OPINION: Senators can contribute to financial literacy
Submitted by Sean Wingfield, Professor of Social Studies, Albuquerque Charter Academy
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The sponsors of HB 132, which seeks to cap interest rates on certain loans, admittedly address an issue that many – including myself – consider worthy of debate. HB 132 aims to eliminate the revolving door on debt incurred when accessing credit. Fair enough. Good cause, good politics, good politics. Especially the allocation of $180,000 from the state’s general fund to the Department of Public Education to prepare our children for financial literacy and independence. This crucial language was fed into the House Consumer and Public Affairs Committee to be gutted before being referred to the Judiciary Committee. Imagine the irony of an elected body, selected to protect and promote consumers of financial/credit services, finding funding to educate our children on how to navigate 21st century finance? This is after the sponsor and others railed against a system that allegedly grants loans to New Mexicans that often does not include secured versus unsecured loans, compound interest or APRs. So why the decision to remove the credit? Perhaps the reason lies somewhere near the fact that the Governor was not initially inclined to send the HB 132 message. Presumably because she thinks welfare legislation is the political manifestation of fruit at hand. And for HB 132 to become relevant in a budget session, ownership was needed. Maybe the Governor was right. Perhaps more stable leaders wanted closer collaboration between consumers, regulators and sponsors.
When states ratified the 18th Amendment banning the manufacture, sale, and consumption of alcohol, Congress needed the Volstead Act to enforce it. For HB 132 to be truly transformative and sustainable, it needs educational funding. I would argue that the New Mexico Voluntary Legislature would serve its constituents better by adding the appropriations back and sending a message that HB 132 is not just “welfare” legislation, but rather a serious vehicle for education. financial. I deliberately used the term “volunteer” to mitigate the fact that a large majority of our elected officials who are debating this bill have the financial independence to opt out of their day-to-day jobs and board meetings and adjourning in scenic Santa Fe for months without bothering themselves with utility bills, medical bills, or errands.
I want to be clear, I’m not saying that the intention of HB 132 is not above board. I simply fear that without the educational tools provided by appropriation, the next generation of New Mexicans categorized as “minority” or “underserved” will relive their parents’ cycle of debt. Perhaps for the sole reason that they never knew anything else, or were never told that they could make finance and credit work for them – rather than against them. This financial literacy is available to them. I hope they will question your successors – not about the intent of HB 132 – but about the utter failure to arm it with tools that could have changed their lives. As an educator of 18-24 year olds at Albuquerque Charter Academy downtown, I am acutely aware of the enormous benefit the $180,000 credit would have with my efforts to build financial literacy. To all senators who will debate this issue, please do whatever you can to put the money back in place to improve the financial skills of my students.