Senate Concurrent Resolution No. 15

Introduced by Senator Lieu

February 25, 2013

Senate Concurrent Resolution No. 15—Relative to financial literacy.

LEGISLATIVE COUNSEL’S DIGEST

SCR 15, as introduced, Lieu. Financial Aid and Literacy Month.

This measure would declare April 2013 as Financial Aid and Literacy Month to raise public awareness about the need for increased financial literacy.

Fiscal committee: no.

WHEREAS, Studies reviewed by the Library of Congress
indicate that United States retail investors lack basic financial
literacy, including a weak grasp of elementary financial concepts
and a critical lack of knowledge of ways to avoid investment fraud;
and

WHEREAS, Sixty-two percent of women and 53 percent of
men would have less trust in someone if they found out that the
prospective partner was in serious debt; and

WHEREAS, Sixty-eight percent of adults believe that sharing
the same attitudes toward managing money is the most important
factor in a relationship; and

WHEREAS, Sixty-nine percent of parents expect their children
to contribute financially to their college education, and the same
percentage of parents expect that they or their children will be
paying student loans off for at least five years after graduation;
and

WHEREAS, More than half of teenagers say they want to learn
more about how to manage their money, especially about basic
personal finance topics such as budgeting, saving, checking
accounts, and investing; and

WHEREAS, Fifty-six percent of United States adults admit that
they do not have a budget, and 77 million American adults do not
pay all of their bills on time; and

WHEREAS, Outstanding student loan balances increased to
$956 billion as of September 2012, and the size of the average
student loan since 2005 has risen by 58 percent to $27,253, with
a delinquency rate of 15.1 percent; and

WHEREAS, As of September 2012 about $1.01 trillion of
American consumer debt is delinquent, with $740 million seriously
delinquent; and

WHEREAS, There are 382 million open credit card accounts
and balances on these cards increased by approximately $2 billion
in the third quarter of 2012; and

WHEREAS, Forty percent of low- and middle-income
households use credit cards to pay for basic living expenses such
as rent or mortgage bills, groceries, utilities, or insurance because
they did not have enough money in their checking or savings
accounts; and

WHEREAS, Nearly half of low- and middle-income households
carry debt from out-of-pocket medical expenses on their credit
cards, with the average amount of medical credit card debt being
$1,678; and

WHEREAS, Approximately 11 percent of United States
consumers are unbanked, and another 11 percent are underbanked,
and these unbanked and underbanked individuals are more likely
than fully banked consumers to have lower incomes and be
younger, minority, female, unmarried, unemployed, and unwilling
to take financial risks; and

WHEREAS, The State of California leads the nation in terms
of personal debt per capita, and also leads the nation in the
delinquency status of debt balance per capita; and

WHEREAS, One-quarter of those participating in 401(k) plans
withdraw funds to cover nonretirement costs, such as school tuition,
mortgages, and credit card payments; and

WHEREAS, Forty-four percent of retired worker beneficiaries
who claimed social security benefits in 2011 were 62 years of age,
thus severely diminishing their overall benefits through the
remainder of their lives; and

WHEREAS, Nineteen percent of workers are not at all
comfortable in their financial preparations for retirement; and

WHEREAS, Twenty percent of workers and 12 percent of
retirees report their level of debt is a major problem; and

WHEREAS, In 2012, 62 percent of 45 to 60 year olds reported
at least a 20-percent decline in the value of their financial assets
since the start of the most recent recession, up from 42 percent in
2010; and

WHEREAS, Fifty-one percent of military families who have
completed a financial literacy program are more likely to feel
extremely or very financially confident when it comes to dealing
with financial matters than those who never completed a financial
literacy program; and

WHEREAS, Baby boomers who grew up in households where
parents talked about money management and saving for retirement
are significantly more likely to be financially prepared for
retirement (42 percent) than unprepared financially (29 percent);
and

WHEREAS, According to the 2012 Junior Achievement
USA/Allstate Foundation “Teens and Personal Finance” survey,
86 percent of teenagers turn to their parents for money management
advice, and yet just 56 percent of them think they will be as
financially well-off or better than their parents; and

WHEREAS, Only 24 percent of teenagers learn how to manage
money from teachers; now therefore, be it

Resolved by the Senate of the State of California, the Assembly
thereof concurring, That the Legislature hereby declares April
2013 as Financial Aid and Literacy Month to raise public awareness
about the need for increased financial literacy; and be it further

Resolved, That legislators, employers, schools, service groups,
community organizations, libraries, financial institutions, and the
media shall be encouraged to provide opportunities for financial
literacy education for all Californians through a variety of means
and to collaborate with members of the California Society of
Certified Public Accountants, the California Jump$tart Coalition,
and others as they provide outreach and education; and be it further

Resolved, That the Secretary of the Senate transmit copies of
this resolution to the author for appropriate distribution.