Week Ending April 30

TheWeekInCongress.com

Week Ending April 30, 2004

House Resolution 578 Supporting the goals and Ideals of Financial Literacy Month, and for other purposes.

The resolution expresses Congress’ support of the banking and finance industry. The Resolution is filled with some interesting demographics:

Recognizing that the financial industry “provides products and services that allow individuals and families to build homes, buy cars, finance educations, start businesses, and meet everyday needs” it follows for Congress that “personal financial education is essential to ensure that individuals are prepared to manage money, credit, and debt, and become responsible workers, heads of households, investors, entrepreneurs, business leaders, and citizens.” Congress has found, however, that high school seniors in 2002 knew less about personal finances than their peers did in 1997.

Congress sees a link between financial education and “lower delinquency rates for mortgage borrowers, higher participation and contribution rates in retirement plans, improved spending and saving habits, higher net worth, and positive knowledge, attitude, and behavior changes,” but concerns itself that another 2002 study showed an increasing number of States that do not add personal finance education for grades K through high school.

Some other interesting statistics worry Congress:

25 to 56 million Americans are considered ‘unbanked’ because they do not use mainstream, insured financial institutions,

42 million Americans have 401 k accounts but only 32 percent in 2002 knew how much they would need to retire and 25 percent had no retirement plan. 30 percent are not confident that they have the knowledge to make the right financial decisions,

Personal savings as a percentage of personal income decreased from 7.5 percent in the early 1980s to 2.3 percent in the first 3 quarters of 2003.

Vote: Passed House 391 to 0, 42 not voting.