Highlights of a Forum: Financial Literacy: Strengthening Partnerships in Challenging Times

Published by the Government Accountability Office on 2012-02-09.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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                                   Financial Literacy:
                                   Partnerships in
                                   Challenging Times

                                   February 2012
                                             February 2012

                                             HIGHLIGHTS OF A FORUM
                                             Financial Literacy: Strengthening Partnerships in
                                             Challenging Times
Highlights of GAO-12-299SP, a summary of a
GAO forum

Why GAO Convened This                        What Participants Said
Forum                                        Participants highlighted the following themes during the forum:
Giving Americans the information they        Focus on key populations. Participants discussed a number of areas that
need to make effective financial             should be the most sustained focus of the nation’s financial literacy efforts in the
decisions can be key to their well-
                                             coming years. Among other areas, efforts should target kindergarten through
being, and to the country’s economic
                                             12th grade education; the workplace; the preretirement years; and special
health. The recent financial crisis—
during which many borrowers did not          populations that may be particularly vulnerable, including low-income
fully understand the risks associated        communities, the Hispanic community, and older Americans. Materials should be
with alternative mortgage products—          tailored as appropriate to meet these populations’ characteristics and
underscored the need to improve              circumstances.
individuals’ financial literacy. Further,    Identify the most effective approaches and target efforts accordingly. More
economic, demographic, and                   research is needed to identify the most effective approaches to improving
technological trends that have affected
                                             financial knowledge and behavior. Targeting products appropriately, improving
the need for financial literacy continue,
                                             delivery mechanisms, and leveraging technology are also important.
including the retirement of the baby
boomers; the emergence of new                Enhance the role of employers in improving their employees’ financial
financial products; and increasing           literacy. Employers have a key role to play in improving the financial literacy of
costs for health care, higher education,     their employees—for example, by encouraging them to save for emergencies
and retirement. GAO convened a               and retirement. Further, financial literacy stakeholders need to do more to
forum on October 20, 2011, to discuss        persuade employers of the business benefits of supporting healthy financial
(1) needs and priorities in improving        behaviors by employees.
financial literacy; (2) roles and
responsibilities of, and collaboration       Leverage the unique role of the federal government. The federal government
among, the government, nonprofit, and        has a unique role to play in promoting greater financial literacy. For example, the
private sectors; (3) lessons learned         government can use its convening power and other tools to draw attention to the
from federal public health and nutrition     topic, take advantage of existing connections with certain populations, and make
literacy initiatives; and (4) GAO’s          certain legal and regulatory changes to support greater financial literacy.
potential role in addressing financial
literacy issues.                             Increase coordination and partnerships within and across levels of
                                             government and different sectors. Opportunities exist to further increase
Forum participants included                  coordination and partnerships among entities involved in financial literacy. Such
representatives of federal, state, and       efforts could help federal, state, and local government agencies; private sector
local government organizations;
                                             entities; and nonprofits conserve scarce resources and reduce any duplication of
academic experts; nonprofit
practitioners; and representatives from
the private sector. Comments                 Identify lessons from other initiatives designed to improve consumer
expressed during the proceedings do          behaviors. Financial literacy practitioners can learn from efforts in other fields,
not necessarily represent the views of       such as health and nutrition, that have sought to educate consumers and
all participants, the organizations they     influence their behavior. Participants discussed similar challenges, such as the
represent, or GAO. Participants were         difficulty of influencing people to change their behaviors and the possibility of
given the opportunity to comment on a        developing a financial literacy equivalent of the Department of Agriculture’s
draft of this summary.                       “MyPlate” nutrition graphic.
                                             Participants also discussed ideas for GAO and the Comptroller General to
                                             support or raise awareness about financial literacy or partner with others to do
                                             so. Among other ideas, they said that GAO could help in efforts to identify the
                                             best programs and methods for improving financial literacy, develop a financial
View GAO-12-299SP. For more information,     literacy initiative for GAO employees that could serve as a potential model for
contact Alicia Puente Cackley at             other government agencies, and identify opportunities for federal agencies to
(202) 512-8678 or cackleya@gao.gov.
                                             leverage existing distribution channels to provide additional financial education.
                                                                                       United States Government Accountability Office

Letter                                                                                                   1
               Introduction                                                                              1
               Financial Literacy: Highlights of the Forum Discussion                                    4

Appendix I     Forum Agenda                                                                              16

Appendix II    Forum Participants                                                                        17

Appendix III   Related GAO Products                                                                      20

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               Page i                                              GAO-12-299SP Financial Literacy Forum
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                                   Giving Americans the information they need to make effective financial
Introduction                       decisions can be key to their well-being, as well as to the economic health
                                   of our nation. Much has been written and said about the ongoing need to
                                   improve our country’s level of financial literacy, which is sometimes also
                                   referred to as financial capability, and the recent financial crisis has
                                   underscorped that need.1 For example, many borrowers did not fully
                                   understand the risks associated with alternative mortgage products that
                                   provided them with the ability to purchase homes that ultimately they
                                   could not afford. Further, several economic, demographic, and
                                   technological trends that affect the need for financial literacy continue,
                                   including the retirement of the baby boomers, the emergence of new
                                   financial products, and the increasing costs of health care, higher
                                   education, and retirement. Given the current economic environment,
                                   limited financial literacy can pose barriers to prosperity and higher
                                   standards of living. At the same time, however, increasing fiscal
                                   constraints at government agencies, particularly with regard to
                                   discretionary spending, may limit the resources available for financial
                                   literacy efforts.

                                   Much has changed since 2004, when GAO last held a forum on financial
                                   literacy.2 The federal government’s multiagency Financial Literacy and
                                   Education Commission has now been in place for more than 7 years.3 In
                                   2010, Congress created the Bureau of Consumer Financial Protection,
                                   adding a new player to the mix of federal agencies involved in financial
                                   literacy. The bureau will be responsible for, among other things,
                                   developing and implementing a strategy to improve consumers’ financial
                                   literacy and help them access financial counseling and information about

                                    The Financial Literacy and Education Commission has described “financial literacy” as
                                   the ability to make informed judgments and to take effective actions regarding current and
                                   future use and management of money. It has described “financial capability” as an
                                   individual’s capacity, based on knowledge, skills, and access, to manage financial
                                   resources effectively.
                                    GAO, Highlights of a GAO Forum: The Federal Government’s Role in Improving
                                   Financial Literacy, GAO-05-93SP (Washington, D.C.: Nov. 15, 2004).
                                    In 2003, Congress created the multiagency Financial Literacy and Education
                                   Commission, which was charged with, among other things, developing a national strategy
                                   to promote financial literacy and education, coordinating federal efforts, and identifying
                                   areas of overlap and duplication. Pub. L. No. 108-159, §§ 511-519 (codified at 20 U.S.C.
                                   §§ 9701–9708).

                                   Page 1                                             GAO-12-299SP Financial Literacy Forum
such topics as credit products, savings, educational expenses, and
wealth building. And a wide variety of organizations continue to provide
financial education for consumers, including nonprofit, community-based
organizations; consumer advocacy organizations; financial services
companies; trade associations; employers; and local, state, and federal
government entities.

Notwithstanding these efforts, relatively few financial education programs
have been evaluated for effectiveness, and even fewer have undergone
assessments that actually measure the programs’ impact on participants’
behavior, rather than just their knowledge, understanding, or intent.
Financial education is not the only approach to improving financial
behavior. Alternative strategies and mechanisms, sometimes in
conjunction with financial education, have also been successful. In
particular, insights from behavioral economists that recognize the realities
of human psychology have been used to design successful strategies to
assist consumers in reaching financial goals without compromising their
ability to choose among different products or approaches. For example,
changing the default option for enrollment in retirement plans to
automatically enroll new employees while giving them the opportunity to
opt out has led to significant increases in plan participation at some
organizations. The most effective approach to improving consumers’
financial decision making and behavior may be to use a variety of
strategies, including financial education.

On October 20, 2011, GAO convened a select group of leaders and
experts for a forum to discuss key issues related to financial literacy.
These participants, which included representatives of federal, state, and
local government agencies; academic experts; nonprofit practitioners; and
representatives from the private sector, were selected to represent a
range of viewpoints and draw from a variety of backgrounds. In the first
session, they discussed current needs related to financial literacy and
approaches to setting priorities to meet those needs. In the second
session, participants discussed the appropriate roles for the array of
government, nonprofit, and private sector entities involved in improving
financial literacy and identified strategies for collaborating on and
coordinating these efforts. The group then heard from federal public
health and nutrition literacy experts and discussed lessons that could be
learned from initiatives in these fields to inform their own strategies for
influencing and improving consumer financial behaviors. The participants
completed the day by discussing GAO’s potential role in addressing
financial literacy. The forum was structured so that participants could

Page 2                                     GAO-12-299SP Financial Literacy Forum
comment on issues openly, although not all participants commented on
all topics.

We conducted our work from August 2011 to February 2012 in
accordance with all sections of GAO’s Quality Assurance Framework that
are relevant to our objectives. The framework requires that we plan and
perform the engagement to obtain sufficient, appropriate evidence to
meet our stated objectives and to discuss any limitations in our work. We
believe that the information and data obtained, and the analysis
conducted, provide a reasonable basis for any findings and conclusions.

Following is a summary of the discussion among the forum’s participants.
The summary attempts to capture the ideas and themes that emerged at
the forum and the collective discussion of participants at the sessions.
The summary does not necessarily represent the views of the
organizations whose representatives participated in the forum, including
GAO. Participants were given the opportunity to comment on a draft of
this summary. Appendix I provides the forum agenda and Appendix II
provides a list of the participants. Appendix III lists GAO products on
issues related to financial literacy. This report is available on our website
at www.gao.gov. For additional information on our work related to
financial literacy, please contact Alicia Puente Cackley, Director, Financial
Markets and Community Investment, at (202) 512-8678 or
cackleya@gao.gov. Key contributors to this report included Jason
Bromberg (Assistant Director), Randy Fasnacht, Nina Horowitz, and
Roberto Piñero.

I wish to thank all of the participants of this forum for taking the time to
share their knowledge and insights on improving financial literacy. I look
forward to working with them and others on this important issue in the

Gene L. Dodaro
Comptroller General
of the United States

February 9, 2012

Page 3                                      GAO-12-299SP Financial Literacy Forum
                             On October 20, 2011, GAO convened a forum to discuss the needs and
Financial Literacy:          priorities in improving financial literacy; roles and responsibilities of and
Highlights of the            collaboration among the government, nonprofit, and private sectors;
                             lessons learned from federal public health and nutrition literacy initiatives;
Forum Discussion             and GAO’s potential role in addressing financial literacy issues. The
                             following summarizes the collective discussion of the forum participants.

Financial Literacy Efforts   Forum participants were asked what areas should receive the most
Should Focus on Key          sustained focus of financial literacy efforts in the coming years. Several
Populations and Skills       themes emerged from this conversation.

                             •   Focus on different time periods throughout the life cycle, including
                                 kindergarten through 12th grade (K-12) education, college, and the
                                 preretirement years. While no clear consensus emerged on a single
                                 area of focus, several participants emphasized improving financial
                                 literacy among the K-12 population. Financial literacy efforts among
                                 the K-12 population have the benefit of schools as an existing
                                 distribution system and reach students at an early point in their lives.
                                 Other participants suggested focusing on assisting college students
                                 manage the financing of their education and accumulated debt. In
                                 addition, many participants said efforts should also focus on the
                                 workplace to encourage employers to help their employees plan and
                                 save for emergencies and their retirement.

                             •   Emphasize special populations that may be particularly vulnerable,
                                 including low-income communities, the Hispanic community, and older
                                 Americans. One participant expressed the view that the focus should
                                 be on the least advantaged among us, in part because the impact of
                                 their financial decisions on their lives can be much greater than it is
                                 for those with more financial resources. For example, a person whose
                                 car breaks down but who lacks sufficient savings for repairs could
                                 lose a job as a result. Another participant noted that Hispanics
                                 disproportionately do not participate in employer-sponsored retirement
                                 plans, and several agreed about the need to target initiatives to this
                                 population to prepare them for retirement. Some participants also
                                 discussed the vulnerability of older Americans, with one noting their
                                 potentially increased susceptibility to fraud, and another explaining
                                 that it can be much harder to recover from financial difficulties later in

                             •   Enhance and publicize the importance of basic financial skills and
                                 provide more teacher training to support such efforts. Several
                                 participants mentioned the need to focus on the importance of having

                             Page 4                                      GAO-12-299SP Financial Literacy Forum
                               emergency savings. One participant noted that to effectively teach
                               basic financial literacy there is a need for teachers who are willing and
                               able to teach the subject, yet many teachers lack confidence in their
                               knowledge of the subject matter. Also, some participants said an area
                               of priority should be to create a national media campaign about the
                               importance of financial literacy or to take other steps to raise public
                               awareness about the issue.

Identifying the Most       One clear theme that emerged from the forum was the need to identify
Effective Approaches and   the most effective approaches to improving financial literacy and
Targeting Efforts          capability. Participants also highlighted the importance of targeting the
                           right populations, tailoring financial literacy efforts to these populations,
Accordingly Is Key         improving delivery mechanisms, and leveraging technology.

                           •   Conduct more research on the effectiveness of different approaches
                               to improving financial literacy. One participant noted that the increase
                               in high-quality research on this topic in recent years was a positive
                               development. Others noted that the Social Security Administration’s
                               recent funding cuts for financial literacy research should be
                               reconsidered. One participant suggested that government, nonprofit,
                               and for-profit entities could develop a shared research agenda that
                               could allow them to share resources. 4

                           •   Focus on solutions that change behavior rather than just increase
                               knowledge. One participant said that financial literacy programs
                               should refocus from simply increasing knowledge to trying to change
                               behavior. Understanding what behavioral changes result from
                               effective programs and how these changes differ across age, gender,
                               and ethnic groups is important. Several participants noted that
                               automatically enrolling employees in retirement savings plans could
                               be among the most effective tools to prepare people for retirement.
                               But one participant noted that this approach, however successful,
                               needs to be considered carefully in the context of other financial
                               obligations such as managing debt or goals that could be hindered by

                            The Financial Literacy and Education Commission’s 2011 National Strategy set as a goal
                           to “identify, enhance, and share effective practices,” including encouraging research on
                           effective strategies for affecting consumer behavior, establishing a research
                           clearinghouse, and supporting program evaluation efforts. In October 2008, the
                           Departments of the Treasury and Agriculture convened a National Research Symposium
                           on Financial Literacy and Education that sought to identify gaps in the research and
                           develop research priorities.

                           Page 5                                            GAO-12-299SP Financial Literacy Forum
                              automatic deductions for retirement, such as saving for emergencies
                              or college tuition.

                          •   Better tailor products to specific audiences. According to one
                              participant, financial literacy practitioners have spent a lot of time
                              developing educational materials, but not enough time targeting the
                              people who need more information and matching them up with the
                              appropriate resources. Several participants noted the benefits of
                              integrating financial literacy efforts into existing social service delivery
                              mechanisms, including by using technology more effectively. Some
                              participants cited the need to better understand the most effective
                              approaches to tailoring products for targeted populations. These
                              included whether a trusted resource was delivering the message;
                              whether certain delivery methods such as individual counseling
                              versus classroom training were more effective; and whether key life
                              events, such as the purchase of a home, would be most effective for
                              timing the targeting of different methods.

Employers Can Play an     One of the themes that emerged during the forum was that employers
Enhanced Role in          have a key role to play in improving the financial capability of their
Improving the Financial   employees. Participants noted, for example, that employers could
                          encourage their employees to save for emergency purposes and
Capability of Their       retirement. They also discussed the need to create incentives for
Employees                 employers to support healthy financial behavior by employees. GAO was
                          also encouraged to consider taking additional steps to enhance the
                          financial literacy of its own employees and thus serve as a model for
                          other federal agencies.

                          •   Highlight the role of employers in improving the financial capability of
                              their employees. Several forum participants discussed how employers
                              were well positioned to take an active role in improving their
                              employees’ financial capability. For example, employees spend a
                              significant amount of time in the workplace, making it a natural place
                              for learning. For instance, they can participate in informative sessions
                              such as “lunch-and-learns” and receive information via company
                              Intranet sites. Participants discussed the fact that many workers do
                              not currently take advantage of employer-sponsored retirement plans
                              because they either do not earn enough to contribute or they need
                              more financial education to understand the benefits of doing so. They
                              proposed actions that employers could take to support greater
                              savings by their employees—for example, by actively encouraging
                              participation in employer-sponsored retirement plans and providing
                              information on alternatives for employees who may not qualify for an

                          Page 6                                       GAO-12-299SP Financial Literacy Forum
                                employer-based plan, such as part-time staff. Employers could also
                                take steps to facilitate emergency savings for their employees,
                                especially those with lower incomes—for example, by promoting the
                                automatic transfer of a portion of pay into a dedicated savings

                            •   Persuade employers of the benefits of financially literate employees.
                                Two participants said that the business case for employer-provided
                                financial literacy recognizes that stress caused by financial issues can
                                reduce productivity and may increase absenteeism and health care
                                costs for employers. Employers thus have an incentive to take an
                                interest in their employees’ financial health, just as they do in their
                                employees’ physical health through employer-provided health
                                insurance. One participant spoke about a hospital that set up a
                                financial literacy program for its employees to teach them how to buy
                                a home in the local area, and thus benefit from having its workers live
                                nearby. But several participants agreed that employers may need
                                better incentives to take such steps—for example, the government
                                could offer tax incentives for providing financial education to workers
                                or could recognize and honor employers that do exemplary work in
                                financial literacy.

                            •   Establish financial literacy initiatives for government employees.
                                Several participants said that federal agencies should consider
                                establishing financial literacy programs, or enhancing existing ones,
                                for their own employees, as the federal government would serve as a
                                good testing ground and model for financial literacy initiatives
                                undertaken by other employers. GAO was encouraged to “teach by
                                example”—that is, to establish a financial literacy program for its own
                                employees that could be used as a model for other federal agencies.

The Federal Government      Many forum participants said that the federal government had a unique
Can Leverage Its Unique     role to play in promoting greater financial capability. Among other things,
Role to Promote Financial   the government can make use of its “bully pulpit” and convening power,
                            take advantage of existing delivery mechanisms, and support financial
Literacy                    capability efforts through funding, standard setting, and statutory and
                            regulatory changes.

                            •   Use the “bully pulpit” to draw attention to the importance of promoting
                                greater financial capability. Many participants agreed on the
                                importance of having the federal government use its unique position
                                to raise awareness of the need for greater financial literacy and
                                capability. They said the government could enhance ongoing efforts to

                            Page 7                                     GAO-12-299SP Financial Literacy Forum
    bring visibility to the issue of financial capability and to make it a
    national priority. Further, they believed encouraging greater financial
    literacy and capability is an issue that is likely to find support across
    the political spectrum. Some participants also noted the benefits of
    having high-level support from the White House and highlighted the
    President’s Advisory Council on Financial Capability. Others noted
    that First Ladies have often been effective in drawing attention to
    important issues, such as childhood obesity, drug abuse, and literacy.

•   Leverage the government’s convening power. Participants highlighted
    the federal government’s ability to convene the numerous agencies
    and entities involved in financial literacy, noting that the government
    has a powerful ability to bring people together. When a federal agency
    convenes state, local, private, and nonprofit organizations,
    participation is likely to be high because those organizations want to
    be associated with a federal effort. For example, one participant noted
    that private sector organizations were more likely to want to help with
    financial literacy efforts if they were asked by the President’s Advisory
    Council on Financial Capability. This ability to convene the key
    players in the field can also help the government facilitate setting
    shared priorities for research. It can also facilitate the sharing of
    information and best practices on financial literacy among many

•   Take advantage of existing points of contact to deliver financial
    literacy-focused messages. Participants suggested leveraging existing
    distribution channels and points of contact between the government
    and citizens to distribute messages about financial literacy. For
    example, some participants noted that efforts could be made to
    deliver additional financial literacy messages through communications
    from the Social Security Administration, Internal Revenue Service,
    and Centers for Medicare and Medicaid Services that many American
    citizens already receive. One important benefit of this approach is that
    it would entail minimal extra costs to the government. One participant
    expressed regret at the decision to eliminate the Social Security
    statement on an annual basis, which he said would have significant
    negative consequences for financial literacy over the long term. 5

 The Social Security Administration announced in March of 2011 that as a result of budget
cuts it was suspending the provision of annual or other Social Security benefit estimates
by mail.

Page 8                                            GAO-12-299SP Financial Literacy Forum
•   Conduct or fund additional research and data collection to determine
    the effectiveness of financial literacy programs. A number of forum
    participants commented that the federal government should use its
    resources to conduct or fund additional research into program
    effectiveness. They pointed out that there are a variety of small
    programs at the local level, yet it is difficult to know which are most
    effective at serving their intended population. The federal government
    could help identify effectiveness, as suggested by one participant, by
    measuring the impact of programs or policy options for chosen goals,
    such as an increased savings rate. One participant noted that unlike
    other organizations, the federal government may be better positioned
    to collect data that could be useful in evaluating the effectiveness of
    financial literacy programs; some organizations will share data with
    the government that they may not share with other entities. The
    federal government also has a role in funding the training and
    research of scholars and practitioners in the financial literacy field,
    according to one participant, which could positively affect the field at
    relatively low cost.

•   Create standards for financial literacy programs, curriculum content,
    and teacher training. There may be a role for the federal government
    in reviewing, streamlining, or setting standards on the many financial
    literacy curricula available, according to participants. Several voiced
    the need for broad-based standards, or a “gold standard,” for financial
    literacy programs and curricula and for more extensive and
    standardized teacher training. They noted that standardization could
    increase the impact and the scale of small programs that served only
    100 or 200 people. The standards could include key elements of a
    financial education program and core competencies of financial
    education. 6 Participants also discussed the need for better teacher
    training—for example, one participant cited research showing that
    teachers were not comfortable with the financial literacy subject area,
    and another noted that some stakeholders may be looking to the
    federal government to set guidelines for teacher training.

 Federal agencies have already taken several steps to address standards and
competencies. For example, in 2004, the Department of the Treasury’s Office of Financial
Education and Financial Access published a list of the elements of a successful financial
education program, and in August 2010, the Financial Literacy and Education Commission
developed a set of “core competencies” that define what consumers should know to make
informed decisions about their personal finances. The commission’s 2011 national
strategy sets an objective to develop guidelines related to curriculum development,
delivery methods, and other areas that could be used by financial education providers.

Page 9                                            GAO-12-299SP Financial Literacy Forum
                            •   Make legal and regulatory changes to encourage improved financial
                                capability. Participants discussed opportunities for the federal
                                government to review rules and regulations and to simplify and clarify
                                financial literacy programs and products. Some noted that having to
                                choose from a wide array of financial products—such as retirement
                                accounts, custodian accounts, education savings accounts, and 529
                                plans—can be overwhelming to consumers, who could benefit if
                                policymakers rethought, or encouraged providers to rethink, the
                                number and nature of such options, according to one participant. 7
                                Another participant said that the way the Community Reinvestment
                                Act is implemented should be reviewed to ensure that it provides an
                                appropriate amount of support for bank programs that encourage

Opportunities Exist to      Participants highlighted that a great deal of progress has been made in
Increase Coordination and   recent years in increasing coordination and partnerships among federal,
Partnerships within and     state, and local government agencies; private sector entities; and
                            nonprofits. They encouraged further coordination to help conserve scarce
across Levels of            resources and reduce any duplication of effort.
Government and Different
Sectors                     •   Increase coordination and partnership across federal, state, and local
                                government entities. Many participants discussed ongoing efforts, and
                                opportunities, for coordination among federal, state, and local
                                governments. 8 For example, two state officials called for the
                                Department of the Treasury’s help to create a more robust network to
                                facilitate sharing among the state offices. 9 One participant noted the
                                potential coordinating role of the new Bureau of Consumer Financial
                                Protection, while another suggested that the federal government
                                leverage the innovation occurring at the local level by further
                                recognizing and supporting key local efforts. An initiative to connect

                             A 529 plan, legally known as a “qualified tuition program,” is a tax-advantaged savings
                            plan authorized by Section 529 of the Internal Revenue Code and designed to encourage
                            saving for future college costs.
                             GAO has examined successful approaches to federal agency collaboration. See GAO,
                            Results-Oriented Government: Practices That Can Help Enhance and Sustain
                            Collaboration Among Federal Agencies, GAO-06-15 (Washington, D.C.: Oct. 21, 2005).
                             In April 2007, the Financial Literacy and Education Commission created the National
                            Financial Education Network to facilitate and advance financial education at the state and
                            local levels. Among other things, the network has developed a web-based database to
                            share information across entities and held national conferences.

                            Page 10                                            GAO-12-299SP Financial Literacy Forum
                                 the unbanked population with financial services, which other cities
                                 have replicated in a low-cost way, was an example of such innovation
                                 cited by one participant. Another participant suggested creating
                                 financial capability councils at the state and city levels, similar to the
                                 President’s Council on Financial Capability at the federal level, which
                                 could serve as “boots on the ground” to improve efforts both nationally
                                 and locally. Policy changes, like using waivers to access federal
                                 funding, could help state and local governments more easily obtain
                                 federal funds for financial literacy programs, according to another
                                 participant. Two participants noted that more might be done to reduce
                                 unnecessary overlap or duplication among federal financial literacy
                                 efforts—for example, one participant questioned whether an online
                                 financial capability resource provided by the Bureau of the Public Debt
                                 was necessary given the existence of the Federal Deposit Insurance
                                 Corporation’s Money Smart, a comprehensive financial education

                             •   Continue to build partnerships among the governmental, private, and
                                 nonprofit sectors. Some participants noted that these different sectors
                                 would benefit from more of a shared agenda and resources, which
                                 would allow them to more effectively use scarce funds. One
                                 participant noted that nonprofit entities can lead the way in developing
                                 new effective approaches, and another added that nonprofits can test
                                 and prove new concepts and pilot initiatives that are too risky for the
                                 government or private sector. A different participant said that there
                                 needs to be a better infrastructure in place between private sector and
                                 nonprofit organizations to bring those innovative ideas from the test
                                 and concept phase to actual implementation on a large scale. The
                                 nonprofit sector can also benefit from leadership by government or the
                                 private sector to show the value of different approaches. For example,
                                 one participant noted that the nonprofit sector would be bolstered by
                                 government and private sector leadership showing the value of
                                 housing counseling, which some view as a component of financial

Financial Literacy Efforts   The federal government has experience trying to educate consumers and
Can Be Informed by           influence their behavior in areas other than financial matters. During an
Lessons from Other Efforts   afternoon session of the forum, Dr. Linda Harris, the Acting Deputy
                             Director of the Office of Disease Prevention and Health Promotion at the
to Improve Consumer          Department of Health and Human Services (HHS), gave a presentation
Behaviors                    on the department’s efforts to improve health outcomes. Dr. Rajen Anand,
                             the Executive Director of the Center for Nutrition Policy and Promotion at

                             Page 11                                     GAO-12-299SP Financial Literacy Forum
the Department of Agriculture, and his colleague John Webster, spoke
about improving consumer choices about food and nutrition.

Dr. Harris’s presentation described how health literacy—the degree to
which individuals have the capacity to obtain, communicate, process, and
understand basic health information and services to make appropriate
health decisions—is critical to avoiding many negative health outcomes.
She described an HHS working group that developed a national action
plan to improve health literacy. 10 Her agency has also worked to create
an effective website to help consumers make informed choices. Dr. Harris
also explained that the Plain Writing Act of 2010—requiring clear
government communication that the public can understand and use—has
been an important part of a strategy to improve health literacy and

Dr. Anand’s presentation focused on efforts to foster positive dietary
decision making and behavior change. He described a number of factors
that affect consumer behavior around diet and nutrition, including
individual factors such as age, gender, socioeconomic status, race and
ethnicity; environmental factors such as what type of food is available at
school, work, and home; and social and cultural factors such as belief
systems about food, religious traditions, and body image. Dr. Anand also
discussed his agency’s role in the formulation of the “MyPlate” food plate
to replace the food pyramid.

During a question-and-answer session following the presentation,
participants discussed:

•    Parallels between financial literacy and health and nutrition literacy.
     Participants noted similarities between health and financial literacy
     efforts. Both efforts are challenged by how difficult it is to influence
     people to change their behaviors. Also, poor health literacy and
     financial literacy can both have significant negative consequences to
     individuals and families. Finally, both could benefit from a focus on
     prevention—that is, seeking to prevent poor health outcomes or
     financial problems in the first place.

  U.S. Department of Health and Human Services, Office of Disease Prevention and
Health Promotion. National Action Plan to Improve Health Literacy (Washington, D.C.:

Page 12                                           GAO-12-299SP Financial Literacy Forum
•   Possible creation of something akin to MyPlate for financial literacy.
    The Department of Agriculture’s MyPlate provides a visual
    representation of the nutritionally appropriate balance among food
    groups. One participant began a discussion about creating something
    similar to the food plate to emphasize certain key elements of financial
    literacy: earning, saving, investing, borrowing, spending, and
    protecting. Participants discussed the benefits of such an effort, such
    as creating a simple visual reference point for discussing financial

•   Difficulties of measuring effectiveness. Dr. Harris and Dr. Anand
    discussed how research on the effectiveness of their programs has
    been limited but will hopefully increase over time. One participant
    discussed the National Health and Nutrition Examination Survey—a
    program of studies designed to assess the health and nutritional
    status of adults and children in the United States—and the potential
    benefit of such a survey on financial literacy. 11 Another participant
    noted that one difference between financial literacy and health and
    nutrition literacy is that the latter has a large number of researchers
    and an extensive and well-funded body of research and academic
    journals devoted to the topic.

•   Value of the web, social media, and other outreach efforts. Dr. Harris
    and Mr. Webster both discussed online tools their agencies created
    that allow people to enter their age and other information to get
    targeted information about health and nutrition. Mr. Webster also
    discussed how his agency has created a network of more than 4,000
    community partners, including churches and scout organizations to
    help get out the word about good nutrition.

•   Importance of policy changes to supplement literacy efforts. One
    participant described how past campaigns to affect behavior have to a
    great extent been aided by adoption of policies that change incentives
    for behavior, such as laws banning smoking and requiring the use of
    seat belts. The participant also noted that there is little evidence on
    the effectiveness of information campaigns that do not include

  Among the existing efforts that have sought to assess Americans’ financial literacy is the
National Financial Capability Study conducted by the Investor Education Foundation of the
Financial Industry Regulatory Authority, Inc. Financial Capability in the United States,
Initial Report of Research Findings from the 2009 National Survey, A Component of the
National Financial Capability Study (New York, N.Y.: Dec. 1, 2009).

Page 13                                             GAO-12-299SP Financial Literacy Forum
                             accompanying changes in incentives—for example, the impact of the
                             dairy industry’s “Got Milk” campaign on milk consumption is unclear.

GAO Can Play a Role in   During the final hour of the forum, participants shared their views on how
Improving Financial      GAO or the Comptroller General might support or raise awareness about
Literacy                 financial literacy, or partner with others to do so. Participants suggested
                         that, as part of its traditional role in studying federal oversight of financial
                         markets and products, GAO should conduct studies on a number of
                         topics including emergency savings, financial planners, and retirement
                         accounts. In addition, the participants suggested the following:

                         •   GAO could facilitate or conduct research on effective programs. Many
                             participants said that GAO might conduct research—or continue to
                             summarize existing research—on effective approaches and delivery
                             methods to improving financial literacy, and highlight particularly
                             effective programs. Another participant said GAO could help improve
                             the effectiveness of financial literacy efforts by identifying programs
                             that may be duplicative. GAO could also use its ongoing studies to
                             raise awareness of existing data sources and encourage agencies to
                             share such resources. Finally, GAO could highlight best practices,
                             standards, or metrics that could be adopted more broadly.

                         •   GAO could establish a financial literacy initiative for its employees to
                             serve as a model agency. Participants suggested that GAO could
                             develop an employee financial literacy initiative that could be a model
                             for other federal agencies. One participant described efforts in the
                             private sector to create financial literacy curricula for their employees.
                             One focus of such an effort by GAO, said another participant, could
                             be newer staff who may have considerable student loan debt to

                         •   GAO can help identify and encourage opportunities to provide
                             financial education where the federal government is already
                             interacting with individuals. Some participants suggested that as part
                             of its ongoing oversight of federal agencies, GAO could help identify
                             effective access points at which agencies already regularly interact
                             with consumers. For example, GAO could review ways the federal
                             government could better leverage the distribution of financial
                             information already taking place at agencies such as the Internal
                             Revenue Service, the Social Security Administration, and the
                             Departments of Labor and Education.

                         Page 14                                       GAO-12-299SP Financial Literacy Forum
•   GAO should continue to draw attention to the importance of financial
    literacy, including by convening experts. Many participants said that
    GAO should continue to use its unique position to draw attention to
    the issue of financial literacy and convene groups similar to the forum.
    One participant noted that the field will benefit from the Comptroller
    General’s involvement in this topic, while another said it is useful to
    have a neutral third party such as GAO bring together financial
    literacy stakeholders to address the issues.

Page 15                                    GAO-12-299SP Financial Literacy Forum
Appendix I: Forum Agenda

Financial Literacy: Strengthening Partnerships in Challenging Times
A Forum Convened by Comptroller General Gene L. Dodaro
U.S. Government Accountability Office

Thursday, October 20, 2011
8:30 a.m.            Continental Breakfast                                                 McCarl Room, 7C21

9:00 a.m.            Opening Session                                               Staats Briefing Room, 7C13
                     -Welcome                                                                   Gene L. Dodaro
                     -Personal introductions                           Comptroller General of the United States
                     -Overview of agenda

9:20 a.m.            Current and Future Needs, Priorities,                                         Moderator:
                     and Challenges                                                          Barbara Bovbjerg
                                                                                             Managing Director
                                                               Education, Workforce, and Income Security, GAO

10:30 a.m.           Break

10:40 a.m.           Roles, Coordination, and Collaboration                                         Moderator:
                                                                                         Orice Williams Brown
                                                                                            Managing Director
                                                                  Financial Markets and Community Investment,

11:50 a.m.           Break

12:15 p.m.           Working Lunch—                                                                 Moderator:
                     Lessons from Efforts to Influence Other                                      Susan Offutt
                     Consumer Behaviors                                                  Chief Economist, GAO

1:30 p.m.            Break

1:40 p.m.            GAO’s Role                                                                     Moderator:
                                                                                                Gene L. Dodaro

2:30 p.m.            Wrap-up                                                                    Gene L. Dodaro

2:45 p.m.            Adjournment

                                   Page 16                                    GAO-12-299SP Financial Literacy Forum
Appendix II: Forum Participants

Rajen Anand            Executive Director, Center for Nutrition Policy and Promotion
                       Department of Agriculture

Theodore J. Beck       President and CEO
                       National Endowment for Financial Education

Barbara Bovbjerg       Managing Director, Education, Workforce, and Income Security
                       Government Accountability Office

Orice Williams Brown   Managing Director, Financial Markets and Community Investment
                       Government Accountability Office

Judy J. Chapa          Vice President of Community Services
                       The Financial Services Roundtable

Gene L. Dodaro         Comptroller General of the United States

Heidi Goldberg         Program Director, Early Childhood and Family Economic Success,
                          Institute for Youth, Education, and Families
                       National League of Cities

Linda Harris           Acting Deputy Director, Office of Disease Prevention
                          and Health Promotion
                       Department of Health and Human Services

Gail Hillebrand        Associate Director of Consumer Education
                          and Engagement
                       Bureau of Consumer Financial Protection

Jeanne Hogarth         Manager, Consumer and Community Affairs
                       Board of Governors of the Federal Reserve System

Susan C. Keating       President and CEO
                       National Foundation for Credit Counseling

Laura Levine           President and CEO
                       Jump$tart Coalition for Personal Financial Literacy

Annamaria Lusardi      Professor of Accountancy and Economics
                       George Washington University School of Business

                          Page 17                                   GAO-12-299SP Financial Literacy Forum
Cathleen Mahon            Executive Director and Deputy Commissioner
                            for Financial Empowerment, Office of Financial Empowerment
                          New York City Department of Consumer Affairs

Dave Mancl                Director, Office of Financial Literacy
                          State of Wisconsin

Brenda McDaniel           Program Analyst, Financial Readiness Program, Office of Family Policy
                          Department of Defense

Brandee McHale            Chief Operating Officer
                          Citi Foundation

Susan Offutt              Chief Economist
                          Government Accountability Office

Gary John Previts         Distinguished University Professor and Chair, Department
                             of Accountancy
                          Case Western Reserve University

Luke W. Reynolds          Chief, Outreach and Program Development, Division of Depositor and
                             Consumer Protection
                          Federal Deposit Insurance Corporation

Mary Rosenkrans           Director, Office of Financial Education, Department of Banking
                          State of Pennsylvania

Dallas Salisbury          President and CEO
                          Employee Benefit Research Institute

Lori Schock               Director, Office of Investor Education and Advocacy
                          Securities and Exchange Commission

Carrie Schwab-Pomerantz   President
                          Charles Schwab Foundation

David A. Weaver           Acting Associate Commissioner, Office of Retirement Policy
                          Social Security Administration

                             Page 18                                  GAO-12-299SP Financial Literacy Forum
John Webster       Director of Public Affairs, Center for Nutrition Policy and Promotion
                   Department of Agriculture

Lauren E. Willis   Professor of Law
                   Loyola Law School

Joshua Wright      Acting Director, Office of Financial Education
                      and Financial Access
                   Department of the Treasury

                      Page 19                                       GAO-12-299SP Financial Literacy Forum
Appendix III: Related GAO Products

              Financial Education and Counseling Pilot Program. GAO-11-737R.
              Washington, D.C.: July 27, 2011.

              Cost and Legal Authority for Selected Financial Literacy Programs and
              Activities. GAO-11-781R. Washington, D.C.: July 13, 2011.

              Financial Literacy: A Federal Certification Process for Providers Would
              Pose Challenges. GAO-11-614. Washington, D.C.: June 28, 2011.

              Financial Literacy: The Federal Government’s Role in Empowering
              Americans to Make Sound Financial Choices. GAO-11-504T.
              Washington, D.C.: April 12, 2011.

              Opportunities to Reduce Potential Duplication in Government Programs,
              Save Tax Dollars, and Enhance Revenue. GAO-11-318SP. Washington,
              D.C.: March 1, 2011.

              Consumer Finance: Factors Affecting the Financial Literacy of Individuals
              with Limited English Proficiency. GAO-10-518. Washington, D.C.: May
              21, 2010.
              (Spanish Language Summary: Finanzas del Consumidor: Factores que
              Afectan la Educacion Financiera de las Personas con Conocimientos
              Limitados del Ingles. GAO-10-869, August 4, 2010.)

              Financial Literacy and Education Commission: Progress Made in
              Fostering Partnerships, but National Strategy Remains Largely
              Descriptive Rather Than Strategic. GAO-09-638T. Washington, D.C.:
              April 29, 2009.

              Financial Literacy and Education Commission: Further Progress Needed
              to Ensure an Effective National Strategy. GAO-07-777T. Washington,
              D.C.: April 30, 2007.

              Increasing Financial Literacy in America. GAO-07-284CG. Washington,
              D.C.: December 11, 2006.

              Financial Literacy and Education Commission: Further Progress Needed
              to Ensure an Effective National Strategy. GAO-07-100. Washington, D.C.:
              December 4, 2006.

              Credit Reporting Literacy: Consumers Understood the Basics but Could
              Benefit from Targeted Educational Efforts. GAO-05-223. Washington,
              D.C.: March 16, 2005.

              Page 20                                   GAO-12-299SP Financial Literacy Forum
           Highlights of a GAO Forum: The Federal Government’s Role in Improving
           Financial Literacy. GAO-05-93SP. Washington, D.C.: November 15,

           Page 21                                GAO-12-299SP Financial Literacy Forum
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