Operation HOPE Blog

Sacramento Legislator Ted Lieu Gets It!

Concerned that the current mortgage crisis is partly driven by a lack of public understanding about basic finances, an astute Torrance lawmaker and supporter of Operation HOPE has crafted a bill to increase the financial literacy of Californians.

Assemblyman Ted Lieu’s plan calls for the state to provide free financial consulting services to low- and middle-income Californians. The bill would also create an online library of financial literacy materials to provide multilingual information on concepts such as credit scores, compound interest and credit card applications.

State Controller John Chiang, whose office would administer the program, said he has observed the same deficiencies when he has visited schools in California. “As I speak to young people, they don’t seem to get the same home economics courses that some of us had when we were growing up,” Chiang said. “(Concepts like) how to write a check and simple vs. compound interest seem to be lost in their curriculum.”

Because the state is facing a budget crisis, the program will mostly rely on donations and volunteer efforts. The financial consulting would be provided by professionals who volunteer their time to a new California Financial Services Corps.

Lieu said that if more homeowners understood the terms of mortgages and the calculations involved in deciding which one to purchase, they might not have overextended themselves. “If people had more financial literacy and education, a portion of these problems would have decreased,” Lieu said.

The volunteers would generally limit their advice to loans and other financial transactions under $10,000. The state would also establish a California Financial Literacy Fund to collect donations from nonprofit organizations to pay for the other services, such as the Web site and a toll-free hotline.

Article by Daily News writer Harrison Sheppard

This entry was posted on Thursday, February 21st, 2008 at 12:40 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.