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June 10th, 2016
Education • Technology • Finance

The National Strategy for Financial Literacy in the US

With a looming pensions deficit and ever more volatile markets, Americans’ lack of financial awareness was a serious problem. The federal government addressed this shortfall by creating the Financial Literacy and Education Commission (FLEC) through 2003 legislation. FLEC was charged with developing a National Strategy for Financial Literacy to spread awareness of personal finance throughout the community.

The initiative

The US government took action in this regard in 2003. “The US Financial Literacy and Education Commission, which was established under Title V of the Fair and Accurate Credit Transactions (FACT) Act of 2003 in order to ‘improve the financial literacy and education of persons in the United States through (the) development of a national strategy to promote financial literacy and education', announced a national strategy for promoting financial literacy in the United States in early 2006.” [2]

The main objectives of the initiatives were to:

  • Encourage government and private sector efforts to promote financial literacy.
  • Coordinate the financial education efforts of the federal government, including the identification and promotion of best practices for financial education.
  • Establish a website,, as a clearinghouse for financial literacy materials and to provide a coordinated point of entry for information about federal financial literacy and education programmes, grants, and other information.
  • Set up a toll-free hotline available to members of the public seeking information about issues pertaining to financial literacy and education."

The challenge

In many developed countries, especially with the crisis in pensions provision, citizens’ relative lack of financial knowledge is an increasingly serious problem. “In an increasingly complex US and global financial system, the recent economic crisis has highlighted the importance of ensuring that individuals and families have access to reliable financial information, education, and tools to make good financial decisions.” [1]

The public impact

In May 2006, FLEC reported on progress:

  • had received over 350,000 hits on its English language site as of April 2006, and almost 13,000 hits on its Spanish language site.
  • “Over 233,000 English publications and over 7,000 Spanish publications were distributed to the public.” [3]
  • The National Strategy for Financial Literacy had been downloaded over 31,000 times in the previous month.
  • In that period more than 3,300 people had participated in the interactive ‘Money 20' quiz.

Stakeholder engagement

The main stakeholder in the National Strategy for Financial Literacy is FLEC, which is responsible for all the information provided, whether online or on the telephone. FLEC has members from all major departments of the federal government, such as the Departments of Agriculture, Defense and Education, as well as financial agencies, such as Commodity Futures Trading Commission and the Federal Deposit Insurance Corporation.

“ also provides links to:

  • “Selected .edu sites maintained by publicly-funded colleges and universities affiliated with the USDA Cooperative State Research, Education, and Extension Service.
  • [Selected].org sites affiliated with government entities such as the Federal Reserve Banks, to ensure that valuable financial information and learning tools are available from sites beyond Federal government agencies.” [4]

There also “several not-for-profit groups, employers, financial institutions, and government agencies who are working in cooperative partnerships at the local, state, or national levels to encourage saving among low- and moderate-income individuals”. [5]

Political commitment

The Commission was established under FACT, a piece of legislation initiated by the Bush administration. Importantly, the Commission is “chaired by the Secretary of the Treasury or designee and currently includes representatives of 21 federal agencies and the White House”. [6] This indicates the high priority the federal government gives to the initiative.

Clarity of objectives

The objectives were clear at the outset: to improve the financial literacy and education of US citizens by developing a national strategy to promote financial literacy and education, with two main distribution mechanisms: a website and a toll-free telephone number. These were maintained throughout – with the growing importance of online resources, is now the main resource that citizens now access.

Strength of evidence

The Commission conducted a review of national strategies and there was also a pilot campaign:

  • "As part of the process, the Commission reviewed national strategies from other nations and other US federal government agencies, and requested input from a wide range of stakeholders in the field of financial education and from the public.” [7]
  • “Congress has charged the Secretary of the Treasury with developing, implementing, and conducting a pilot national public service multimedia campaign to enhance the state of financial literacy and education in the United States ... Using this multimedia strategy, we can begin to build national awareness of the many valuable, free resources that are available to all citizens.” [8]


The legal framework for the strategy was assured by creating FLEC under FACT 2003. One of the logistical problems was to ensure that the large US Spanish-speaking population was well served by the website and the toll-free number. This was addressed by providing bilingual resources.

Another “fundamental challenge to improving financial education centres on reaching those who lack the awareness of the availability of such resources, who may not have the time to improve their level of financial education, or for whom existing information resources are inaccessible or inadequate … Developing a wide variety of effective channels is an important facet of the financial literacy challenge.” [9]


FLEC's management of the strategy involved very senior government figures and organisations:

  • “Congress designated the Treasury Department's Office of Financial Education to lend its expertise and provide primary support to the Commission, which is chaired by the Secretary of the Treasury.” [10]
  • “The Commission convened a working group of 13 Commission agencies to provide significant input into the Strategy, drafted by the Treasury Department.” [11]
  • ”The Commission meetings, public comments, and sector specific gatherings have highlighted the range of issues that are involved. Each Commission member has unique areas of expertise and will promote the various facets of financial literacy that fall within the expertise that resides in each agency.” [12]


FACT 2003 provided for a yearly re-examination of the progress of the National Strategy for Financial Literacy. To evaluate the progress of the initiative, regular research programmes has been conducted by the Commission and by the financial institutions, public and private sector providers of financial education.

The usefulness of was measurable in terms of the number of hits and the number of downloads of the educational material, the toll-free telephone service by the number of calls.

In addition, “ideally, financial education programmes would strive to incorporate findings from academic research that utilise both qualitative and quantitative measures to assess the effectiveness of financial education programmes.” [13]


Title V, Section 514 of the FACT Act states, in part, that the Strategy “shall provide for participation by state and local governments and private, nonprofit, and public institutions in the creation and implementation of such strategy“. Participants from public institutions have, in particular, included academics from public and private universities. “The 2006 National Strategy also included a series of “Calls to Action” for the Commission's members, consumers, industry, nonprofits and other stakeholders and was implemented between 2006 and 2009.” [14]

By establishing one central source for all of these financial literacy and education materials, the federal government ensured that consumers and educators have easy access to accurate, up-to-date, and easy-to-find information and resources on financial matters. “Educators convey financial education concepts as part of core subjects such as math and reading, the Treasury Department and the Department of Education will partner to host a summit focused on financial education integration, teacher training, and related topics.” [15]

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