The CFPB has issued its first Financial Literacy Annual Report to Congress. The report covers the CFPB’s activities and strategies to improve consumer financial literacy during the period from July 21, 2011 through June 15, 2013.
According to the CFPB, its financial literacy strategy is “[b]roadly…to motivate and support consumers in taking positive action on financial decisions that serve their own life goals.” The report discusses the three key components of the CFPB’s strategy: education initiatives, research and innovation, and outreach to key stakeholders who can help to reach the public.
With regard to education initiatives, the report describes the various tools the CFPB is using to engage consumers, such as interactive online tools, social media and print publications. It also describes collaborations the CFPB is developing with various partners and intermediaries, such as state and local governments and non-profit organizations. Among such collaborations is the CFPB’s K-12 financial education initiative to build the financial capability of youth. Other groups targeted by the CFPB’s initiatives are students, older Americans and servicemembers.
In the area of research and innovation, the CFPB indicates that its current projects are focusing on (1) evaluating the effectiveness of financial coaching programs, (2) developing measures of financial well-being for working age and older Americans and determining what knowledge and behavior predicts financial well-being, (3) determining whether the financial capability of low-income and economically vulnerable consumers can be enhanced through bundled financial products (such as a prepaid card with a savings function) and/or integration of financial coaching and counseling into the offering of financial products, and (4) conducting a pilot project to develop prototypes of approaches to help consumers overcome common decision-making challenges.
In the area of outreach, the CFPB discusses various events, meetings, programs and other activities that have been conducted by its Offices of Servicemember Affairs, Older Financial Education and Financial Empowerment and its Office for Older Americans.
Since the CFPB’s financial literacy efforts can yield benefits for industry and consumers alike, they deserve broad-based support.