Assembly Sends Lieu's Financial Literacy Bill To Governor

(Sacramento, CA) – The State Assembly today gave final approval to AB 1950 by Assemblymember Ted Lieu (D-Torrance), which enables school districts to provide personal financial education to 7th through 12th graders. More specifically, this bill encourages that students be taught consumer economics, budgeting, savings, credit management and identity theft prevention. The bill will now go to the Governor.

“Young people today are making serious financial decisions,” said Assemblymember Lieu.

“Many teenagers now have credit cards, ATM and debit cards, and bank accounts. We need to equip them to handle their money wisely.”

Lieu pointed to a recent Nellie Mae analysis that found that 76% of college undergraduates had credit cards, and those students had, on average, 4 credit cards each. The analysis showed that the average outstanding credit card debt was over $2,100, and over a quarter of those students had debt of more than $3,000.

AB 1950 will encourage school districts to offer instructions on the financial consequences of misuse of credit, developing good budget practices, creating solid financial and savings plans, protecting their assets, fully comprehending the cost of borrowing, and protecting themselves from identity theft.

AB 1950 will also encourage the State Department of Education to work with financial institutions and organizations in developing a model curriculum that school districts can use to implement the bill.

“I would like to see our schools give kids a head start on good financial management,” said Lieu. “If they develop good habits today, hopefully they will last a lifetime.”

AB 1950 has support from a diverse coalition of organizations, including the California State PTA, the California School Boards Association, the California Bankers Association, and Operation Hope.

Governor Schwarzenegger will now have until September 30th to sign the bill.