Women, African-Americans and Hispanics record low scores in financial literacy according to the SEC.
When the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in 2010, it mandated the Securities and Exchange Commission to do a survey of financial literacy among American investors.
The resulting research, released in late 2012, found that even among Americans with money to invest, their understanding of basic financial functions such as compound interest, inflation, and the difference between stocks and bonds was very low.
With that in mind, the AARP (formerly the American Association of Retired Persons) has combined with the National Credit Union Administration to create programs designed to increase financial education and understanding among American consumers.
"Promoting financial literacy is one of NCUA's top priorities and part of the core mission of federally insured credit unions," NCUA Board Chairman Debbie Matz said in a combined press release from the AARP and NCUA. "In an economy that is experiencing rapid change and growing more complex, it is increasingly important for consumers to be educated in order to protect their financial security. AARP and NCUA have a lot of areas where we can work together on these issues."
“By working with organizations like NCUA, we can help ensure that consumers of all ages have the tools they need to manage their money and achieve short and long term financial resilience,'' said AARP Executive Vice-President Nancy LeaMond.
The organizations already have an outline of goals to achieve over the next two years, including initiatives on age-friendly banking, anti-fraud education, and basic financial literacy. Last week at the AARP Ideas@50+ national event in San Diego, the NCUA handed out information to attendees on elder financial abuse as well as its other available information at MyCreditUnion.gov.
The SEC report said there are groups that suffer from financial illiteracy more than others, including women, African-Americans, Hispanics, elderly Americans and those with poor general educational backgrounds.
In conjunction with the Financial Literacy and Education Commission, the SEC outlined its own strategies for affecting financial literacy issues. It suggested increasing education on types of investments, risks inherent in investing, investment fraud and the fees associated with investing.
Kent McDill is a staff writer for Millionaire Corner. McDill spent 30 years as a sports writer, working for United Press International and the Daily Herald of Arlington Heights, Ill. From 1988-1999, he covered the Chicago Bulls for the Daily Herald, traveling with them every day through the nine-month season. He also covered the Bulls for UPI from 1985-88, and currently covers the team for www.nba.com. He has written two books on the Bulls, including the new title “100 Things Bulls Fans Should Know And Do Before They Die’, published by Triumph Books. In August 2013, his new book “100 Things Bears Fans Should Know And Do Before They Die” gets published.
In 2008, he resigned from the Herald and became a freelance writer. The Herald hired him to write business features and speeches for the Daily Herald Business Conferences and Awards presentations.
McDill also writes a monthly parenting column for the Herald’s Suburban Parent magazine.
McDill is the father of four children, and an active fan of soccer, Jimmy Buffett and all things Disney.