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Not surprisingly, it also influences profoundly how we have chosen to tackle the important issue of financial education.

Several years ago, we undertook a major corporate initiative to develop a financial education program. Following the Capital One method of doing business, we started by surveying the market to assess the delivery and methodology used by existing financial education programs. Our research revealed a high level of activity using a wide variety of approaches. While looking for information regarding best practices, we found limited understanding of what types of programs were most effective for which populations. We read training materials that were attractive visually, but we wondered if the language used was too complicated to reach the target populations. We also found quality materials without an effective method for getting the materials to market. Finally, we observed a limited amount of measurement and evaluation in the programs to assess their effectiveness.

As a result of our research, we initially decided to focus on those most in need— lower-income and underbanked populations. We spent time thinking about two key goals: First, how to develop content that would be read and understood; and second, how to develop a delivery method that would effectively reach our targeted populations. As a result, we decided the best approach would be to find a strong nonprofit organization with whom we could partner-an organization that would bring expertise in materials development and have existing relationships with communitybased organizations who are best situated to reach underserved communities. Capital One Has Formed a Partnership With Consumer Action

Following the research and development of our program goals, we contacted Consumer Action (CA) to discuss the feasibility of developing a partnership related to financial education for lower-income communities. Founded in 1971, CA has a long history and strong record of work in this area. Because CA is an umbrella organization whose membership includes more than 7,000 community-based nonprofit organizations throughout the country, we were confident that delivery of the materials to reach our target consumers could be achieved.

Since beginning our partnership, we have developed a highly effective collaboration that has produced measurable results. Capital One has donated approximately $1.25 million to create and implement MoneyWi$e, a program that offers straightforward, easy-to-read information to address financial responsibility. Together, we have created a four-part series of MoneyWi$e educational materials that provide the building blocks for developing and honing personal finance skills. These four brochures focus on key financial education issues, including:

Building Good Credit-Explains what credit history is, what a credit report is, how to get your credit report, how to establish good credit, and where to complain if you have a problem.

Credit Repair-Explains why having good credit is important, your rights if your credit application is rejected, how to check your credit report, how to dispute mistakes on your credit report, and how to begin to rebuild good credit.

Basic Banking-Discusses the fundamentals of banking, from opening a bank account to balancing a checkbook, and includes tips for resolving problems such as mixed up deposits and bounced checks.

Basic Budgeting-Explains the importance of wise money management, including budgeting, balancing your checkbook, cutting back on expenses, and ways to spend less and save more.

Capital One's financial support of this program ensures that these materials are provided to nonprofit organizations and consumers free-of-charge. In addition, we feel it is critical that they be offered in multiple languages to ensure that we reach immigrant groups, many of which have had negative experiences with banks in their home countries and are vulnerable to unscrupulous financial service providers. The materials are available in four languages in addition to English including Spanish, Chinese, Korean, and Vietnamese. Through CA, materials are available to their membership of their more than 7,000 community organizations nationwide, as well as directly to consumers via mail or the Internet. I am proud to report to date the distribution of these multilingual materials totals more than 1 million brochures. Our plans for later this year include creating and distributing information on two additional topics: The first is a guide for parents on talking to teens about money and the second is about understanding bankruptcy.

Capital One and CA also joined forces to develop a "train-the-trainer" program for community-based organizations. We liked this approach because it enabled us to leverage the talents of other organizations to achieve a higher impact at the local level. Together with CA, we were able to develop curricula that focus on the key issues contained in the brochures. The results have been phenomenal. To date, more

than 800 nonprofit organizations across the country have requested the information. They have included a wide variety of types of organizations such as university cooperative extension offices, consumer credit counseling service organizations, and community development corporations.

During the fall of 2002, Capital One and CA co-sponsored Statewide meetings in Tampa, Florida and Oakland, California to train the leaders of nearly 75 community-based organizations in each location to use the MoneyWi$e materials in their communities. The 2-day meetings included sessions to review the materials and train participants on teaching adult populations. They were interactive and included many hands-on activities designed to reflect real-life situations. A follow-up survey on the training sessions found a high satisfaction level among participants. We have two additional meetings planned for later this year; one meeting will take place in Dallas and serve agencies throughout Texas and the other will take place in the District of Columbia and serve agencies in the metropolitan area.

We have also strengthened the program by offering stipends to 18 nonprofit organizations around the country that are starting to teach financial education to their constituents the grants provide them with the funding they need to staff and provide additional resources. We anticipate reaching approximately 60,000 consumers through the reach of the program.

This month, the MoneyWise partnership received the Achievement in Consumer Education award by the National Association of Consumer Agency Administrators. We Have Engaged the Talent of our Employees To Deliver Financial Education to our Local Communities

Capital One believes in the value of employee involvement in community service. We have a long-standing focus on company-sponsored volunteerism in the areas of youth-at-risk, education and community development. Therefore, it made sense to incorporate financial education into our volunteer activities as we were developing our program.

Trained by CA and equipped with materials and a training/curriculum manual, Capital One employees pilot-tested this approach in its home communities of Richmond and Northern Virginia. Our volunteers have contributed approximately 250 hours to teach the information to constituents of several nonprofit organizations. Because of the overwhelmingly positive response from employees, the program is being expanded to other Capital One sites around the country.

Capital One Focuses on Youth Through Its Partnership With JumpStart

Five years ago, to align our financial education program with our philanthropic focus on helping youth-at-risk, we joined JumpStart. The premise behind our support of this program is simple: We believe in their mission to teach financial education in the public schools. And the most effective method for reaching a wide population, including lower-income children, is through a public education program.

Based on this belief, we provided financial support for the integration of JumpStart's Money Math curriculum into the Virginia school standards. Through this effort, we hoped to provide another tool that Virginia teachers can use to teach their students about personal financial management. At a press conference last Spring, the U.S. Department of the Treasury's Office of Financial Education recognized Capital One for this effort.

Targeting and Reaching College Students

There has been a tremendous amount of concern expressed about college students and the need for financial education. Capital One shares this concern and has developed a unique method to reach this population. Specifically, we decided to experiment with a method that utilizes students' relationships with their peers. Last year, we piloted MoneyWise for College Students, a "train-the-trainer" program that teaches college students how to become "money mentors" and deliver personal finance curricula to other students at their colleges or universities.

MoneyWi$e for College Students is a program whereby student leaders use their influence to educate fellow students about how to make informed credit decisions. Currently, the program is delivered on three college campuses including the University of South Florida, Texas A&M University, and Washington State University. Because of the success of this test, we are currently in talks to expand the program to additional universities this coming fall-we have received interest from the University of Maryland, Pennsylvania State University, and the University of Alabama. The workshops cover a broad range of topics from how to maintain a checking account to understanding credit reports. In addition, students attending the workshops receive informational brochures focusing on basic money management. Capital One sets up a page on the website of participating universities that links to

Visa's Practical Money Skills. The training program results reported by participating students has been impressive:

• 100 percent would recommend the program to other students.

• 100 percent reported that the program improved their understanding of basic money management concepts.

• 84 percent indicated that the program taught skills and concepts that were new to them.

• 95 percent rated their impression of Capital One and Visa as "very or somewhat positive."

We Encourage the Media To Report on Financial Topics To Help Educate the Public Capital One has sought to utilize the media to provide the public with tools to better manage their finances. All of our fact sheets are available on our website's press center, and serve to encourage reporters to write stories on these topics. Earlier this summer, we ran an auto buying campaign that advised consumers to prepare carefully before buying this big-ticket item. This campaign made 26.8 million impressions and was covered by print, television, and radio reporters.

Other campaign efforts have focused on key life events: (1) The back-to-school shopping ritual and importance of parents explaining to their kids how to budget; (2) what newlyweds need to be aware of when they first tie the knot; (3) budgeting for the holidays; and (4) staying fiscally fit, in general.

Financial Services Industry Continues To Increase Its Focus on Financial Education Thankfully, we are not alone in our efforts. According to the Consumer Bankers Association (CBA) annual survey on financial literacy, the number of financial institutions sponsoring or partnering on financial education initiatives continues to increase year after year. Not surprisingly, these programs have focused on the most vulnerable segment of consumers.


The CBA survey confirmed that there is a strong effort among banks to advance personal finance skills among youth. Seventy-seven percent of responding banks indicated that they offer financial literacy programs for students in grades K-12, organizations like Jump$tart, the national "Adopt-a-School" program, and employees/student mentoring. At the post-secondary level, 26 percent of financial institutions offer financial education programs on college campuses.

The Unbanked

For the first time, CBA polled banks on their efforts to address the financial services needs of the unbanked. Seventy-four percent of responding institutions indicated that they offer Individual Development Accounts to such consumers. Fiftyseven percent of responding banks indicated that they have developed a personal finance program or initiative specifically designed for unbanked consumers. Recent Immigrants and Multilingual Consumers

In addressing the particular needs of a major segment of the unbanked population-immigrants and non-English speaking consumers-70 percent of responding banks indicated that their institution provides financial education programs, basic banking literature, or educational brochures in a foreign language, primarily Spanish. Particular attention is being paid to small business development, which has shown a significant upward trend in the percentage of banks offering such programs. This year, 79 percent of responding banks indicated that they sponsor or partner on programs aimed at providing small business development assistance. Conclusion

At Capital One, we believe in the principle that knowledge is power. It is that power that will enable the American consumer to make better choices about their personal finances.

Our products work best if our customers manage their finances responsibly. Put another way, the less our customers know, the more likely they are to find themselves in financial trouble. When these customers cannot pay their bills, we bear the loss. Higher losses in turn, leads to higher costs for everyone. For Capital One, "educated consumers"-customers who know the annual percentage rate they are paying, who know when their bills are due, and who know and understand how to manager the products we offer-are our best customers.

Mr. Chairman, Ranking Member Sarbanes, and Members of the Committee, thank you again for the opportunity to testify before you. I would be happy to answer any questions you may have.


Q.1. I have introduced S. 1470, the Financial Literacy and Education Coordinating Act. What are your views on this legislation? A.1. The development and adoption of a national strategy for improving financial education and knowledge in this country is a significant public policy undertaking, and the proposal for a Financial Literacy and Education Coordinating Committee merits strong support. A committee of decisionmakers from across the spectrum of Federal agencies will bring high-level visibility to the Government's promotion of financial education and knowledge for all Americans. Drawing State and local agencies, along with private-sector organizations from industry and the nonprofit world, into the collaborative-consultative process adds an important dimension to the undertaking.

While collaboration among agencies already takes place, having a formal mechanism for the development and coordination of a Federal strategy would strengthen the process in a number of ways. It would facilitate the sharing among agencies and others of information on financial education activities; promote interest in and support of needed research for testing the effectiveness of different approaches to personal financial education; and foster increased engagement in financial education initiatives. Coordination through the Committee also could help minimize duplicative efforts at all levels, and assist in directing agency resources to where they are most needed or where they can be most productive.

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