Making the case for financial capability
By Mike Rothman, Commissioner of the Department of Commerce
Growing up in a single parent home, I watched my mother slowly build her financial security – graduating from the U of M with a teaching degree and eventually moving us from a public housing project just off University Avenue in Minneapolis to a family home in Chaska. Her struggles and accomplishments ingrained in my mind the lifetime value of financial empowerment.
I was fortunate at a young age, as a student at Pratt Elementary School in Minneapolis, to have learned how to open a financial account and appreciate the virtue of savings. Of course, I didn’t save much at the time -- just dimes and quarters. But the life lesson it instilled in me was invaluable.
I was amazed at how I could earn interest on the money I saved. For me, coming from a family of modest means, the value of compound interest seemed almost like magic. But mastering this mystery was an important early step forward on my own journey to financial capability.
Today, as Commerce Commissioner, a key part of my job is to advocate for Minnesota consumers who may find themselves struggling with a confusing and potentially risky financial marketplace. People who may already be burdened by crippling debt, a poor credit history or a lack of savings can become vulnerable to scams and predatory lending schemes that promise easy money but only push them deeper underwater.
The Commerce Department is here to help Minnesotans and serve as a watchdog to make sure they are treated fairly in the marketplace. But we also want to empower people so they are better able to protect themselves and their financial well-being and build financial capability.
A lack of financial capability can be costly. The National Financial Educators Council recently released the results of a survey asking people of all ages how much money they thought they lost due to a lack of knowledge about personal finance. The answer was an average of $9,700 -- which amounts to collectively $2.3 trillion dollars over a lifetime when spread across 240 million adults in the United States.
When I see numbers like this, it confirms my strong belief in the value of financial capability and the need for financial empowerment.
For each of the past six years, during April as Financial Capability Month, I have convened a roundtable that brings together stakeholders from nonprofits, business, education and government to identify strategies to improve the financial capability of every Minnesotan. Our past keynote speakers have included Congressman Keith Ellison and Richard Cordray, director of the U.S. Consumer Financial Protection Bureau.
This year’s Roundtable will feature a keynote presentation by Dr. Steve Hine, director of the Labor Market Information Center at the Minnesota Department of Employment and Economic Development (DEED). He will describe the major demographic and economic trends shaping our state’s future and what they mean for Minnesotans’ financial capability.
To address how state agencies can strengthen Minnesotans’ financial capability, a panel discussion will follow with Human Services Commissioner Emily Johnson Piper, DEED Commissioner Shawntera Hardy, Office of Higher Education Commissioner Larry Pogemiller and Housing Finance Assistant Commissioner Kasey Kier.
A second panel discussion will focus on the role of community-based resources to support financial capability. The Roundtable will conclude with a poster session featuring the work of agencies and organizations to build financial capability, like Prepare + Prosper.