National Financial Literacy Summit and Report Only the Beginning, Valdov Says

January 11, 2007

FOR IMMEDIATE RELEASE
Contact:
Pat Keefe, CUNA
(202) 508-6765; pkeefe@cuna.com

WASHINGTON -- “Many entities are active on financial literacy, but only credit unions were born to champion this cause,” writes CUNA Chairman Juri Valdov in the National Financial Literacy Summit report that CUNA released and posted to its web site this week.

Valdov assembled summit participants in Washington, DC, from a variety of credit union system organizations in September and announced that a report would be prepared chronicling the summit’s activities and results.

"The report will help shine a light on the need for credit unions, leagues, CUNA, and other national credit union organizations to generate additional discussion, spark new ideas, and move the movement closer to achieving the shared goal of fostering financial independence through financial education," Valdov said.

As an indication of the scope of the challenge, Valdov noted that today:

• Three of five preteens do not understand the difference among cash, credit cards, and checking accounts.

• Most high school graduates fail basic financial literacy testing.

• The average college student graduates with an average debt load of more than $20,400.

• One-half of the working population has saved less than $50,000 for retirement and the average balance in a company sponsored 401(k) plan in this country is only $29,000.

“While these data are not credit union member specific, they more than likely apply to many credit union members who need help with saving, borrowing, and money management,” Valdov said. “It was for those reasons and more that we convened the summit and offer this compendium of its actions for the credit union movement’s consideration.”

The 41-page report highlights speaker presentations and group work by summit participants. Some of the recommended actions resulting from discussions at the summit include:

• Commit to doing something to educate the underserved, such as increasing existing financial literacy efforts and creating a community advisory group. Develop a financial literacy clearinghouse at state and national levels.

• Make a long-term monetary commitment to making financial education part of the educational curricula in your community.

• Lobby to make personal finance education a high school graduation requirement.

• Take advantage of existing programs and look for partnership opportunities.

• Publicize the business and advocacy reasons for improving the financial literacy of all citizens, especially the underserved.

• Measure the effectiveness of these efforts.

The report also includes guiding principles for youth financial education: Financial goals for young people must be personal. Youth must develop a savings habit and earn regular income at an early age. They must have the freedom to make real decisions and real mistakes in handling money. Parents should have or develop the skills to set good examples for their children and must reinforce their children’s learning. From the credit union side, credit unions must articulate and demonstrate their commitment to youth financial education. And financial education programs should connect to later learning by fostering cradle-to-grave learning tied to specific age-appropriate financial services.

The report summarizes remarks of guest speakers at the summit, including Rep. Judy Biggert (R-IL), co-chair of the Congressional Financial Literacy and Economic Caucus; National Credit Union Administration Chairman JoAnn Johnson, Junior Achievement CEO David Chernow; Treasury Deputy Assistant Secretary for Financial Education Dan Iannicola, Jr.; National Endowment for Financial Education CEO Ted Beck; Jumpstart Coalition for Personal Finance Executive Director Laura Levine; Consumer Federation of America Legislative Director Travis Plunkett; Washington Post personal finance columnist Michelle Singletary; and Jane Schuchardt, national program director for USDA's Cooperative, State Research, Education and Extension Service.

Also included in the report is a compendium of financial literacy materials currently available through the credit union system. The complete report is accessible on www.cuna.org under “CUNA Initiatives” (or, just click here to view the PDF file).

With its network of affiliated state credit union leagues, the Credit Union National Association (CUNA) serves more than 90 percent of America's 9,500 state-chartered and federally chartered credit unions, which are owned by more than 88 million consumer members. Credit unions are not-for-profit cooperatives providing affordable financial services to people from all walks of life. For more information, go to www.cuna.org.

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