It all started in 1997, five years after I was sworn in as a Federal Bankruptcy Judge for the Western District of New York. Although I sat in Rochester, my jurisdiction included Canandaigua and all of Monroe and Ontario counties. In those five years, I found myself every day dealing with individual debtors. It was something that I had not done much of in my 18-year commercial practice before taking the bench, during which I represented 11 different banks at one time or another.
I was absolutely shocked by what I saw. People from every demographic, every age group, income level, educational level and geographic area, were making the same financial mistakes that they could not have, and would not have, made in the 1960s and early 1970s when I was growing up. Of course those were the days before credit cards, home equity loans, and 7 seven-year car loans. They didn’t have budgets to track their spending, so that they could make good choices about their spending, and they didn’t have savings for emergencies or anticipated expenses, let alone for a retirement with dignity. They didn’t know the difference between a need, on the one hand, and a want, wish, luxury, or convenience on the other hand, and they were willing to go deeply into unaffordable credit card debt for those non-needs. Furthermore, they didn’t really understand how they were being taken advantage of by the financial industry every day, like with those seven-year car loans.
So, by 1997, I had concluded that we had a National Epidemic of Financial Illiteracy, and that financial institutions were no longer bound by the same laws, rules and regulations that once often protected consumers. I felt that I could no longer just sit there cleaning up everyone’s messes every day, and not reach out and try to help the young people in my community. That is when I started going into the schools to share with students the unique knowledge, experiences, and stories about finances that being in the bankruptcy court every day teaches you.
In 2002, when my court was so busy I couldn’t get into all of the schools I wanted to, I went to the Monroe County Bankruptcy Bar Association and asked the members to join me in my crusade. They agreed, and the Credit Abuse Resistance Education (CARE) Program was born. We called it CARE, because we care about young people. At the urging of many in the bankruptcy community, I went on national media, wrote articles, and spoke at conferences to spread the word, and by 2008, CARE was in all 50 states and the District of Columbia.
So that’s my story and CARE’s story, as we try to end our National Epidemic of Financial Illiteracy.