Thank you, Mr. Chairman. I am glad that you have called this hearing. As you have pointed out, financial literacy is so critical.
It is as necessary in todayís world as basic reading and math skills. Unfortunately, it often does not get the attention it deserves.
Last December, back in my home state of Michigan, I attended an event at Eastern High School in Lansing where the Michigan Jump$tart Coalition for Personal Financial Literacy released the findings of a statewide survey in conjunction with the National Institute for Consumer Education.
What we learned was disturbing. Michigan high school seniors generally did not have a strong grasp on basic personal finance concepts related to saving and investing, money management, and credit.
I doubt our students are much different from students around the country.
One interesting finding in the study was that students who participated in the Stock Market Game, a national investment game, did better in the survey than students who completed an entire course in money management or even an entire course in economics.
This seems to indicate that reality-based, interactive learning curriculum is critical to instilling basic financial literacy concepts in our students. This finding is a lesson that I hope that educators and other policymakers will explore more thoroughly.
Mr. Chairman, if we are to improve financial literacy, then we must make it a priority in our schools. The education bill that we passed not too long ago establishes a national financial literacy clearinghouse and I hope that will help us to streamline our education efforts.
In addition, I am happy to note that, in my state, the legislature is moving forward, in a bi-partisan way, to make financial literacy a priority.
The State House of Representatives, last month, overwhelmingly passed a bill to ensure that the State Department of Education establishes model programs in financial education.
The bill also makes it clear that Michigan schools should set aside federal education funds specifically for financial education programs. I hope the state Senate will act quickly on this proposal.
Consistent with this emphasis on financial literacy, in Michigan, we test our students on economic concepts in the 5th, 8th, and 11th grade as part of the Michigan Educational Assessment Program. It is so important that we continue to do this throughout elementary and secondary school. Economics should be an integral part of the curriculum at every age level in every part of our country.
Mr. Chairman, while the kindergarten through 12th grade period is an important time to educate the public, we in Michigan and around the country need to look at improving financial literacy among adults as well.
The financial illiteracy of adults in this country is both startling and troubling. And, it makes too many in our society vulnerable to predatory lending practices.
Thatís why I was so pleased to join with Freddie Mac last year in launching the anti-predatory lending campaign "Donít Borrow Trouble" in Southeast Michigan. Freddie Mac is a real leader in educating our public about their rights and responsibilities when buying a home.
I hope that Freddie Mac, and its counterpart, Fannie Mae, will continue to be leaders in tackling abusive lending Ė especially as the two companies move increasingly into the subprime market.
Mr. Chairman, I look forward to hearing from our witnesses today. I hope that this set of hearings is just the beginning.
I want to work with my colleagues, community groups, financial services companies, and consumer groups to make financial education an on-going effort.
We need more campaigns like "Donít Borrow Trouble."
Campaigns for managing credit card debt and for keeping a good credit rating. And, it must be done in a sustained and coordinated way. Thatís the way we did it in Detroit. We brought everyone to the table, assessed the communityís needs, and implemented a program.
Furthermore, we need the financial services community to step up and reach out to the "unbanked" and "underbanked" even when itís not their most profitable demographic group.
We need to improve financial literacy to help my generation as well as our children and their children better understand saving and investment needs and to help plan appropriately so that retirement years are comfortable times Ė not a time when people have to choose between necessities like food and prescription drugs.
All of this is possible and I hope today will be an important step forward.
Thank you, Mr. Chairman.