Why is Financial Education Important in Texas? TCEE Smarter Texas Conference Leilani Lim-Villegas Financial Education Coordinator Texas Department of Banking Dedicated to Excellence in Texas Banking Since 1905 Why is Financial Education Important in Texas? TCEE Smarter Texas Conference Leilani Lim-Villegas Financial Education Coordinator Texas Department of Banking Dedicated to Excellence in Texas Banking Since 1905

Financial Education Mission Statement Bankers – Helping Texans in making informed decisions about budget, credit, asset building budget, credit, asset building and debt management and debt management through financial education.

Financial Education Coordinator Responsibilities Serve as the Department’s point of contact to address financial education issues in Texas. Financial education training for bankers. Provide bankers with financial education tools and materials to take back to their communities.

Financial Education Coordinator Efforts Bank Visits (since May 2006) Financial Education Online Survey for Banks (August 2006) Teach Financial Literacy in Schools and Communities (since January 2007) Statewide Financial Education Workshops (October 2015)

Texas Department of Banking Why Is Financial Education Important?

Financial Education Affects Everyone YouthAdults Senior Citizens

W hy is Financial Education Important? The goal of financial education is to empower consumers to better manage their money, prepare a budget, initiate savings plans, manage debt and make informed decisions about credit and financial products. The goal of financial education is to empower consumers to better manage their money, prepare a budget, initiate savings plans, manage debt and make informed decisions about credit and financial products.

Why is Financial Education Important? (cont’d) More young adults filed for bankruptcy than graduated form college (ABA Education Foundation). Basic money management skills are often lacking in adults today and many parents feel unprepared to teach their kids about money.

Financial Illiteracy: A Vicious Cycle Many teachers are not trained to teach personal finance, and many have never taken a basic economics course. The uneducated about banking services turn to check cashing services or payday lenders to address their financial needs, and pay higher fees.

Texas Department of Banking How Does Texas Rank on Financial Education in the U.S?

How Does Texas Rank? 10 states rank in the bottom, including Texas in both “financial literacy” (39 th place overall) and “financial behavior (44 th ) “Source: Financial Industry Regulation Authority (FINRA), April 2015 Texans are strongest at budgeting and weakest at credit management. Source: Office of Consumer Credit Commissioner, June 2013 Source: Pew Charitable Trusts, Auto Title Loans, March 2015 There are more payday lenders than McDonalds and Starbucks combined. Texas has 2,243 single payment title loan locations, one-fourth of the national market. Average monthly payment is $ Source: Pew Charitable Trusts, Auto Title Loans, March 2015

How Does Texas Rank? (Cont’d) Source: Pew Charitable Trusts, Auto Title Loans, March 2015 Half of those of those auto title loan locations make payday loans as well. Average annual percentage rate in Texas is 306%. Average size title loan is $1,240. Source: Pew Charitable Trusts, Auto Title Loans, March 2015 Source Center for Public Policy Priorities, State of Texas Children 2015, March % of Texas kids live in poverty. Source Center for Public Policy Priorities, State of Texas Children 2015, March 2016 Corporation for Enterprise Development CFED 2015 Assets & Opportunity Score Card, Texas ranks:  47 th in subprime credit  41 st in unbanked households  44 th in student loan default rate  50 th in high school degree attainment  40 th in low-wage jobs

Youth Financial Literacy Is A Priority Research has proven time and time again that personal financial management skills and lifelong habits are best developed during youth, the earlier the better. In 2014, the American Student Financial Assistance Association reported that 55% of college students acquired their of college students acquired their first credit card during their initial year first credit card during their initial year in college, which can lead to the in college, which can lead to the accumulation of excessive debt at an early age. accumulation of excessive debt at an early age.

Financial Education Video Houstonville MicroSociety at Sam Houston Elementary McAllen, Texas

2005 Financial Literacy Bills 2005 Financial Literacy Bills Senate Bill 851 (Sen. Shapleigh) House Bill 492 (Rep. Wooley) Effective September 1, 2005 Requires the incorporation of financial literacy in Texas schools.

MoneySmart –Curriculum covers from banking basics to owning your own home. –Interactive online training available. –Program is translated in several languages. –Free of charge

Building Wealth The Federal Reserve Bank of Dallas Wealth Creation: Learn the Language Budget to Save Save and Invest Take Control of Debt Free of Charge

IBAT Education Foundation  How Community Bankers Can Meet the Texas High School Education Legislative Mandate  Teach the Teacher Seminars

Texas Bankers Association Since 1977, the American Bankers Association and the Texas Bankers Association have worked together through a grassroots network of dedicated banker volunteers to promote financial literacy among all age groups. Since 1977, the American Bankers Association and the Texas Bankers Association have worked together through a grassroots network of dedicated banker volunteers to promote financial literacy among all age groups.

Texas Department of Banking Financial Education Online Survey

Financial Education Online Survey Results (cont’d) 154 Texas Banks Responded to the Survey

Financial Education Online Survey Results

Financial Education Online Survey Results (cont’d)

Financial Education Videos GOODING Funding the Future Live “Coolest Financial Advisors in America” manage.com/track/click?u=5074dca02cd2e74da09ddb51a&id=17c3a96421&e =429f98df6b

Contact Information Leilani Lim-Villegas Financial Education Coordinator (512)