Yesterday Secretary Duncan visited historic T.C. Williams High School in Alexandria, VA, to announce a major new partnership with two other federal agencies: the Federal Deposit Insurance Corporation (FDIC), which regulates banks and protects deposits in bank accounts, and the National Credit Union Administration (NCUA), which regulates credit unions and protects deposits in share accounts. The three agencies will work together—and with schools, financial institutions, federal grantees, and other stakeholders—to increase access to safe, affordable, and appropriate deposit accounts at federally-insured banks and credit unions; increase savings; and provide effective financial education.
The day started when Secretary Duncan met with José Cisneros, San Francisco’s Treasurer, who recently launched the “Kindergarten to College” savings program that will provide a college savings account to all students in the public school system. Some years back, Cisneros developed “Bank on San Francisco.” The model has spread to cities across the country and was picked up with the Obama Administration, which recently proposed to create “Bank On USA” with the same goal of providing low-cost deposit accounts and basic financial services to the 25% of American families who don’t currently have regular access to banks or credit unions.
Secretary Duncan then joined FDIC Chairman Sheila Bair and NCUA Chairman Debbie Matz to sign the official interagency agreement that outlines how the agencies will work together before visiting the student-run credit union branch just off the cafeteria. Students from the Academy of Finance who manage the credit union were proud to talk about the work they do and the value of the program in their school. They even gave Secretary Duncan their business cards and encouraged him to open an account!
Upstairs, the press event started with remarks by Alexandria mayor Bill Euille and Jennifer Murphy, a parent participating in the Parent Leadership Training Institute who partners with a local credit union and uses an FDIC financial education program to help the school teach students about managing their money. Later, Euille, Murphy, and the school principal signed a commitment to continue working together on this issue.
Bair, Matz, and Duncan all addressed the audience, which included students from T.C. Williams High School; leaders of banks and credit unions and associations that represent them; education leaders from DC, Maryland, and VA; foundations; and experts in asset development.
Duncan emphasized that this partnership, with its focus on financial literacy and savings for low and moderate income students and families, will help us reach President Obama’s 2020 college completion goal to once again have the highest proportion of college graduates in the world.
Secretary Duncan talked about the lack of financial literacy in this country as a barrier to college access and success, told the audience about research that shows that even low- and moderate-income families can and do save if given access to appropriate accounts and the right incentives, and highlighted work done by Washington University in St. Louis that demonstrates students with a savings account are up to seven times more likely to enter college.
The three agencies have already gotten a jumpstart on implementing the agreement. NCUA has committed funding over the next five years to support partnerships between credit unions and schools; FDIC will soon send a letter to all the banks they regulate encouraging them to develop partnerships; and at the Department of Education, we’ll include a new priority in the 2011 GEAR UP competition to encourage school savings programs in connection with financial education activities. There will be more to come from us, but we’re really hoping that banks, credit unions, schools, federal grantees, local governments, foundations, parent organizations, and others will take the initiative to come together in their states, cities, and towns to develop partnerships that increase access to deposit accounts, savings, and financial literacy, especially among low- and moderate-income students and families.
In the coming weeks, look for more detail on what the agencies will be doing to implement this agreement, including a toolkit for stakeholders who are interested in working together on this important topic. If you have suggestions for youth financial education and savings programs as we’re developing guidance—promising program models, strategies for getting the right people around the table, etc.—feel free to contact me at [email protected].
Office of the Secretary