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11. Innovation in State Government: Pennsylvania's Financial Education Office

Rene Bryce-Laporte and Hilary Hunt

Financial literacy and financial education have been in the public dialogue for two decades. The story takes many forms: woeful student test scores, a housing foreclosure crisis, skyrocketing credit card debt, bankruptcy reform, negative savings rates, working-poor families, and too many others to name – all major community development issues. The chorus of voices calling for increased financial education is diverse: educators, policymakers, activists, civic leaders, and parents. What is less clear, however, is who should do what to ensure that America becomes more financially literate.

Under Governor Edward G. Rendell, Pennsylvania determined that there is a warranted, significant, and valuable role state government can play to help improve the financial knowledge and skills of its citizens. In addition to elevating the quality of life for Pennsylvanians, the state's leaders believe that an increasingly financially literate citizenry will also result in a more vibrant economy and reduced reliance on costly state-provided services. In April 2004, the Pennsylvania Office of Financial Education (POFE) was created.

The origin and operation of POFE was largely shaped by three factors: a long-standing interest in asset-building issues by an influential legislator from Philadelphia; the appointment of a new, activist banking secretary; and the fact that the same executive order was used to create both the Governor's Task Force for Working Families (TFWF) and POFE.


Dwight Evans, chairman of Pennsylvania House of Representatives' Appropriations Committee, represents an urban district that includes the West Oak Lane section of northwest Philadelphia, which is 95 percent African American and middle to lower class. Throughout his elected career, Evans has been deeply involved in community and personal asset-building issues. In 2003, Evans worked with the National Conference of State Legislatures, the Annie E. Casey Foundation, and the Corporation for Enterprise Development (CFED) a national economic develoment think tank – to develop a framework for a public dialogue to identify realistic ways state government can help working families in tight budget times.

A. William Schenck III was appointed Pennsylvania's Secretary of Banking in 2003. A well-respected career banker, Schenck had no professional government experience prior to assuming this public-sector leadership position. During his first several months in office, however, it became clear to him that state government could and must do a better job of protecting consumers of financial service providers in Pennsylvania's financial marketplace. Stricter oversight and better enforcement was necessary, to be sure. But given the complexity of the financial marketplace and the lag between product innovation and financial regulation, among the best ways to protect consumers, Schenck thought, was to help them gain knowledge and skills so they would have a better shot at protecting themselves.

In October 2003, Schenck participated in a meeting hosted in Philadelphia by Evans to consider asset-building and protection strategies. They discussed ways this work could be valuable on a statewide basis, and they took their ideas to Governor Rendell.

In his February 2004 budget address, Governor Rendell announced the appointment of a Helping Working Families Task Force. On April 29, 2004, the governor made good on that pledge by issuing executive order 2004-7, which established the governor's TFWF and created POFE to be housed in the Pennsylvania Department of Banking. Evans and Schenck were named co-chairs of the TFWF, and Hilary Hunt was hired by Schenck and the Banking Department to develop the state's freestanding POFE. Her first task – which would consume nearly a year – was to assist Schenck in his role as co-manager of the task force.

Sixty-three people (and sixty-two alternates) were invited to sit on the TFWF. Senior-level representatives from state government, financial entities, educational institutions, community groups, business associations, unions, and other organizations invested their time and lent their expertise to the task force. The governor charged members with identifying strategies to build the incomes and assets of working families, promoting financial education, and protecting families from abusive financial services. He was interested in receiving recommendations about how Pennsylvania could help working families in tight budget times without duplicating the state's existing economic stimulus, workforce development, health care reform, manufacturing modernization, or mortgage foreclosure prevention efforts.

The task force organized into four subcommittees and held twenty-four public meetings across the state. The meetings were spirited, and a wide array of topics was brought to the table – everything from mass transit systems to dental health issues to entrepreneurship factors. The one topic discussed at every meeting was financial education.

There was a resounding call for increased financial education in the schools, but despite the passion behind the call, it was widely recognized that – even if Pennsylvania's governance structure could require it and even if schools started teaching personal finance immediately – such an investment might well take more than a decade to yield results. Subsequently, much additional discussion centered on ideas and challenges associated with reaching adults. The conversation also included frustrations voiced by community-based financial education providers who acknowledged that their classes were often undersubscribed or empty.

The task force worked for months and submitted a comprehensive analysis to the governor in January 2005 ( With regard to financial education, however, recommendations endorsed by consensus of the task force included connecting working families to quality financial education by

• Establishing, maintaining, and marketing a clearinghouse with information about financial education resources, income supports, and savings programs.

• Integrating financial education in the curricula already taught in K-12 schools.

• Expanding community-based financial education and counseling.

• Helping employers provide financial education in the workplace.

• Encouraging financial professionals to volunteer in financial education efforts.

• Conducting a long-term study to find out which education strategies are effective.

When the report was issued, POKE had, structurally, existed for nearly one year. However, rather than working to develop its own programming, the office's sole staff person was largely engrossed by facilitating the financial education subcommittee of TFWF.

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