The Missing Mandate: Financial Literacy

Brooke Stephens

As legislators and lobbyists congratulate themselves on the 2300 pages of legalese drafted to reform Wall Street banks and the financial services industry, not one paragraph addresses a major reason why the meltdown occurred: how American consumers learn to manage money. According to several mortgage banking studies, nearly 70 percent of the victims of foreclosure admit they did not understand the terms of the deal they signed or the long-term impact on their lives.

Congress had plenty of chances to address this problem. More than 30 bills focused on financial literacy have been introduced since 2006. All of them died in Senate or House committees. None were included in this recent reform bill.

Money, like sex, is supposed to be taught at home but in a 2008 Charles Schwab study, 69% of parents interviewed reported they were more prepared to discuss sex than money with their children.

Posted by Jim Zellmer at August 12, 2010 1:44 AM
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