their kids live? What type of lifestyle do they 

want to maintain in their retirement years? Because that will affect their financial decision making as well. And so we are trying 

to get our Federal employees to focus not just on the financial but 

on the health and sociability index, if you will, because they all 

really knit together very importantly, sir. 

Senator AKAKA. Thank you. 

Mr. Shelton, I very much appreciate that President Obama includes financial literacy in his platform to help working families. 

As you mentioned, Secretary Duncan has also long been a supporter of these efforts as he was the founder of the Ariel Community Academy in Chicago that uses an innovative financial literacy 

curriculum. 

The leadership on financial literacy exhibited by the President, 

Secretary, and many others is all the more critical now because so 

many Americans are struggling financially. Public opinion polls 

show that citizens have become much more interested in economic 

issues over the past couple years. We have a tremendous opportunity to capitalize on this interest to foster and inform consumers, 

investors, and entrepreneurs to rebuild and strengthen our economy. The Department of Education and the Financial Literacy and 

Education Commission must work together to better educate, protect, and empower our citizens. 

Mr. Shelton, will the Department of Education provide high-level 

involvement and support to the Commission? 

Mr. SHELTON. Well, I will be participating myself, so hopefully 

that is high. 

Senator AKAKA. Well, that is direct, yes. [Laughter.] 

I hope that continues and we begin to move on some of the recommendations of the GAO. 

Ms. Braunstein, I appreciate the Federal Reserve’s work to examine the impact of financial education. I am particularly interested in results from the research conducted with the Department 

of Defense. What lessons can we learn from this research that can 

help improve the effectiveness of other financial literacy efforts? 

Ms. BRAUNSTEIN. We are very pleased to have done this study, 

and we think that the results have been very interesting. One of 

the things, though, we needed to be a little careful with is that 

some of the lessons we have learned from this may not be able to 

be generalized to the overall population because this was a very 

unique sample of people. It was all soldiers, so it is hard to say 

whether some of this would apply to the general population. 

But we do think that, one, of course, more research is needed in 

this area. There is not enough research going on right now on effectiveness as opposed to people giving quizzes on what did you learn 

in the course. That is not really showing the impact or the effect. 

It is behavior change that is important. And that is one of the 

things that we looked at. 

One of the interesting results from this study is that we found 

that when we looked at the sample and, in particular, the ones who 

had financial education, some of the strongest results were from 

participants who had earlier experiences with financial education. 

Either they had a course in high school on it, or they had other 

24 

kinds of personal experiences where they needed to use financial 

education. And we think that is something that also needs to be 

looked at further because it mitigates for having earlier interventions, which we do believe in. 

And the other thing is that the financial education that they got 

in this particular study was 16 hours of education on the weekends, and one of the things that we also think needs further study 

is whether or not that was the right intervention, if other interventions would work better or worse or, as well. And so that is another 

area where we are looking to hopefully see more research. 

Senator AKAKA. Mr. Myers, the Talent-Nelson amendment enacted in 2007 limits the terms of consumer credit extended to military families. The statute prohibits lenders from charging interest 

rates in excess of 36 percent to all military families. What is your 

evaluation of the impact of this legislation? And what impact has 

it had on our military families? 

Mr. MYERS. Well, first of all, I think the impact has been extremely positive, and as a result, through education, through our 

aid societies now providing interest-free loans, our military personnel are more educated on where they can get help. 

Another thing that we did as far as education, we have, as I told 

you, military roadshows, and we have financial consultants there 

where you can talk one on one and so forth. But there are some 

people that just do not want to do that. So we also started another 

program, and I gave your staff some information on it. It is a Military OneSource operation. It is a toll-free number where military 

personnel call this number. On there we have help for all sorts of 

things, including financial management. You have a financial management problem, we will hook you up with a financial counselor, 

one of our financial counselors. They will explain over the phone 

with you what the issue is, how to solve it, and if you want to meet 

with them one on one, it works out. 

So what we have found out as we talked with State and Federal 

regulators, is that the lenders are complying with the amendment 

because they cannot make money with the rules of the 36 percent 

cap. So it has been very positive. 

In fact, some of the payday lenders thought that the military 

would rebel against it because it was a way to get money. We did 

not hear anything. In fact, I think a lot of families thought that 

was a great thing. We opened up the avenues for them to get the 

money and educated them how to manage it. So thank you. 

Senator AKAKA. Thank you very much for your response. 

Mr. Hillman, you have identified that limited resources present 

a challenge for Financial Literacy and Education Commission 

(FLEC). What resources need to be provided to the Commission so 

that it can adequately fulfill its mandates? 

Mr. HILLMAN. We found as a result of our review, Mr. Chairman, 

that the governance structure has significant advantages and disadvantages. While the structure presents certain challenges, it has 

the benefit of bringing together 20 departments and agencies on 

cross-cutting issues and encouraging building a consensus on financial literacy issues. Options, though, to improve the Commission 

and its funding levels could perhaps come from the Congress itself 

in requiring the Commission and providing it with its own legal 

25 

and funding authority, perhaps requiring that it set priorities in 

the financial literacy area or requiring that the Commission set 

specific goals and funding levels for improving financial literacy. 

Each of these changes would have their own set of advantages 

and disadvantages. However, absent congressional attention, at 

GAO we believe the Commission itself has the ability to implement 

many of those measures on their own. 

Senator AKAKA. Thank you for that recommendation. 

Mr. Shelton, the Native Financial Education Coalition has identified the need for increased financial literacy in native communities 

to help ensure financial security and self-sufficiency. The coalition 

has indicated that the EEE is a promising program that has helped 

further education in native communities. 

How has EEE benefited Native American, Native Hawaiian, and 

Alaska Native communities? 

Mr. SHELTON. Chairman, at least two sub-grantees—the Alaska 

Council on Economic Education and the Hawaiian Council on Economic Education—have benefited directly from sub-grants. They 

currently provide teacher training and classroom resources, and 

they focus on these unique populations. For 2010, the notice by the 

applicants will also include criteria to ensure that the needs of traditionally underrepresented groups are addressed. 

Senator AKAKA. Thank you very much. 

Mr. Hillman, you indicate in your written statement that in late 

2008, the Treasury Department signed a volunteer service agreement with a doctoral student to determine the availability and duplication of program resources provided by commission agencies. Is 

this a common practice found in Federal commissions? And what 

are the risks of using volunteers for evaluation of Federal efforts? 

Mr. HILLMAN. The Treasury Department used a doctoral student 

to provide an assessment of the extent to which there was duplication or overlap in existing programs largely because it lacked the 

funding to provide for an independent professional assessment. We 

have not yet seen the results of this evaluation and hope to see it 

later in May. 

There are a number of trade-offs associated with a volunteer student assessment as opposed to a professional assessment. We are 

hopeful that the assessment that is provided goes a long way to 

provided information useful for determining the extent to which 

there is duplication and overlap. 

We are disappointed, however, that such an assessment that is 

being contemplated by the Treasury currently does not include any 

evaluation of the impact of the programs that the 20 departments 

and agencies have ongoing, and that is what we are really hoping 

to see, is a results orientation and assessment of the impact of the 

efforts that are taking place as opposed to a description of what 

has been happening. 

Senator AKAKA. Thank you very much, Mr. Hillman. I want to 

thank this panel for testifying. I sense an enthusiasm in this area 

of financial literacy and the importance it has for the Federal workforce. And I want to thank you so much for your efforts and your 

responses to our questions. What you have done is you have helped 

this Subcommittee look forward. Should there be further legislation 

26 

1The prepared statement of Mr. Duvall appears in the Appendix on page 97. 

that would help the cause, we certainly want to consider that as 

well. And you have helped us to determine that. 

Again, I want to say thank you to all of you for being here today 

and for your testimony. 

At this time I want to welcome the second panel of witnesses. 

Welcome to our second panel: Robert Duvall, President and CEO 

of the Council for Economic Education; and Dallas Salisbury, President and CEO of the Employee Benefit Research Institute. It is, 

again, the custom of this Subcommittee to swear in our witnesses, 

and I would ask both of you to please stand and raise your right 

hand. 

Do you swear that the testimony you are about to give this Subcommittee is the truth, the whole truth, and nothing but the truth, 

so help you, God? 

Mr. DUVALL. I do. 

Mr. SALISBURY. I do. 

Senator AKAKA. Thank you very much. Let the record note that 

our witnesses responded in the affirmative. 

Before we start, I want you to know that your full written statement will be made part of the record. 

Mr. Duvall, will you please proceed with your statement? 

TESTIMONY OF ROBERT F. DUVALL,1 PRESIDENT AND CEO, 

COUNCIL FOR ECONOMIC EDUCATION 

Mr. DUVALL. Yes, sir. Thank you, Chairman Akaka, for an opportunity to be a part of this very important and timely discussion. 

You were good enough to invite me 2 years ago to also give testimony. I think we are making some progress on this important 

issue. I know that I am 2 years older and closer to retirement and 

feel a little poorer than I did 2 years ago. But I think that feeling 

underscores the importance of continuing to press on the front of 

improving financial education and financial literacy in this country. 

It is especially fitting for the Subcommittee to hold this hearing 

during Financial Literacy Month. As a member of the President’s 

Advisory Council on Financial Literacy and as the President and 

Chief Executive of the Council for Economic Education, and even 

more, as a parent, as an educator, and as a citizen, I commend you 

for focusing on this issue, this literacy. There are few matters 

which more directly address the traditional American virtues and 

values of self-reliance, individual responsibility, and good citizenship. 

The Council for Economic Education is a founding, and active, 

member of the Jump$tart Coalition for advocacy for financial literacy, and we are a principal participant and partner in Financial 

Literacy Day on Capitol Hill tomorrow, April 30. We are particularly grateful to you, Senator, for being the initiator of Financial 

Literacy Day on the Hill, which has grown tremendously in significance over the past 7 years, as awareness of the importance of the 

issue has grown. 

For 60 years, as an independent, not-for-profit organization, the 

Council for Economic Education, formerly the National Council, the 

NCEE, has been a leader in transforming economic and financial 

27 

education by developing standards-setting and measurably effective 

programs nationwide and, in recent years, internationally as well— 

programs which promote the teaching of the very real connections 

between economic and financial literacy and the free flow of ideas, 

capital, and innovation that will keep this Nation competitive in 

the global economy. 

We are philosophically committed to a robust and vibrant economic marketplace, and our unit of change is the K–12 teacher, 

who has the potential, over the course of a career, to touch the 

lives of thousands of students. 

But what are educators actually teaching and how are they 

teaching it? Are they preparing students adequately for the economy of the future? It is often said that today’s education curriculum is rooted in yesterday’s economy, and that a rapidly changing and technologically driven marketplace requires new educational approaches. The skill set that today’s young people will 

need to possess in order to succeed as adults is likely to be different than that of a generation ago, and this skill set must enable 

students to think economically and entrepreneurially, in response 

to the opportunities and threats they will encounter as adults. The 

degree to which they will succeed in this endeavor will shape not 

only their futures and their fortunes, but the level of competitiveness and dynamism of the American economy. 

There has never been, I believe, a better ‘‘teachable moment’’ 

than the current economic and financial crisis to spur awareness 

and support for economic and financial education and improving it. 

But real improvements in the quality and effectiveness of teaching 

and increases in the level of economic and financial literacy will 

take time, political will, and resources. 

What can be done? The Federal Government is playing a critical 

role in providing resources for these efforts particularly through 

the Excellence in Economic Education (EEE) Act, which came 

about through legislation which you authored, Senator, as you assembled a bipartisan group to support this effort to get into the 

grass roots and improve financial literacy. 

It ought to be more fully funded, however, and I hope renewed 

as we go forward. Why? Because it works. 

It works because it is a grass-roots program, and fosters local, 

hands-on initiatives. It works because it is focused on what needs 

to be done to make a difference in and through education: Teacher 

training, development of materials, active learning for K–12 students, and research into what works, and why. And it is a proven 

way to make a thousand flowers bloom through the ‘‘multiplier effect’’ of disseminating best practices. 

Well-prepared teachers instill in children a sense that they are 

themselves future stakeholders and decision makers and movers in 

the American economy. And through the EEE Act, over the past 5 

years, 48 States, and the District of Columbia have been served by 

the EEE sub-grants in project years 2004 to 2008. Four hundred 

and ninety-five sub-grants were awarded in that time frame, and 

over $5.5 million has been awarded to grass-roots organizations nationwide. In addition, over 1,500 copies of the 2000 survey of the 

States have been distributed to individuals and agencies interested 

in improving economic and financial literacy in their own commuVerDate Nov 24 2008 13:43 Feb 25, 2010 Jkt 051021 PO 00000 Frm 00031 Fmt 6633 Sfmt 6633 P:\DOCS\51021.TXT SAFFAIRS PsN: PAT
28 

1The prepared statement of Mr. Salisbury with attachments appears in the Appendix on page 

102. 

nities. And, finally, we have been able through the EEE to distribute Virtual Economics, a tremendous tool for teachers where 

they can find the standards and requirements of their States, and 

lesson plans. This tool, this instrument, Virtual Economics, has 

now been made available in every school district in the United 

States, and that is thanks to the EEE. 

So, in conclusion, what can Congress do? I think they can continue, as I hope, to support this kind of initiative which makes a 

real difference where it counts. We are encouraged by the Congress’ 

increased focus on economic and financial education issues over the 

last several years. One year ago at this time, I was called to give 

testimony to the House Financial Services Committee. At the end 

of that testimony, Committee Chairman Barney Frank leaned over 

the podium and asked the panel to say what they would recommend that the Federal Government do about the subprime mortgage lending crisis—the tip of the iceberg that was then being seen. 

I responded that I did not know but that I did believe passionately 

that the Federal Government ought to invest in a nationwide professional development program for teachers in the Nation’s schools 

to improve economic and financial education. 

The EEE is such an investment, but the investment, while measurably good and effective, is still too small. The economic turmoil 

and financial crisis we are experiencing can be a teachable moment, but only if we make it so. Consequently, I would urge that 

we maintain and, indeed, increase funding for the EEE as well as 

reauthorize this needed program as part of the Elementary and 

Secondary Education Act. 

Thank you again for inviting me to testify today, and I will be 

happy to answer any questions. 

Senator AKAKA. Thank you very much, Mr. Duvall. Now we will 

hear from Dallas Salisbury. 

TESTIMONY OF DALLAS L. SALISBURY,1 PRESIDENT AND CEO, 

EMPLOYEE BENEFIT RESEARCH INSTITUTE, AND CHAIRMAN, AMERICAN SAVINGS EDUCATION COUNCIL 

Mr. SALISBURY. Mr. Chairman, thank you. It is a pleasure to be 

here. It is the Employee Benefit Research Institute (EBRI) that I 

have had the pleasure of being with since its founding in 1978. 

EBRI has worked on financial education since that time, including 

work with the full Committee of which this is a Subcommittee, and 

conducting a number of forums and hearings in the early 1980s 

that led to the creation of the TSP, and work with OPM on the implementation of that program and with the TSP in developing the 

early financial education related to Federal employees. 

In 1995, we were approached by the Treasury Secretary and the 

Labor Secretary concerning what became an effort by 30 Federal 

agencies and 250 private-sector for-profit and nonprofit organizations, in July 1995, under the title ‘‘Save: Your Retirement Clock 

Is Ticking.’’ And that program led in the Clinton Administration to 

the creation of initiatives by then-Treasury Secretary Robert Rubin 

and ultimately chaired and run by Deputy Secretary, then TreasVerDate Nov 24 2008 13:43 Feb 25, 2010 Jkt 051021 PO 00000 Frm 00032 Fmt 6633 Sfmt 6633 P:\DOCS\51021.TXT SAFFAIRS PsN: PAT
29 

ury Secretary Lawrence Summers. These initiatives incorporated 

actions leading to congressional enactment of the SAVER Act and 

led to three White House and congressional summits on retirement 

savings. 

We have attempted through the American Savings Education 

Council (ASEC) since 1975 to keep those public and private coalitions going as well as to encourage the broadest range of Federal 

agencies to coordinate and accentuate their activities. We have 

backed that up with research, just recently having released the 

19th Annual Retirement Confidence Survey, which attempts to 

keep an ongoing measure of financial preparation and financial 

preparedness, including how people are doing in those realms. 

We have also done Youth and Money surveys, and Parents, 

Youth, and Money surveys through ASEC as well as a recent survey looking at Gen X’s and Gen Y’s financial literacy, all of which 

underlines the exceeding importance of education beginning at the 

K–12 level, and in the long term, the importance of educating parents. 

You pointed out what your father taught you. Luckily, my father 

taught me the same thing. And what we found from the Parents, 

Youth, and Money survey and the Youth and Money survey is that 

kids primarily get their financial education by watching their parents in action. And when you listen to their findings on what that 

means, it is truly scary. 

The ASEC effort with the government Interagency Group, which 

began in 1996, has served a purpose similar to the one that was 

created by your Financial Literacy Education Commission, but generally at the career service level as opposed to the political level. 

And in the most recent case, as well as in prior Administration 

changes, it has served as a useful link over the course of those 

changes to keep agencies communicating during transitions. We 

are pleased to continue those activities. 

We are also pleased to work and to donate the time to the Office 

of Personnel Management and to the TSP, which for many years 

have used what was our Ballpark Estimate worksheet and now is 

the Federal version of that worksheet. 

Our Choose to Save program was initiated by means of national 

media and public service announcements. Through that program, 

we are pleased to provide the MyMoney.gov promotional public 

service announcement that has been distributed to stations around 

the United States and to work with the Office of Personnel Management and the Defense Department, which show the Choose to 

Save public education segments in public service announcements 

across the globe. 

You asked specifically, in addition, for comment on the Financial 

Literacy and Education Commission (FLEC) and the reports that 

it has issued and the activities it has undertaken. I have put in my 

full statement a number of specific suggestions and recommendations, but my first suggestion would be clarity on what FLEC is 

primarily intended to do relative to the Federal agencies. Is it primarily to coordinate and leverage activity or to develop programs 

and to attempt to implement them? 

As the GAO report indicates, there are strengths and weaknesses, and I would just emphasize that FLEC has had, I would 

30 

argue, in their report some confusion between these efforts. The 

statutory language makes it appropriate for them to coordinate; it 

really does not make it possible for them to direct. And that you 

may or may not wish to do, but it is an uncertainty point. 

In conclusion, I want to underline the importance of your activities, the activities of this Subcommittee, the legislation that you 

have enacted, and the concept of coordination. But I will note in 

closing that I testified at the same hearing as Mr. Duvall, and another final question was asked by the Chairman at that time: If 

there is only one thing that people at this Subcommittee would recommend, would it or might it be that we mandate the teaching of 

financial literacy in K–12? Mandate rather than have it be voluntary. And every witness at the panel said that if one thing could 

be done that would serve to increase financial literacy and to increase the value of every dollar spent most, every witness said that 

would be the one thing. 

In our survey on Youth and Money, we have found—and surveys 

and annual work by Mr. Duvall’s organization document—that over 

78 percent of high school students in this country have financial 

education courses available to them, but most require the individual to choose to take them. Our survey indicates that 8.1 percent choose to take them out of the 78 percent who could. That, in 

one fell swoop, it is not the absence of opportunity. It is the absence of taking it up. If I might suggest, in all due respect, it is 

characteristic of children not to take your good advice in spite of 

the fact that you and I took the good advice of our fathers. Every 

now and then one must force people to learn, and the easiest time 

to do that is when they are young and impressionable and in 

school. 

I did enjoy the last panel, and made note of the power of the 

military to require individuals to do these things, to learn, and to 

be tested. Most employers, including myself as an employer, do not 

have that luxury. And so the one area where Congress might act, 

and the Secretary of Education might act, and the President might 

act would be to assure that in K–12 people at least get the basics. 

Thank you, sir. 

Senator AKAKA. Thank you very much, Mr. Salisbury. 

Mr. Duvall, I understand that for 60 years, the Council for Economic Education (CEE) has been working on efforts to improve economic and financial literacy in our schools. I want to take this opportunity to extend my personal thanks for your hard work and 

dedication to this issue which is so personally important to me. 

What do you believe are the greatest challenges in ensuring that 

all young people have the information they need to make sound financial decisions? 

Mr. DUVALL. Well, I would agree, Senator, very much with my 

colleague Mr. Salisbury’s closing statement that we need to mandate that there be this experience with the basics of applied and 

practical economics and personal financial decision making skills 

for all students while they are in school. 

What does work now about financial literacy? We know it is not 

something we are born with. It is learned behavior. And the best 

place to learn it is while we are in school through well-prepared 

teachers, and that includes parents as teachers, as has been said. 

31 

But I think it is very important, with any kind of discussion 

about a mandate for it being offered and taken in the schools, that 

there be a deliberate program to prepare teachers, because certainly one of the major challenges in going forward is that many 

school teachers have not themselves had basic economics or personal finance in their own preparation for being teachers. Most of 

our work in the council is concerned with teaching the teachers 

who are already in the field. But that needs to be improved, and 

I think also a strategy ought to be developed to get it into the 

schools of education for teachers before they become teachers. 

Senator AKAKA. Mr. Duvall, the Commission, in its National 

Strategy Report, listed a number of populations that need to be focused on, such as the unbanked, multicultural and multilingual 

populations, and students from grades K–12. What could the Commission do to reach these populations? 

Mr. DUVALL. I am not certain, sir, what the Commission itself 

could do. Perhaps continue to serve in the advocacy role for this 

being done. But I think it is most effectively done by organizations 

like my own that are doing it. That is why we have felt so empowered through being chosen by the U.S. Department of Education to 

administer the Excellence in Economic Education Act. This has enabled us to reach toward underserved communities and populations 

that we were not able to get to before by making these sub-grants 

to grass-roots organizations that are trying to do something innovative to improve economic and financial literacy and where this comparatively small amount of help can make a great deal of difference. 

I think the Commission should and could continue at least to 

serve in that push role, but the delivery, I think, is going to depend 

on people in the field who are already out there and can do more. 

Senator AKAKA. Mr. Salisbury, GAO indicated that the Financial 

Literacy and Education Commission could increase its effectiveness 

and success by improving its internal coordination between member agencies. In your testimony, America Saves Week is described 

as a program that joins together employers, financial institutions, 

government organizations, nonprofit networks, and other organizations to accomplish the week’s goals. 

What are the coordination tools and strategies that have allowed 

the America Saves Week to be successful? 

Mr. SALISBURY. Well, Senator, a major part of America Saves 

Week is Military Saves, which was promoted around the Nation 

and the world. Involved in America Saves Week were numerous 

Federal agencies and programs and the Office of Personnel Management. Integrally involved are the offices of the Agriculture Department and the Extension Service in communities all over the 

United States. 

America Saves Week has, during the last 2 years, been jointly coordinated by the American Savings Education Council and the Consumer Federation of America, using all of the public and private 

partners within the ASEC Partnership, which does include the offices of the Treasury Department. The staff of FLEC has been involved in these activities. It is essentially focusing on getting that 

very broad net and all of these organizations working together. 

32 

ASEC itself has focused just for that reason on not creating and 

doing programs of its own, but largely attempting simply to focus 

on helping with the broadest range of organizations, bringing them 

together and helping to leverage everything that all of those other 

organizations are doing. 

If I were to take the options in the GAO report, and even what 

I stressed, my humble opinion would be that FLEC itself would be 

most effective if it essentially focused on, I would say, literally no 

public profile. Instead of its meetings being big media events with 

cabinet secretaries giving speeches, I suggest a working committee, 

with individuals at the levels of those at this panel and the earlier 

panel, meeting far more frequently and essentially assuring at the 

political level a commonality of purpose and direction and then 

driving that down through their agencies into their budgets and in 

work with Capitol Hill. I also suggest this effort be almost purposefully internal as opposed to having what has been a more external 

focus and presence. And, again, I say that in hindsight, because I 

probably would not have told you that if I had been asked before 

you enacted it. But in terms of what I think has allowed ASEC to 

be successful and then watching what FLEC has and has not done, 

that would be my suggestion to you, vis-a`-vis the GAO report, as 

to how it could most effectively drive governmental action. And in 

that sense, it would be in no way viewed by anyone as competitive. 

It would be a cooperative, coordinating force aiming at getting the 

most out of each of the agencies. 

Senator AKAKA. Well, I really appreciate your responses. I would 

like to thank both of you for being here today. You have helped us 

to further understand the challenges that continue to face the Financial Literacy and Education Commission. You have also shared 

with us some examples of financial literacy programs that help people. 

It is important that we continue to educate, protect, and empower consumers. I plan to work closely with all of you to improve 

Federal financial literacy efforts. I think we have set some things 

in motion. The month of April, of course, is Financial Literacy 

Month, and I appreciate your continuing efforts to improve financial literacy. 

Again, I look forward to continuing to work with you. We have 

received many good recommendations that we can work on to further the cause. 

This hearing record will be open for one week for additional 

statements or questions other Members may have, and, again, 

thank you so much for your engagement here. 

This hearing is adjourned. 

[Whereupon, at 4:27 p.m., the Subcommittee was adjourned.] 

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