Memo

To: Members of the Financial Literacy Public Private Partnership

From: Representative Sharon Tomiko Santos, FLPPP Chair
Re: 2008 Financial Literacy Legislation and Funding Requests

This memo intends to briefly outline the various pieces of legislation and budget items
that were introduced and passed into law this past session that pertains to financial
literacy efforts.

I am also including the seven Consumer Education and Financial Literacy

recommendations developed by the Governor’s Task Force on Homeowner Security that
was presented to the legislature before the start of the 2008 legislative session.

1. Legislation

HB 2829 (Kelley) SB 6272 (Berkey) – One of the two Governor’s request legislation on
homeowner security that would have the Department of Financial Institutions (DFI)
establish, administer, and implement financial literacy and education programs. These
would include but not be limited to: “(1) Education and outreach programs that assist
Washingtonians in understanding saving, investing, and budgeting, and other skills
necessary to obtain individual financial independence, fiscal responsibility, and financial
management skills. (2) Counseling, marketing, and outreach programs regarding
residential mortgage transactions, nontraditional or subprime mortgages, predatory
lending practices, or other financial products or practices in the marketplace relating to
homeownership.”

The DFI would also convene an interagency workgroup to identify current state funded
efforts to support financial literacy, assess whether there are opportunities to create a
centralized location of information regarding these existing state efforts, and to identify
whether there are opportunities for expanding partnerships with other community entities
also providing financial literacy services. (SB 6272 Signed into law)

HB 2898 (Darneille) - The Washington asset building coalition (WABC) is created. Its
mission is to provide statewide leadership on initiatives that foster financial self-
sufficiency and economic security for low-income working families and foster youth. The
WABC shall work with CTED, community asset building coalitions, and other public and
private sector partners to perform and execute a number of duties, specifically expanding
financial literacy opportunities and outcomes. The legislation had a $2m budget
appropriation for the Individual Development Account program. (Not signed into law)

HB 3164 (Kelley) – The homeownership security account is created and the DFI may
provide funds from the account for the establishment, administration, and implementation
of financial literacy and education programs, including but not limited to:
(1) Education and outreach programs that assist Washington citizens of all ages in
understanding saving, investing, budgeting, and other skills necessary to obtain
individual financial independence, fiscal responsibility, and financial management skills.

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(2) Unbiased information and counseling regarding residential mortgage transactions,
nontraditional or subprime mortgages, predatory lending practices, gap financing and
down payment assistance programs, or other financial products or practices in the
marketplace relating to homeownership.

This legislation would also allow private or nonprofit organizations to deposit funds in
the homeownership security account. More than fifty percent of the funds from this
account must be used to assist low and moderate-income persons. (Not signed into law)

HB 3221 (Santos) – A financial services intermediary would be created to improve the

ability of low-income individuals to access and use mainstream financial products offered
by financial institutions. Some of the primary duties of the intermediary are as follows:

• improve the ability of low-income individuals to access and use mainstream financial
products offered by financial institutions;
• identify strategies to make more mainstream financial products available to low-income
individuals;
• coordinate with financial institutions to leverage the financial resources of low-income
individuals to offer mainstream financial services to those individuals; and
• consult and cooperating with organizations and government agencies that are already
engaged in asset building and financial literacy activities. (Not signed into law)

2. Budget

Homeownership Counseling - Senate Bill 6272 bill was the first bill signed into law this
session and also had a $1.5m appropriation specifically designated for homeowners pre-
purchase and post-purchase counseling and support. $700,000 was allocated for fiscal
year 2008 and $800,000 is allocated for fiscal year 2009.

3. Governor’s Task Force on Homeownership Security Consumer Education and

Financial Literacy Recommendations:

1. The State fund the expansion of financial literacy through established networks in the
workplace, community organizations, state and local government agencies, our state’s K-
12, community college and higher education systems, and other organizations. (Not
developed into legislation)

2. The incorporation of financial literacy in our K-12 schools as part of our Washington
Assessment of Student Learning (WASL) curriculum. (Not developed into legislation)

3. Using available state government information resources to provide a centralized

location for consumers to obtain financial literacy and counseling information, including
the linking of all state Web sites with financial education information from a single
designated location. (Included in HB 2829 & SB 6272 – Section 3)

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4. Forming and utilizing partnerships with local private sector resources, community
coalitions such as the Washington Asset Building Coalition and government to promote
financial literacy. (Included in part of the requirement of HB 2898 – Section 3)

5. Increasing private and public sector funding for financial literacy from a variety of
local, state, federal and private sources. (Included in HB 3164 – Section 3 and SB 6272
Section 4)

6. Washington should demonstrate leadership by developing, in concert with public,

private and education sector partners, a standard, national definition of financial literacy
to be used across all segments, along with nationally standardized, qualitative and
quantitative measures to evaluate the short and long-term impact of financial education
programs. (In the 2006 Interim FLPPP report the group defined financial literacy as:
“…[t]he achievement of skills and knowledge necessary to make informed judgments and
effective decisions regarding earning, spending and the management of money and
credit.”)

7. Providing greater financial and other support for the mission and goals of the
Washington Financial Literacy Public Private Partnership. (No additional funding or
legislative requirements given to FLPPP in 2008)

8. Encouraging federal regulators to classify substantive financial literacy outreach

efforts as “innovative” and “responsive” for the federal Community Reinvestment Act
purposes. (Not developed into legislation, but DFI sent letter to federal banking
regulators. Please see attached pdf documents)