September 28, 2014 Cook County, Illinois filed suit against Wells Fargo, the nation’s largest mortgage lender, claiming over $300 million in damages. The suit alleged that Wells Fargo’s unethical practices unfairly targeted low-income, minority families and contributed to the housing crisis that left the city with abandoned buildings and million of dollars lost in property taxes. The banking institution was accused of knowingly distributing home loans to black and Hispanic customers, many of whom would not have been able to qualify for traditional loans, with high interest rates and ridiculous fees in order to strip the borrowers homes of equity and eventually lead to the borrower having to foreclose on their homes and possibly other property.
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Financial literacy allows those individuals or family units to understand money and the way it works, responsibly obtain, spend, and budget said money, and take into account future need as well as risk. In the study conducted by J. Michael Collins (Assistant Professor of Consumer Science at the University of Wisconsin–Madison, Faculty Director of the Center for Financial Security, and an IRP affiliate) on the effects of mandatory financial education for low-income clients 144 low-income clients in need of housing vouchers were placed into two groups: a treatment group and a control group. The treatment group was instructed to take the required financial literacy courses within a year of enrollment. The control group was barred from taking the required financial literacy courses until after a year had passed. The goal of the financial fitness program was to provide access to basic banking services, increase client savings, help repair damaged credit, and teach budgeting. The study resulted in findings that proved that financial literacy education is in fact analogous with improvements in financial behavior amongst the low-income clients. After completing the program the clients who participated in the treatment group experienced a significant raise in savings balances, a slight decrease in poor credit …show more content…
and that the investment would far outweigh the effects as education would be unable to counteract the non-rational determinants of the financial world and its behavior. However, recent studies by two organizations that help provide financial literacy curriculum: EverFi along with Higher One, have shown that financial literacy education being taught in high school continues to positively influence student’s relationship with money and money management well after they graduate. The study was conducted on 65,000 students. The study showed that “students who took a class did better on the survey’s financial knowledge questions, were found to be more averse to debt, more likely to pay credit card bills on time, and less likely to go over their credit limit” (Malcolm, “Financial Literacy Education Has Lasting Impact”). Essentially, providing students with the know how on properly dealing with their finances in school better prepared them for real world finances and helped them to make responsible decisions that were made even more evident when compared to the decisions of their peers who had not taken the
Financial literacy allows those individuals or family units to understand money and the way it works, responsibly obtain, spend, and budget said money, and take into account future need as well as risk. In the study conducted by J. Michael Collins (Assistant Professor of Consumer Science at the University of Wisconsin–Madison, Faculty Director of the Center for Financial Security, and an IRP affiliate) on the effects of mandatory financial education for low-income clients 144 low-income clients in need of housing vouchers were placed into two groups: a treatment group and a control group. The treatment group was instructed to take the required financial literacy courses within a year of enrollment. The control group was barred from taking the required financial literacy courses until after a year had passed. The goal of the financial fitness program was to provide access to basic banking services, increase client savings, help repair damaged credit, and teach budgeting. The study resulted in findings that proved that financial literacy education is in fact analogous with improvements in financial behavior amongst the low-income clients. After completing the program the clients who participated in the treatment group experienced a significant raise in savings balances, a slight decrease in poor credit …show more content…
and that the investment would far outweigh the effects as education would be unable to counteract the non-rational determinants of the financial world and its behavior. However, recent studies by two organizations that help provide financial literacy curriculum: EverFi along with Higher One, have shown that financial literacy education being taught in high school continues to positively influence student’s relationship with money and money management well after they graduate. The study was conducted on 65,000 students. The study showed that “students who took a class did better on the survey’s financial knowledge questions, were found to be more averse to debt, more likely to pay credit card bills on time, and less likely to go over their credit limit” (Malcolm, “Financial Literacy Education Has Lasting Impact”). Essentially, providing students with the know how on properly dealing with their finances in school better prepared them for real world finances and helped them to make responsible decisions that were made even more evident when compared to the decisions of their peers who had not taken the