Consumer Finance: Factors Affecting the Financial Literacy of Individuals with Limited English Proficiency

This report examines the extent to which individuals with limited English proficiency are impeded in their financial literacy
and conduct of financial affairs as determined through a literature review and a series of focus groups with consumers and staff at community and financial organizations.

Author(s) Organizational Affiliation
U.S. Government Accountability Office
Publication Year
Resource Type
Informational Material
Number of Pages
Product Type
Target Audience

According to Census data, more than 12 million adults in the United States report they do not speak English well or at all. Proficiency in reading, writing, speaking, and understanding the English language appears to be linked to multiple dimensions of adult life in the United States, including financial literacy--the ability to make informed judgments and take effective actions regarding the current and future use and management of money. The Credit Card Accountability, Responsibility and Disclosure Act of 2009 mandated GAO to examine the relationship between fluency in the English language and financial literacy. Responding to this mandate, this report examines the extent, if any, to which individuals with limited English proficiency are impeded in their financial literacy and conduct of financial affairs. To address this objective, GAO conducted a literature review of relevant studies, reports, and surveys, and conducted interviews at federal, nonprofit, and private entities that address financial literacy issues and serve people with limited English proficiency. GAO also conducted a series of focus groups with consumers and with staff at community and financial organizations. Three appendices are included: (1) Scope and Methodology; (2) Examples of Financial Education Targeted at Populations with Limited English Proficiency; and (3) GAO Contact and Staff Acknowledgments. (Contains 1 table, 1 figure and 45 footnotes.)



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What the experts say

This report explores the role that language itself plays in financial literacy and financial education.   The report discusses how linguistic, academic and cultural difficulties faced by adult English Language Learners can impede their ability to understand financial choices; plan for the future; spend wisely; understand and choose financial products, services and concepts; and avoid fraudulent practices and predatory practices.    While all adults may have difficulty with financial literacy and conducting their financial affairs, this article highlights how and why adult ELLs face even greater challenges, including:  the role of cultural differences; the linguistic complexity of financial products; the unreliability of translation (whether provided by a minor child or even a bilingual adult); lack of familiarity with US financial system, such as the US tax system, and susceptibility to using alternative financial services, such as pawn shops, payday loans, and check-cashing services which often are targeted toward immigrant populations.  This report concludes that financial education can play an important role in helping consumers with limited English proficiency.  Although this report does not make recommendations, it could be an excellent spring-board for discussion about implications for classroom practice and programmatic design. 

"Factors Affecting the Financial Literacy of Individuals with Limited English Proficiency" provides an excellent overview of issues to consider when working with a limited English proficiency (LEP) adult population. The only drawback is that there would now be more current data (a newer census and more recent surveys), which would provide a better snapshot of where the populations are located, as there may have been a shift related to the economic recession in 2008 as well as other growth since that time.

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