San Diego, CA. - John W. Snow, now former U.S. Secretary of the Treasury, recently issued the first report of The National Financial Literacy and Education Commission. The commission was created under the Department of the Treasury by an act of Congress. It was Title V of the Fair and Accurate Credit Transactions Act (FACTA) President Bush signed into law on December 4th, 2003. The law charged the commission, made up of 20 federal agencies to improve the financial literacy and education of persons in the United States through the development of a "National Strategy". Some excerpts of the Quick Reference Guide are below.

The Executive Summary lists the usual benefits of financial education. "Help people own a home, live a comfortable retirement, finance an education, avoid fraud and generally make the most of the numerous choices afforded by our modern market- place of financial products and services. However uninformed choices can be dangerous. That is why the ultimate goal of this Strategy is to empower individuals to choose wisely."

"The Strategy recognizes that the infrastructure of financial education can only be erected with the cooperation of three builders: the government, the private sector and the individual. Each of these "builders" has its role. The government can regulate the financial marketplace and provide information for consumers. The private sector, including for-profit and non-profit organizations, can use its expertise, resources, and positioning to provide financial literacy programs. Individuals can take an interest in managing their finances and use the information and programs provided by the government and private sector to improve their lives and those of their loved ones.

No one of these groups can succeed in assembling a financial education system alone. Yet mere cooperation without coordination is not enough. Therefore all three of these players must work together to assemble a national infrastructure for financial education under a common blueprint. The Strategy provides such a blueprint. The Strategy's blueprint is firm enough to give general direction, but flexible enough to allow different players to chose their own roles in enhancing financial education. The Strategy is a blueprint that is intended for the private sector, individuals, and government. The private sector can use the Strategy's definition of the challenges and the best practices as tools to focus and design future efforts. Individuals can use some of the resources listed to better manage their financial affairs. Government policymakers can use the Strategy to frame their analyses on financial literacy matters.

Each chapter recommends one or more Calls to Action - proposals for next steps for further development of our financial education infrastructure. Most of the proposals call upon the Federal government to take steps to raise the level of financial literacy. Some of these proposals call upon the private sector to expand their involvement in financial education. Other proposals suggest steps individuals should take for themselves to enhance their financial knowledge."

Purpose

Beyond meeting a statutory requirement, there are three major purposes to the Strategy. First, the document is designed to identify issues within the field of financial education. This will assist policymakers and practitioners alike as they assess the national level of financial literacy. Second, the Strategy proposes solutions -- in some cases by suggesting specific steps and in other cases by offering examples of programs with features that should be replicated by organizations wishing to spread financial literacy. Third, the Strategy seeks to advance the national conversation on financial education. Improving financial literacy requires first awareness and then action in government, in the private sector, and among individuals. Therefore, the Strategy is designed to serve as a discussion piece, an action plan, and, in time, a rallying point for those advocating for greater financial literacy in America.

Structure and Organization of the Strategy

In developing the Strategy, the Commission focused on 13 different topics for addressing the wide range of financial issues Americans face.

Topic Areas

The Strategy contains 13 subject-specific chapters. The Strategy begins with an examination of general savings issues in Chapter 1. To transform the time-honored American dream of owning one's own home into an achievable reality, Chapter 2 of the Strategy addresses the topic of homeownership. As Social Security benefits alone may not allow Americans to maintain their pre-retirement financial standing, Chapter 3 addresses the need to properly attend to their future financial well being.

Chapters 4 through 7 of the Strategy address important financial applications such as credit, consumer protection, taxpayer rights, and investor protection. Chapters 8 through 10 focus on key audience sectors that require targeted financial education, including the unbanked and multicultural populations, and K-12 and postsecondary students.

Finally, chapters 11 through 13 of the Strategy address important organizational and logistic topics, such as program evaluation and improvement, coordination efforts, and the international perspective.

Each chapter contains an overview of the topic, a discussion of the challenges and issues specific to that topic, and illustrations of potential solutions to address those challenges. Additionally, each chapter concludes with one or more calls to action which are keyed to one or more of five basic tactics for financial literacy, listed below.

Overviews

Each chapter begins with an introduction to the current landscape of the respective topic. This section will set the stage for an in-depth treatment of the subject matter. The overviews discuss recent developments in that subject area, describe economic impacts of the current situation continuing as the status quo, and provide quantitative data from secondary research that illustrates the current state of affairs in a tangible way.

Challenges

While the Overview frames the discussion, the Challenges section actually paints the picture of the problems Americans are having with this financial topic. Only when such challenges are accurately identified can effective solutions be proposed.

Issues and Solutions

The Issues section looks at the challenges identified in the previous section through the lens of financial education. This section then describes actual financial education programs that help Americans meet these challenges. The Federal government programs are mentioned so readers can make use of them to assist with their financial affairs. The non-Federal government programs are discussed generically as illustrations of programs that are effectively addressing the topic of the chapter. These programs are included as models for those readers wishing to establish or improve their own financial education programs.

While the essential elements of the cited programs are described in the respective chapters of the Strategy, the programs' names are not listed (with the exception of Federal government programs). Readers wishing to learn more about any of the programs listed can find the name of the program and contact information in this document - the Treasury's Quick Reference Guide. By listing programs by name, the Quick Reference Guide gives the reader the ability to research each of these programs for further information on the initiative described or to directly reach out to the organizers of the program.

Calls to Action

Each chapter of the Strategy calls for specific actions to improve financial literacy for all Americans. Each of these Calls to Action may be directed to the Federal government, the private sector, or to individuals. The 26 Calls to Action identify concrete steps that should be undertaken to meet the challenges identified in that chapter. Each Call to Action is associated with a tactic or tactics described below. These five tactics occur in different combinations and are broad methods or approaches for addressing the various financial education issues described in the chapter. In the Strategy, each Call to Action is found at the end of its respective chapter. A complete list of all the Calls to Action is included in the Quick Reference Guide.

As referenced above, the Commission found certain fundamental approaches to improving financial literacy that cut across subject areas. These five specific tactics are considered the "Who, What, Where, When, and How" of raising the level of financial literacy for all Americans. The tactics are essential to replicating the success of the programs cited and to implementing the Strategy's Calls to Action.

For the complete, detailed commission report, please visit:
http://www.mymoney.gov/pdfs/ownership.pdf

For the Quick Reference Guide of commission report, please visit:
http://www.mymoney.gov/pdfs/QuickRefGuide.pdf