Listen to John Bryant's pitch funding financial literacy education in U.S. schools and it's easy to see why former President Bill Clinton once called Bryant "a whirlwind of ideas and action." Bryant believes strongly that adults across all incomes would be less likely to fall behind on loans, overdraw their bank accounts or max out their credit cards if they had received some money-management training as youngsters. Yet even in the wake of a housing bust that was, in part, the result of unsophisticated borrowers buying homes they couldn't afford, financial education in public schools is more of the exception than the rule. Operation Hope's programs are taught in about 4,000 schools, but superintendents in other districts who would like to add courses in money management often can't do so because funding for any new programs is scarce.
Bryant's idea is for local governments to sell what he calls "financial literacy bonds." As he envisions it, a city would bring in economists to calculate how much revenue it is losing each year from things like property tax defaults, missed utility payments and fees paid to payday or car title lenders that might otherwise buy goods and services that generate sales taxes. This is revenue that cities are missing out on because many of their residents have little understanding of how to manage money. The city would sell the bonds to investors and use the proceeds to fund financial education in schools and credit counseling programs for adults. Investors would be repaid with the money the city is saving by having a more financially literate citizenry.
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No such bonds exist and the mere mention of them to investors might get you strange looks, but those are hardly deterrents to Bryant, who is nothing if not persuasive. He has, after all, convinced regulators to give banks Community Redevelopment Act credit for opening Operation Hope centers in their branches and even persuaded the Commerce Department to provide grants to help banks cover the cost of staffing the centers.
Bryant just came up with the idea for the financial literacy bonds last fall. He is at a point where he is casually discussing the concept with policymakers and bankers and, so far, he has been encouraged by their response.
Getting mayors to buy in is the first step, and Bryant says he's spoken with several who think the idea has merit. Equally important is finding investors, and Bryant says banks have indicated to him that they would be interested in buying the bonds if they could receive CRA credit. Regulators aren't making any promises about CRA credit, but Bryant says some seem intrigued by his idea. "I've got some pretty thoughtful, intelligent people telling me [the concept] is somewhere between neutral and amazing," he says. "So far at least, I've got no one telling me it's stupid."