I would like to thank Chairman Sarbanes for scheduling this hearing on this important topic. I believe that financial literacy is essential for consumers in the new economy.
I would like to commend Delaware’s State Treasurer Jack Markell for the remarkable job he has done in our state to promote financial literacy. He has created the Delaware Money School, which provides community-based financial education. Financial professionals volunteer to teach classes on subjects that include money management and debt reduction, investing, retirement planning, and managing life changes. This winter alone the Delaware Money School will offer over 80 classes throughout the state, most of which are free. The Money School also has a web site, www.delawaremoneyschool.com, which offers online registration for the Money School, and useful financial literacy links to governmental, educational, and private organizations.
Last November State Treasurer Markell hosted a free money conference for kids and their parents at the University of Delaware. On a Saturday morning, approximately 500 people, including children in grades 4-7 and their parents, attended the conference. Treasurer Markell is committed to teaching the children of Delaware the three S’s (saving, spending, and sharing or giving to charity).
Also in Delaware, local banks have partnered with 21 elementary schools to promote and teach the importance of saving. The program, called Bank at School, is sponsored by the University of Delaware’s Center for Economic Education and Entrepreneurship and the Delaware Chamber of Commerce. It allows students to open and manage savings accounts while at school, and includes a teaching program developed by the University of Delaware. The program is very successful with over 2500 children participating.
It is clear that financial literacy is important. However, recent events have shown that literacy is not enough. Even the most sophisticated investor cannot be expected to divine the truth from false financial statements and disclosures, nor can the ordinary investor be expected to know that some analysts recommendations are based not on objective analysis, but on a willingness to bend the truth to attract investment banking business. These issues are not new, and recent events merely bring them front and center. I know that the committee will be holding hearings on the issues raised by the collapse of Enron, and I look forward to exploring these issues at those hearings.
Thank you again Mr. Chairman for holding today’s hearing.