FDIC: Press Releases - PR-251-2010 11/15/2010

http://www.fdic.gov/news/news/press/2010/pr10251.html[2/11/2011 1:16:09 PM]

Press Releases

Joint Release

United States Department of Education

Federal Deposit Insurance Corporation

National Credit Union Administration

For Immediate Release November 15, 2010

FDIC and NCUA Chairs Join Education Secretary to

Announce Partnership to Promote Financial Education

and Savings Programs

Officials challenge financial institutions, schools, federal grantees, and

stakeholders to work together to help students and families save for college,

develop smart money habits

U.S. Secretary of Education Arne Duncan, Federal Deposit Insurance Corporation

(FDIC) Chairman Sheila C. Bair, and National Credit Union Administration (NCUA)

Chairman Debbie Matz joined together today in signing a new agreement that aims

to help millions of students get on the path to financial success. The agencies will

work together to facilitate partnerships among schools, financial institutions, federal

grantees and other stakeholders to provide effective financial education; increase

access to safe, affordable and appropriate accounts at federally insured banks and

credit unions, and encourage saving. The potential for impact is great. For example,

the agreement allows the FDIC and NCUA to support the US Department of

Education's 1,700 college access grantees, which engage over one million lowincome K-12 students striving for higher education.

Duncan, Bair and Matz spoke with high school students at the student-run credit

union branch at T.C. Williams High School in Alexandria, Va., before announcing the

agreement to an audience that included bank and credit union executives; assetbuilding experts; educators and parents; state policy makers; and students from the

Academy of Finance at T.C. Williams.

"A lack of financial literacy is a major roadblock on the path to college access and

success for too many students and families," said U.S. Secretary of Education Arne

Duncan. "We know that students who save for college are more likely to go.

Teaching students how to make smart decisions about money from an early age –

and giving them and their parents the right tools and incentives to save for financial

goals, including higher education – and will help them build strong financial futures

and will help us reach the president's 2020 college completion goal. I applaud the

cities, schools and financial institutions that are already working together on this, and

I encourage others to take on this challenge."

NCUA Chairman Debbie Matz said, "There is no better place for young people to

learn these concepts than from their teachers at school, and no better partner to

provide subject matter expertise for schools than financial institutions. In many

underserved communities, studies show that parents learn about finances from their

children, so youth financial education can benefit adults as well. We look forward to

working with Education and FDIC on these shared goals."

FDIC Chairman Sheila Bair added, "Teaching young people how to responsibly

handle their finances and use mainstream banking products isn't a luxury in today's

economy – it is essential. Even though banking services and products evolve,

consumers will always need to know the fundamentals, such as the importance of

saving for a rainy day, the meaning of 'APR,' and deposit insurance. That is why this

partnership between the nation's deposit insurers and the Education Department

makes so much sense."
FDIC: Press Releases - PR-251-2010 11/15/2010

http://www.fdic.gov/news/news/press/2010/pr10251.html[2/11/2011 1:16:09 PM]

All three agencies will also work together to increase participation in the National

Financial Capability Challenge, a voluntary awards program designed to challenge

educators to teach high school students the basics of personal finance, and reward

success.

The need for youth financial education, financial access and saving are well

documented. The FDIC's research indicates that younger adults are less likely to

have access to an account at a Federally-insured bank or credit union and more

likely to incur sizable fees, while the National Financial Capability Study conducted

by the FINRA Foundation and supported by Treasury found that younger adults

struggle with basic personal finance concepts and overestimate their ability to

perform simple financial calculations. At the same time, research from the Center for

Social Development at Washington University in St. Louis suggests that students

with a college savings account are much more likely to attend college, even while

controlling for other factors.

Attachment:

Fact Sheet - PDF (PDF Help)

(FDIC: PR-251-2010)

###

Media Contacts:

U.S. Dept. of

Education

Sandra Abrevaya

or Elaine

Quesinberry

(202) 401-1576 or

press@ed.gov

FDIC David Barr (202) 898-6992

NCUA Cherie Umbel (703) 518-6330
1

Fact Sheet 

U.S. Department Of Education, FDIC, and NCUA 

Financial Access and Financial Education Collaboration Agreement 

Background

The Agreement signed November 15, 2010, establishes a new federal partnership to encourage 

schools, financial institutions, federal grantees, and other stakeholders to work together to increase 

financial literacy, access to federally-insured deposit accounts, and savings among students and 

families across the country, with an emphasis on low- and moderate-income students and families. 

The need for collaboration is well-documented. For example, the 2009 Financial Capability Survey 

documented that a majority of Americans do not have a "rainy day" fund, are not adequately 

preparing for their children's college education and their own retirement, and had not ordered a copy 

of their free credit report in the previous 12 months. In addition, a 2009 National Household Survey 

by the FDIC showed that more than one quarter of all households are “unbanked” or “underbanked” 

and that those households are disproportionately low-income and/or minority. 

Research also demonstrates that the more people know about credit and banking services, the more 

likely they are to develop a plan to manage their money, save for future needs and goals, use credit 

responsibly, and comparison-shop. The Washington University in St. Louis found that students with 

a college savings account are up to seven times more likely to enroll in college. 

The agencies agree on the importance of providing effective financial education and helping 

students and families develop positive financial behaviors, such as saving for postsecondary 

education or training, avoiding excessive debt, and budgeting. The agencies also agree on the 

importance of increasing access to safe, affordable, and convenient deposit accounts to encourage 

savings and limit fees paid for basic financial products and services, such as by expanding the 

number of initiatives around the country to increase financial access and encourage savings. 

Highlights of the agreement

 Education will notify its 1,700 GEAR UP and TRIO grantees working with over one million 

middle school and high school students of the opportunity to receive technical assistance 

from FDIC and NCUA on developing, implementing, or enhancing their financial access 

and financial education programs. The three agencies will help schools and Education 

grantees identify promising practices for establishing partnerships with financial institutions 

and encouraging savings. 

 Education and FDIC will collaborate on identifying strategies and opportunities to enhance 

the capacity of educators to effectively deliver financial education in the classroom and 

ensuring FDIC’s Money Smart instructional materials provide timely and accurate 

information on options to pay for a college education, including federal student financial 

assistance. 

 FDIC, NCUA, and Education will inform high school teachers and stakeholders about the 

National Financial Capability Challenge to increase participation of high school students 

across the country. 
2

 NCUA will consider making loans and grants from its Community Development Revolving 

Loan Fund to qualifying credit unions that partner with public schools or Education grantees 

to provide low- and moderate-income students with access to safe, affordable, and 

convenient savings accounts and to increase the financial literacy of low- and moderateincome students and families. 

 NCUA will consider making insured credit unions aware of the Money Smart program and 

opportunities to use it as a foundation for their financial education initiatives. 

 Education, FDIC, and NCUA will identify opportunities to set benchmarks and track the 

successes of this collaboration, with respect to financial literacy, financial access, and 

savings. 

Contacts 

Agency Program Area Press 

Dept. of 

Education 

Phil Martin, (202) 260-2831 or 

phil.martin@ed.gov Sandra Abrevaya, (202) 401-1576

FDIC Luke W. Reynolds, (202) 898-6724 or 

lureynolds@fdic.gov David Barr, (202) 898-6992

NCUA Moisette I. Green, (703) 518-1140 or 

mgreen@ncua.gov Cherie Umbel, (703) 518-6330