Earlier this week, the CFPB issued a study comparing annual spending on financial education to annual spending on financial industry marketing efforts. Intended to support the CFPB’s call for increased financial education and financial skill building opportunities for American consumers, the study’s key findings are that 25 times as much is spent on marketing financial products and services to consumers each year than on financial education and about two dollars per person per year is spent nationally on financial education.
We find it troubling that the study seems designed to stigmatize the financial services industry for inadequate spending on consumer education. The study makes no attempt to compare what the financial services industry spends on consumer education to what is spent on consumer education by other industries such as sellers of non-financial consumer products. In addition, the study’s estimates of spending on marketing do not take into consideration the fact that marketing materials for many financial products and services often include an educational component.
Most importantly, the financial services industry has not challenged the CFPB’s position that increased financial education is needed and has voiced support for the CFPB’s initiatives. For example, in response to the study, the President of the Consumer Bankers Association issued a statement in which he said that “CBA’s retail banks are deeply committed to educating their customers and working with the CFPB to improve financial literacy.” He also commented that “as every government agency should know, it is not about the amount of money spent, but the quality and effectiveness of the program.” Given industry’s recognition of the importance of financial education, we wonder why the CFPB felt it more worthwhile to devote its resources to producing the study rather than to the furthering of its financial education initiatives.