Feature Article: 

Banking on Financial Education 

The financial services marketplace has changed 

profoundly in recent decades. Only a generation ago, 

most individuals used their local banks to open checking and savings accounts, and perhaps turned to those 

institutions for home mortgages. Deregulation of interest rates combined with technological and marketplace 

innovations have vastly expanded the types of financial services and improved access to credit for many 

consumers, a process sometimes referred to as the 

“democratization” of credit. Transactions increasingly 

occur outside bank branches; electronic payments are 

taking the place of cash and checks; and financial 

products are being developed to meet the needs of 

many different sectors of the economy. 

As the financial landscape continues to become more 

complex, even the savviest consumers may find it 

difficult to navigate the rapidly expanding choices of 

financial services, providers, and delivery channels. 

Individuals with little or no experience with traditional 

banking services are likely to find it even more challenging. In today’s environment, financial education 

takes on added importance, as it provides consumers 

with the tools to make sound financial decisions. 

Among other things, financial education gives 

consumers knowledge about budgeting, saving and 

investing, choosing credit products, and protecting 

themselves against fraud. Financial education also 

benefits the broader economy by making citizens more 

financially stable. Over the long term, this enhanced 

financial stability can improve the economic outlook 

for an entire community and can create new opportunities for businesses, including banks. 

This article highlights the results of an FDIC study 

of the effectiveness of the Money Smart financial 

education program. The study indicates that financial 

education programs can positively affect consumers’ 

money management attitudes and behaviors. The 

article discusses who may benefit the most from such 

financial education courses and why. Of importance to 

bankers, the study also shows that financial education 

strengthens consumers’ relationships with banks and 

can improve their financial condition and outlook. 

Finally, the article describes some of the many ways 

banks are offering financial education to their 

customers and offers suggestions for banks as they try 

to enhance their education programs. 

Financial Education Improves Consumer Attitudes, 

Behaviors, and Financial Outlook 

One measure of the success of financial education is 

the extent to which it produces positive changes in 

attitudes and behaviors. A new study by the FDIC of 

its Money Smart financial education curriculum shows 

that financial education does change attitudes and 

behaviors and can result in enhanced financial literacy 

and improved creditworthiness.1 In addition, consumers 

who complete financial education programs may then 

establish relationships with the formal banking sector. 

(See “The FDIC’s Money Smart Curriculum” on page 40 

for a description of the Money Smart program.) 

The study, which the FDIC conducted in cooperation 

with NeighborWorks America®, gathered data from 

Money Smart participants nationwide about their 

knowledge, confidence, and behaviors regarding money 

management.2 The study looked at the results of three 

surveys: one, conducted before the course, collected 

baseline data; a post-training survey gathered data to 

determine changes in participants’ financial behavior 

and confidence; and a follow-up survey of 631 graduates six to twelve months after completing the training 

identified actual changes in financial practices and 

confidence.3 Table 1 shows the demographics of 

survey respondents. 

1 Federal Deposit Insurance Corporation, A Longitudinal Evaluation of 

the Intermediate-term Impact of the Money Smart Financial Education Curriculum Upon Consumers’ Behavior and Confidence (Washington, D.C.: FDIC, April 2007). The Gallup Organization was engaged 

to assist with the development of the survey questions and administer 

the survey. 2 The Money Smart curriculum has been offered to high school- and 

college-age students. However, the current version was developed 

for adults, and therefore, the study targeted adults. 

3 The pre- and post-training surveys were conducted with classes 

starting in November 2004 and ending by September 30, 2005. Gallup 

interviews for the follow-up survey began in February 2006 and ended 

in April 2006. 

FDIC QUARTERLY 33 2007, VOLUME 1, NO. 2 
Table 1 Chart 1 

Demographics of Individuals 

Enrolled in Money Smart Courses 

Tend to Correlate with Minority and 

Low- and Moderate-Income Markets 

Number of Percent of 

Characteristic Respondents Respondents* 

Age 

Under 25 years 85 13% 

25–35 years 188 30% 

35–44 years 186 30% 

45–54 years 118 19% 

55 years or older 53 8% 

Unknown 1 0% 

Total 631 100% 

Race/Ethnicity 

White 163 26% 

African American 290 46% 

Asian 22 4% 

Latino 122 19% 

Other 28 4% 

Unknown 6 1% 

Total 631 100% 

Education 

Less than high school 79 13% 

High school 162 26% 

Some college or trade 266 42% 

College 78 12% 

Postgraduate work 45 7% 

Unknown 1 0% 

Total 631 100% 

Annual Income 

Under $10,000 133 21% 

$10,000–$19,000 170 27% 

$20,000–$35,000 175 28% 

$35,000 or over 118 19% 

Unknown 35 5% 

Total 631 100% 

Source: FDIC, A Longitudinal Evaluation of the Intermediate-term Impact of the Money Smart 

Financial Education Curriculum Upon Consumers’ Behavior and Confidence (Washington, D.C., 

April 2007). 

* Percentages may not add to 100 due to rounding. 

The results of this study show that Money Smart graduates gained confidence about their basic money 

management skills (see Chart 1). For example, about 

91 percent of respondents in the follow-up survey 

reported “I am in control of my money,” compared with 

69 percent in the pre-training survey. 

Money Smart Graduates Report 

Feeling More Comfortable and Confident 

about Their Personal Finances 

Pre-Training Post-Training Follow-up 

I am comfortable 

doing business with a 

bank or credit union. 

I understand the 

way I spend my 

money enough to 

make a budget. 

I have financial 

goals that I am 

working toward. 

I am in control 

of my money. 

0% 20% 40% 60% 80% 100% 

Percent of Respondents Who Agree With Each Statement 

Source: FDIC, A Longitudinal Evaluation of the Intermediate-term Impact of the Money 

Smart Financial Education Curriculum Upon Consumers' Behavior and Confidence 

(Washington, D.C., April 2007). 

Although these positive perceptions are important, the 

survey also shows that the knowledge gained through 

the Money Smart program translates into positive 

consumer actions. For example, 22 percent of graduates 

who already had a checking account opened a checking 

account at a different financial institution by the time 

the follow-up survey was conducted, and 13 percent 

opened a different type of account at the same institution, which evidences the ability to shop for financial 

services. Also, immediately after completing the course, 

69 percent of graduates reported an increase in their 

savings (see Chart 2).4 

The results of the survey also show that financial 

education can spur some consumers to establish or 

strengthen relationships with financial institutions. For 

example, after completing the Money Smart program: 

• 43 percent of graduates without a checking account 

opened a checking account. 

• 37 percent of graduates without a savings account 

opened a savings account. 

4 Although these results are positive, they are subjective and should 

be interpreted carefully. Respondents’ savings balances were not 

monitored, and it is possible that the responses indicated heightened 

awareness of the “correct” response because of exposure to the 

Money Smart curriculum. 

FDIC QUARTERLY 34 2007, VOLUME 1, NO. 2 
Banking on Financial Education 

Chart 2 

Most Money Smart Graduates Report 

Increased Personal Savings 

Percent of respondents reporting 

changes in their level of saving 

Decreased 

3 percent 

Increased 

69 percent 

Stayed the same 

28 percent 

Source: FDIC, A Longitudinal Evaluation of the Intermediate-term Impact of the Money 

Smart Financial Education Curriculum Upon Consumers' Behavior and Confidence 

(Washington, D.C., April 2007). 

Chart 3 

Most Money Smart Graduates Report 

Decreased Debt Levels 

Percent of respondents reporting 

changes in their level of debt 

Increased 

12 percent 

Decreased 

S 53 percent tayed the same 

35 percent 

Source: FDIC, A Longitudinal Evaluation of the Intermediate-term Impact of the Money 

Smart Financial Education Curriculum Upon Consumers' Behavior and Confidence 

(Washington, D.C., April 2007). 

• 28 percent of graduates with checking accounts and 

22 percent with savings accounts at the end of the 

course began using direct deposit for the first time. 

Financial education also can improve the financial 

condition of consumers. More than half (53 percent) 

of the graduates reported that their overall debt level 

declined at the conclusion of the course (see Chart 3). 

Bill payment patterns of Money Smart graduates also 

exhibited positive changes. As shown in Chart 4, 

55 percent of respondents indicated they “always” 

paid bills, rent, and other expenses on time, up from 

43 percent before taking the course. In contrast, the 

percentage of respondents stating they “sometimes” or 

“never” pay bills on time fell from 15 percent before 

the course to 8 percent in the follow-up. Credit card 

payment practices also improved, as more graduates 

indicated that they usually pay the full credit card 

balance, and fewer indicated they pay no more than 

the minimum (see Chart 5). In fact, the share of 

respondents indicating that they usually pay no more 

than the minimum declined by one-half, from 

17 percent to 8 percent. 

Who Needs Financial Education? 

Evolution in the financial marketplace and changes in 

personal financial circumstances suggest that virtually 

all consumers could benefit from financial education at 

some point. For example, a first-time homebuyer may 

need homeownership advice and mortgage counseling. 

Older consumers may need information on annuities 

and other investment options as they transition to 

retirement, and small-business owners may benefit from 

educational programs that discuss how to handle credit 

or budget for their new ventures. 

Although virtually all consumers can benefit from some 

type of financial education, those who have little or no 

interaction with mainstream financial institutions can 

perhaps benefit the most. Individuals may fall outside 

the financial mainstream for a number of reasons. 

However, they generally fall into one of three categories: students, immigrants, and low- and moderateincome individuals. 

Students: This group includes school-age children, or 

even young adult college students, who have not had 

the need or opportunity to engage in banking transacFDIC QUARTERLY 35 2007, VOLUME 1, NO. 2 
Chart 4 Chart 5 

Most Money Smart Graduates 

Improved the Timeliness 

of Bill Payments 

Percent of 

Respondents 

Pre-training 60% 

50% 

40% 

30% 

20% 

10% 

0% 

Follow-up 

Always pay Usually pay Sometimes Almost never 

on time on time pay on time pay on time 

Source: FDIC, A Longitudinal Evaluation of the Intermediate-term Impact of the Money 

Smart Financial Education Curriculum Upon Consumers' Behavior and Confidence 

(Washington, D.C., April 2007). 

tions, or have had limited experience with banks. 

According to the U.S. Census Bureau, individuals 

age 25 and under represented more than one-third 

(34 percent) of the overall population as of 2005. 

Offering this group the opportunity to learn the basics 

of budgeting, saving and investing, and using credit 

wisely may be the best way to help them develop good 

financial habits for a lifetime. 

However, it appears that more work needs to be done 

in this area. Only seven states include a personal 

finance course as a high school graduation requirement.5 According to the most recent results of a survey 

by the Jump$tart Coalition for Personal Financial 

Literacy, financial literacy scores among high school 

seniors are quite low. In 2006, 62 percent of students 

failed (defined as a score below 60 percent) the Coalition’s personal finance examination.6 Additionally, 

data from a recent survey of 13,000 college students 

show that young adults’ initial experiences with 

consumer credit are already leading to heavy debt 

burdens.7 More than half these students accumulated 

5 National Council on Education, “Survey of the States: Economic and 

Personal Finance Education in Our Nation’s Schools, A Report Card” 

(New York, NY, June 13, 2007). The states are Georgia, Idaho, Illinois, 

Louisiana, Missouri, South Dakota, and Utah. 

6 Jump$tart Coalition, Financial Literacy: Improving Education. 2006 

Jump$tart Coalition Survey (Washington, D.C., 2006). 7 “Sallie Mae launches new ‘Be Debt Smart’ campaign to educate 

students, parents and graduates on managing debt and understanding credit,” Sallie Mae news release, February 14, 2007, http://www 

.salliemae.com/about/news_info/newsreleases/021407_ 

bedebtsmart.htm. 

Money Smart Graduates Reported That 

They Were More Likely to Pay Off 

Their Entire Credit Card Balance Each Month 

Percent of 

Respondents 

Pre-training 

70% 

60% 

50% 

40% 

30% 

20% 

10% 

0% 

Follow-up 

Pay the full Pay more than Pay the Pay less than 

balance the minimum minimum the minimum 

Source: FDIC, A Longitudinal Evaluation of the Intermediate-term Impact of the Money 

Smart Financial Education Curriculum Upon Consumers' Behavior and Confidence 

(Washington, D.C., April 2007). 

more than $5,000 in credit card debt while in college, 

and one-third accumulated more than $10,000.8 Fewer 

than one in five (19 percent) said they did not take on 

any credit card debt while in college. 9 

Immigrants: Immigrants and their American-born 

offspring accounted for 55 percent of the increase in 

the U.S. population during the past 40 years. Latinos 

and their offspring were by far the largest subset of 

immigrants, and this trend is expected to continue.10 

Projections indicate that by 2011, nearly one of every 

six people living in the United States will be of Latino 

origin, and Latinos will make up 9.5 percent of all 

buying power in this country, up from 5 percent 

in 1990.11 

Obstacles may constrain the ability of immigrants to 

participate in the financial marketplace. Some immigrants may be so new to the country that they have not 

conducted sizable financial transactions. Cultural or 

language barriers may discourage others from developing 

a relationship with a financial institution. For example, 

immigrants from countries with unstable banking 

systems may be wary of dealing with financial institutions in the United States. Other immigrants, like many 

8 Ibid. 

9 Ibid. 

10 Pew Hispanic Center, From 200 Million to 300 Million: The Numbers 

Behind Population Growth (Washington, D.C., October 10, 2006). 11 Selig Center for Economic Growth, “The Multicultural Economy 

2006,” Georgia Business and Economic Conditions, Third Quarter 

2006, Volume 66, Number 3. 

FDIC QUARTERLY 36 2007, VOLUME 1, NO. 2 
Banking on Financial Education 

native-born Americans, are low- and moderate-income 

wage earners whose expenses generally leave little room 

to acquire and build financial assets. 

Low- and Moderate-Income Households: These 

households earn less than 80 percent of the median 

household income for their particular geographic area, 

according to U.S. Census Bureau data. Many low- and 

moderate-income households routinely conduct financial transactions with banks and other financial institutions. However, research shows that low- and 

moderate-income individuals are more likely to have 

limited interactions with mainstream financial institutions such as banks. 

For example, a study by the Center for Financial 

Services Innovation (CFSI) indicates that about 

30 percent of low- and moderate-income households 

are “unbanked,” meaning they do not have any relationships with banks.12 This is more than three times 

the unbanked rate for the general population—about 

9 percent.13 The CFSI study also shows that, of the 

70 percent of low- and moderate-income households 

with bank accounts, almost two-thirds may be considered “underbanked,” meaning they use only limited 

banking services.14 

These customers are considered low- and moderateincome, but they do conduct a large volume of financial transactions. For example, during the period of 

the survey (2003–2004), the CFSI estimates that the 

1 million low- and moderate-income households represented by its survey bought 1.2 million money orders 

and cashed 1.9 million checks per month.15 Also, people 

earning less than $25,000 a year held assets totaling 

$175 billion in aggregate;16 57 percent of households 

in the lowest income quintile found a way to save some 

money; and almost one-fifth save regularly.17 

12 Ellen Seidman, Moez Hababou, and Jennifer Kramer, Getting to 

Know Underbanked Consumers, A Financial Services Analysis 

(Chicago, Illinois: The Center for Financial Services Innovation, 

September 2005). This survey represented almost 1 million households in 63 low- and moderate-income tracts in Washington, D.C., 

Chicago, and Los Angeles. 

13 Federal Reserve, 2004 Survey of Consumer Finances (Washington, 

D.C., 2004). 

14 Seidman et al. 

15 Ibid. 

16 Steven Davidson, “Reaching Out With Technology: Connecting the 

Low-Income Population to the Financial Mainstream,” Building 

Blocks, Fannie Mae Foundation, 2, No. 2 (Fall 2002). 17 Catherine P. Montalto, Households with Low Income: Wealth and 

Financial Behaviors, Report to the Consumer Federation of America, 

(Washington, D.C., February 10, 2004). 

The Business Case for Offering Financial Education 

In addition to strengthening formal banking relationships and improving creditworthiness, bankers have 

found that a key benefit of offering financial education 

is the ability to reach out to new groups of customers. 

Indeed, data gathered by the FDIC indicate that, while 

many banks use the Money Smart financial education 

curriculum because they perceive it to be a quality 

product carrying the FDIC seal, an equal number said 

they use it because financial education is a good business development tool (see Chart 6).18 

The sheer size of the markets represented by students, 

immigrants, and low- and moderate-income households 

and their need for money management skills make a 

clear business case for banks to offer financial 

education programs. 

Banks are actively delivering financial education, and 

some bankers note that providing financial education 

and advice to their customers is a core function of the 

banking business. Indeed, a Consumer Bankers Association survey, which included many of the nation’s largest 

banks, found that nearly 100 percent of responding 

institutions are involved in various forms of financial 

education (see Chart 7).19 

Many new customers gained through financial education efforts initially may need only basic, low-cost 

payment services and savings accounts, which likely 

will not result in immediate profitability for banks. 

However, over the long term, the newly banked likely 

will need more sophisticated and varied products, 

which could reasonably result in profitable 

banking relationships. 

More immediately, banks that provide financial education could receive positive consideration from regulators as their investment, lending, and service 

performance is evaluated under the Community Reinvestment Act (CRA). Although each bank, situation, 

and program is different and would be evaluated on its 

own merits, the following is an example of how banks 

providing financial education could receive positive 

CRA consideration: 

18 FDIC, FDIC Money Smart Survey of User Organizations, 2003 to 2004 

(Washington, D.C., 2004). 19 Consumer Bankers Association, 2003 Survey of Bank-Sponsored 

Financial Literacy Programs (Arlington, VA, 2003). 

FDIC QUARTERLY 37 2007, VOLUME 1, NO. 2 
1

Chart 6 Chart 7 

Financial Institutions Offer Many Targeted 

Financial Education Programs and Services 

0% 

10% 

20% 

30% 

40% 

50% 

60% 

70% 

Taking 

Advantage of 

a Good Business 

Opportunity 

Wanting to 

Use a Quality 

Product with 

the FDIC "Seal" 

Improving CRA 

Performance 

Responding 

to FDIC 

Invitation 

Responding 

to Community 

Invitation 

Banks See Financial Education as 

a Valuable Business Opportunity 

Percent of banks saying a given reason was "very important" 

in their decision to offer Money Smart classes 

Percent of 

Respondents 

Source: FDIC Money Smart Survey of User Organizations, 2003 to 2004 (Washington, D.C., 

2004). 

• Investment Performance: A bank provides direct 

funding to a nonprofit organization that offers financial education training to consumers. 

• Lending Performance: A bank lends to low- and 

moderate-income financial education program 

participants. 

• Service Performance: A bank directly conducts 

financial education training for low- and moderate 

income individuals or provides low-cost deposit 

accounts to these participants.20 

Bank financial education programs have become 

increasingly creative and often target consumers on the 

basis of their level of knowledge or specific financial 

need, and many incorporate other banking services. 

Although there is no “best method” for delivering 

financial education and related support services, the 

following are a few common practices: 

• Informal, one-on-one counseling. 

• Partnering with nonprofits or local government 

entities to teach formal classes. 

• Donating funds to schools or nonprofits for 

formal classes. 

20 See Interagency Questions and Answers (Q&As) for CRA, 66 Fed. 

Reg. 36619, 36631, §.22(a)-1 (July 12, 2001), http://www.ffiec.gov/ 

cra/pdf/qa01.pdf. 

Mortgage/Homeownership Counseling 

Affordable Mortgage Program 

Credit Counseling 

Employee Tutoring 

Small Business Development 

K-12 Financial Education 

Predatory/Abusive Lending Prevention 

Adopt-a-School Program 

Programs for the Unbanked 

Foreclosure Prevention/Counseling 

College Financial Education 

0% 20% 40% 60% 80% 100% 

Source: Consumer Bankers Association, 2003 Survey of Bank-Sponsored Financial 

Literacy Programs (Arlington, VA, 2003). 

• Establishing mini-branches in schools. 

• Hosting formal classes at bank facilities. 

• Providing mobile branches that move to target 

communities or to employers to provide banking 

services or financial education. 

• Translating important banking documents into the 

language of consumers and hiring bank employees 

who speak those languages. 

• Providing specialized, no-account services, such as 

check cashing or money transmission services. 

“Banks Reach Out with Financial Education” (see 

page 41) highlights how three banks have integrated 

the Money Smart curriculum into their financial education programs. These three banks (and 56 percent of 

all banks using the Money Smart curriculum) determined that offering special products or services to 

Money Smart students is an effective strategy.21 Some 

programs offered by Money Smart bank partners are 

listed below. They range from basic “get to know you” 

strategies to products and services tailored to financial 

education students: 

• 23 percent introduce students to their institutions 

with a tour of their facilities. 

21 FDIC, FDIC Money Smart Survey of User Organizations, 2003 to 2004 

(Washington, D.C., 2004). 

FDIC QUARTERLY 38 2007, VOLUME 1, NO. 2 
Banking on Financial Education 

• 23 percent give unique credit or loan counseling 

available only within the Money Smart process. 

• More than one-fifth offer free checking accounts to 

Money Smart students. 

• 19 percent offer no-minimum-deposit checking or 

savings accounts to Money Smart students.22 

Although many benefits accrue to banks that offer 

financial education, the banks must absorb some operating costs, such as paid advertising or providing some 

sort of incentive for participants to attend. The costs 

will depend on the bank’s approach. Banks can minimize expenses by partnering with community or 

government organizations and using free curricula and 

other resources, including the FDIC’s Money Smart 

program. The FDIC does not specifically endorse other 

programs or groups; however, the following are sources 

of information for bankers who wish to start or expand 

financial education activities: 

• The FDIC’s Money Smart curriculum and access to 

the computer-based instruction version are available 

at the FDIC’s Web site, http://www.fdic.gov/ 

consumers/consumer/moneysmart/index.html. 

• FDIC Consumer News (http://www.fdic.gov/ 

consumers/consumer/news/index.html) provides 

practical guidance for consumers on how to use 

financial services. Each issue offers helpful hints, 

quick tips, and commonsense strategies to protect 

and stretch a consumer’s paycheck. 

• The United States Financial Literacy and Education 

Commission (http://www.treas.gov/offices/domesticfinance/financial-institution/fin-education/ 

commission/) created MyMoney.gov (http://www 

.mymoney.gov/), the U.S. government’s Web site 

dedicated to teaching the basics of financial education. The site contains information from 20 federal 

agencies involved in financial education efforts, 

including the FDIC. 

• America Saves (http://www.americasaves.org/) is a 

nationwide campaign to help individuals and families save and build wealth. More than 1,000 

nonprofit, corporate, and government groups offer 

22 Ibid. 

information, advice, and encouragement for individuals who want to pay down debt and save for 

the future. 

• The Federal Reserve System’s education Web 

site links to instructional materials and tools to 

increase understanding of the Federal Reserve, 

economics, and financial education (http://www. 

federalreserveeducation.org/). In addition, the 

Federal Reserve Bank of Chicago hosts the Financial 

Education Research Center, part of the Consumer 

and Economic Development Research and Information Center (http://chicagofed.org/cedric/financial_ 

education_research_center.cfm). Other online 

resources are available for researchers, educators, and 

program directors interested in supporting these 

types of programs and initiatives. 

• The Office of the Comptroller of the Currency has 

developed a Financial Literacy Resource Directory 

that provides descriptions and contact information 

for a sampling of organizations that have undertaken 

financial literacy initiatives (http://www.occ.treas 

.gov/cdd/finlitresdir.htm). 

• Jump$tart Coalition for Personal Financial Literacy 

(www.jumpstartcoalition.org) is a national coalition 

of organizations dedicated to improving the financial 

literacy of kindergarten through college-age youth. 

The coalition provides advocacy, research, standards, 

and educational resources. 

Financial Education Is Good Business 

Financial education helps consumers become more 

confident about the future by offering them the knowledge to make sound money management decisions. 

Financial education also benefits banks because it helps 

them target new customers who otherwise might not 

have chosen a financial relationship with a bank. 

Although difficult to quantify, bank financial education 

strategies also can positively influence local communities over the long term. These programs generate goodwill and connect banks with local organizations. As 

individuals become better able to manage their money, 

households may benefit from greater financial stability, 

potentially minimizing the numbers of bankruptcies, 

foreclosures, and other credit problems. Benefits also 

could be expected to spill over to local businesses and 

the community at large. 

FDIC QUARTERLY 39 2007, VOLUME 1, NO. 2 
Authors: Susan E. Burhouse, Senior Financial Economist, 

Division of Insurance and Research 

Sburhouse@fdic.gov 

Angelisa M. Harris, Senior Community Affairs 

Specialist, Division of Supervision and 

Consumer Protection 

angharris@fdic.gov 

Luke W. Reynolds, Community Affairs Specialist, 

Division of Supervision and Consumer 

Protection 

lureynolds@fdic.gov 

The authors wish to acknowledge the following individuals 

for their valuable contributions to the writing of this article: 

Eric Scheetz, First Vice President & CRA/Compliance 

Manager, Center Bank 

Missy Tysinger, Vice President, CRA Service Test 

Manager, Wachovia Bank, National Association 

Gladys Everts, Vice President, CRA Service Programs 

Manager, Wachovia Bank, National Association 

Ammar Askari, Assistant Vice President, Strategic Sales 

Community Education Administrator, Marshall & 

Ilsley Bank 

The FDIC’s Money Smart Curriculum 

The FDIC developed Money Smart to help adults outside often partner with community-based organizations and 

the financial mainstream build financial knowledge and other local groups, such as housing authorities, to offer 

develop positive relationships with financial institutions. Money Smart classes. Together, these banks and other 

Money Smart, piloted in early 2001 in the Washington, organizations form the FDIC’s Money Smart Alliance. 

D.C., area, was distributed throughout the United States More than 1,250 organizations in the Alliance facilitate later that year. Today, Money Smart is available in six the delivery of financial education by promoting, deliv- languages in addition to Braille and large print. ering, translating, funding, and evaluating the Money 

Money Smart Smart program. contains these ten modules: 

• Bank On It: Use of Money Smart is not limited to Alliance members. an introduction to bank services. 

The FDIC provides copies of the Money Smart curricu-

• Borrowing Basics: an introduction to credit. lum free of charge to anyone requesting a copy. As of July 

1, 2007, the FDIC has delivered about 440,000 copies. • Check It Out: how to choose and keep a 

checking account. Although all ten Money Smart modules were developed with a detailed instructor script, the FDIC often • Money Matters: how to keep track of your money. provides instructional training and technical support. 

• Pay Yourself First: why you should save, save, save. In addition, a Train-the-Trainer video, produced in 

English and Spanish, is available to help instructors 

• Keep It Safe: your rights as a consumer. 

prepare to teach Money Smart. As of July 1, 2007, the 

• To Your Credit: how your credit history will affect FDIC had offered more than 600 instructor workyour credit future. shops to approximately 13,000 instructors and distributed 35,000 copies of the Train-the-Trainer video. 

• Charge It Right: how to make a credit card work 

for you. The computer-based instruction (CBI) version of 

• Loan To Own: know what you are borrowing before Money Smart was released in English and Spanish in 

you buy. 2004. The CBI version, which can be completed 

online, is available on the FDIC’s Web site at • Your Own Home: what homeownership is all about. www.fdic.gov/consumers/consumer/moneysmart/mscbi 

Money Smart may be offered to students in a classroom, /mscbi.html. The FDIC also will provide a compact 

small group, or one-on-one setting. Financial institutions disc for those without Internet access. 

FDIC QUARTERLY 40 2007, VOLUME 1, NO. 2 
Banking on Financial Education 

Banks Reach Out with Financial Education23 

Words Become Seeds: A Community Bank’s Use of 

Money Smart Helps a Diverse Market 

Center Bank in Los Angeles, California, was established in 1986 to serve the credit needs of the diverse 

community in and around the city’s Koreatown. The 

bank now operates in California, Washington, and 

Illinois. Center Bank’s involvement in the Money 

Smart program began when it helped the FDIC 

launch the Korean-language version of Money Smart. 

In particular, Center Bank cooperated with community-based organizations and competitor banks to 

ensure that the Korean translation was accurate and 

culturally sensitive. Center Bank also was the FDIC’s 

first partner in delivering Money Smart to Koreanspeaking Americans. Classes began in June 2003, and 

soon other Korean-American banks began teaching, 

sponsoring, and using Money Smart. 

Center Bank has continued using Money Smart and 

now offers after-hours classes in branch offices. Each 

class is advertised in local newspapers. At the end of 

the course, students participate in a graduation ceremony and receive a certificate of completion from a 

bank executive. More than 600 people, many of 

whom might not otherwise have come to Center 

Bank, have attended about 40 classes offered at 

Center Bank branches. 

Also, using the Money Smart curriculum, Center Bank 

delivered financial education tips during a program 

on a Korean radio station. While no formal tracking 

occurred, bank management believes that these 

presentations helped attract new customers and highlighted the bank’s services to the local community. 

Educational Outreach in Action—Building Long-term 

Relationships and Measuring Results 

Wachovia Bank, N.A., was the first major bank to 

partner with the FDIC to offer the Money Smart 

curriculum to lower-income consumers. Wachovia 

sees financial outreach as an essential community 

responsibility, and believes that giving consumers a 

23 These are only examples of some banks that use the Money Smart 

curriculum. The FDIC does not endorse these or any other specific 

bank programs. 

stronger financial foundation will help them make 

more informed financial product choices. 

Wachovia uses a variety of delivery channels for 

Money Smart, including community partners, the 

Wachovia branch network, and employee volunteers. 

The Money Smart curriculum is delivered primarily 

through about 60 nonprofit community partners in 

low- and moderate-income neighborhoods. Wachovia 

supports the financial literacy efforts of its community 

partners in various ways, including donation of classroom materials. Classroom materials feature duallanguage (English and Spanish) Money Smart videos 

and DVDs specifically created by Wachovia for 

students and instructors. 

A distinctive element of Wachovia’s financial education program is its ability to track activities and 

results. Wachovia sets goals and establishes benchmarks to track course delivery, participant demographics and skill level, and banking account trends. 

Wachovia uses the data to provide its nonprofit 

community partners an annual report that measures 

the impact of their financial literacy outreach. 

Since the program began in 2003, Wachovia has 

trained more than 70,000 participants, who are 

predominantly African-American, Hispanic/Latino, 

women, low- and moderate-income, and either 

unbanked or underbanked. Based on participants’ selfassessments, the average skill level improved substantially after course completion. 

Wachovia’s plans for financial education programs 

include improving measurement of financial behavior 

among class participants over time. Also, Wachovia is 

developing a more robust measure of the extent to 

which financial education can be used to inform or 

change behaviors about timely personal financial issues, 

such as payday lending, identity theft, stored-value 

cards, mortgage lending disclosures, and bankruptcy. 

FDIC QUARTERLY 41 2007, VOLUME 1, NO. 2 
Tailor Made: A Customized Approach to Financial 

Education Seminar Delivery 

Marshall & Ilsley Bank (M&I) realized that to reach 

new customers, it needed to make some adjustments 

to the content and delivery of its financial education 

program. Beginning in 2005, the bank partnered with 

local community organizations that helped identify 

individuals who would benefit most from financial 

education. M&I customized financial education 

topics and Money Smart modules to meet the needs of 

these audiences and has been particularly active in 

financial education for youth. 

During the past year and a half, M&I has formed partnerships with more than 40 government, community, 

nonprofit, educational, and private organizations to 

deliver customized training. The following are examples 

of M&I’s customized approach to financial education: 

Financial Literacy Alliance for Milwaukee Education 

(FLAME): M&I joined with other Milwaukee-based 

financial institutions to address the lack of financial 

literacy in urban Milwaukee schools. This consortium 

provides training and financial incentives to help 

teachers incorporate a semester-long financial education program into the existing curriculum, thus reaching a wider audience while expending fewer resources. 

City of Milwaukee Summer Youth Internship Program: 

As part of this summer program, youth are hired for city 

jobs and receive life-skills training. M&I was invited to 

participate, and approximately 200 urban youth 

received education about the importance of saving and 

the proper management of a checking account. 

Make a Difference—Wisconsin, Inc.: M&I partnered 

with this nonprofit organization to deliver financial 

education to youth in the Milwaukee Public School 

(MPS) system. A financial literacy program was 

developed for 11th grade students attending an MPS 

high school. This grade level was targeted because 

these students represent the next generation of financial consumers. 

To gauge the effectiveness of these and all of the 

bank’s financial education programs, M&I surveys all 

students before and after the training. The 2006 seminar attendees gave more correct answers on the postsurvey than on the presurvey, and M&I attributes the 

improvement to the seminars. M&I intends to 

conduct more long-term follow-up of program participants’ banking behaviors to document the effectiveness of its financial education efforts. 

M&I also offers a suite of products to participants in 

the financial education seminars as entry points for 

formal banking products: 

• Thrift Savings: Allows customers to open an account 

with $25, earns interest, and allows direct deposit. 

• Foundation Checking: Provides a $50 cash bonus for 

customers who have completed the Get Checking 

program (a six-hour checking education course). The 

account has no minimum balance requirements and 

offers an ATM card after six months of good standing. 

• Credit Builder: Provides a way to borrow $1,000 to 

$5,000, with flexible repayment timeframes, no 

prepayment penalties, and the ability to build savings 

and earn interest. Once approved, the loan dollars are 

held in an M&I Bank certificate of deposit (CD) for 

the term of the loan. When the loan is repaid in full, 

the customer will receive the amount borrowed plus 

the interest earned on the CD. As a result, customers 

with no credit history or with a challenged credit 

history can improve their credit score during the loan 

period, while also building assets (savings). 

FDIC QUARTERLY 42 2007, VOLUME 1, NO. 2