SACRAMENTO- Bipartisan support from the California legislature yesterday sent asset building measures AB 2457 (Salas), the Financial Literacy Fund Bill and, AB 2581 (Bradford), the Banking Development Districts bill, to the Governor's desk.
AB 2457 creates a fund managed by the Controller to use donated money for financial education efforts throughout the state; AB 2581 is a market-friendly initiative encouraging banks and credit unions to develop and invest in areas of the state that lack mainstream financial institutions. Approximately 1.5 million Californians lack a basic bank account, and foreclosure and debt rates have skyrocketed.
Assemblywoman Mary Salas (D-Chula Vista), the author of AB 2457, said "I am pleased AB 2457 has left the State legislature and is on its way to the Governor's desk. Ultimately, the goal of this legislation is to make financial literacy a priority in our state, and thanks to the leadership of my colleagues, we are well on our way to doing so."
"I thank my colleagues in both houses of the legislature for their continued collaboration on this important measure," said AB 2581 author Assemblyman Steven C. Bradford (D-Gardena). "I urge Governor Schwarzenegger to sign this vital measure because there is interest from both financial institutions and local governments to provide financial empowerment opportunities to the unbanked."
The Financial Literacy Fund measure is funded by private donations, not the State. Banks, credit unions, consumer groups, and Lieutenant Governor Abel Maldonado and several State Commissioners for Economic Development back the Banking Development Districts measure.
"In the wake of a recession with record unemployment, there has never been a better time to expand the reach of financial literacy programs," said Controller John Chiang. "We should empower families with the tools needed to make smart financial choices and plan for their futures."
Governor Schwarzenegger, who supported efforts to decrease the estimated 1.5 million 'unbanked' Californians with his 2008 launch of Bank on California, has until September 30 to sign the bills.
"California's mortgage and foreclosure crises, and high personal debt rates, point to the need for increased understanding of financial matters in today's increasingly complex economy," said Olivia Calderon, California Legislative Director of the Asset Building Program at the New America Foundation. "We look forward to working with the Governor's staff in support of these pragmatic initiatives which address these issues and will help improve the financial situation of millions of Californians."
The Asset Building Program, which was instrumental in the creation of the Bank on model and helped take that successful program statewide and nationwide, has long advocated for banking development districts, financial education, and other policies to promote the ability of working families to become financially secure and have a stake in the larger economy.
