The CFPB has issued its fourth Financial Literacy Annual Report to Congress.  The report covers the CFPB’s activities to improve consumer financial literacy during the period from October 2015 through September 2016.  The report discusses the CFPB’s financial literacy strategy, its financial education initiatives (which include consumer tools and information and collaborations with community institutions and other government agencies), and its research initiatives (which include identifying effective financial education approaches).

An Appendix to the report lists and describes the CFPB’s currently available financial education resources, which include web-based tools, CFPB brochures and other publications, CFPB reports, and consumer advisories.

 

 

The CFPB has released an “issue brief” entitled “Financial Education Programs Serving Immigrant Populations.”  The report is intended “to raise visibility about the financial education challenges that many immigrants face.”

The report shares the results of a “field scan” in which the CFPB identified financial education programs and providers and spoke with experts in the field.  In an appendix to the report, the CFPB lists financial education programs or resources that serve immigrant populations and provides a description of each program or resource.

In the report, the CFPB discusses the money management challenges faced by immigrant consumers, the challenges faced by financial educators in helping immigrant communities improve their financial capability, and different approaches to helping immigrants build financial well-being.

The report includes a section devoted to actions taken by the CFPB to assist limited English proficiency (LEP) consumers, such as assisting consumers with complaints in multiple languages and making consumer education resources available in multiple languages.  The CFPB has previously indicated that LEP consumers are a priority and suggested that financial institutions should be able to take steps similar to those taken by the CFPB to support LEP customers.  However, as we have observed, the CFPB’s expectations for serving LEP customers present numerous challenges for financial institutions, including UDAAP and fair lending risks, and the CFPB has not yet provided financial institutions with guidance about how to serve LEP consumers without taking such risks.  In November 2015, we conducted a webinar on the issues that institutions should consider when taking steps to serve LEP consumers.

 

The CFPB has released a “youth financial education curriculum review tool” for curriculum developers and educators to use to review financial education materials and determine which curricula best suits their students.  The tool is intended to address the needs of the education community which, according to the CFPB, is increasingly recognizing the importance of requiring personal finance education for K-12 students but generally does not feel well-equipped to choose the most promising or appropriate financial education curricula or develop their own curricula.

In its press release about the tool, the CFPB stated that it developed the tool by reviewing relevant literature, analyzing current financial education content standards, and consulting with educators and financial education experts.  The tool provides detailed measures and questions for users to use in evaluating the four key dimensions of a financial education curriculum: content, utility, efficacy and quality.  The tool is accompanied by a report that includes an overview of each of these dimensions.

We applaud the CFPB for its continuing efforts to improve the financial education of the nation’s youth, a goal that can reap benefits for both consumers and industry.

The Financial Services Roundtable and CFPB are joining forces in a nationwide public-private initiative to promote effective financial education.  According to an announcement posted on the Roundtable’s website, the CFPB and Roundtable plan to work together to facilitate the gathering and sharing of information about effective financial education strategies, to encourage adoption of financial education initiatives, especially in K-12 schools and in the workplace, and to protect older Americans from financial exploitation.  The Roundtable indicated on its website that the announcement followed a closed meeting of financial industry executives and CFPB officials.

The CFPB and Roundtable plan to host a series of working groups and listening sessions at various locations throughout the country to determine best practices and a path forward.

We have often commented that we consider the CFPB’s Dodd-Frank mandates to improve the financial literacy of American consumers and protect older Americans from financial exploitation deserving of industry support.  We applaud the Roundtable for partnering with the CFPB in furtherance of these worthwhile mandates.

 

The CFPB continues to seek comments on its plans to launch in the winter of 2015 what it describes as “a multi-site financial education demonstration project to provide one-on-one and group financial counseling/coaching services to individuals with disabilities transitioning into the workplace or already employed.”

The project has two goals.  One goal is to improve the financial capability of approximately 15,00 disabled individuals to effectively navigate the financial marketplace.  The other goal is “to build the capacity of diverse multi-sector systems (non-disability and disability) in up to 14 cities to unite around the common purpose of building financial security for individuals with disabilities.”  The CFPB plans to collect monthly qualitative reports and quantitative aggregated individual data from participating sites “to document the design, growth and impact of up to 14 integrated diverse delivery models serving primarily low-income populations with disabilities.”

Comment are due on or before February 9, 2015.

 

 

 

 

 

In his remarks last week at the Columbus Metropolitan Library, Director Cordray spoke about the partnerships that the CFPB is building with public libraries around the country to promote accessible financial education information for consumers.

Director Cordray noted that the Columbus Metropolitan Library system was one of the first nine public libraries from across the country that joined the CFPB’s national pilot project.  (Although Director Cordray stated in his remarks that the nine libraries joined the project “about a year and a half ago,” he announced the project’s launch and the nine libraries’ participation in remarks given in Chicago about nine months ago in April 2014.)  According to Director Cordray, more than 360 library systems in 48 states, with more than 1,700 branches, have now signed up for the project.

In his remarks, Director Cordray discussed the important role played by public libraries in our society and referred to a statistic showing that one out of four people who sign on to a library computer does so to take care of commercial needs or financial matters.  Director Cordray stated that the CFPB’s goal “is to help the library become the go-to place for people to learn more about how to deal with their financial affairs” through initiatives that include helping libraries (1) identify and connect with local partners in their own communities that can provide information and expertise, and (2) build online communities for librarians to learn and share more about financial education.  The CFPB is also providing training for library staff and managers.

As we have previously commented, the CFPB’s plan to help libraries become providers of financial education information makes eminent sense and deserves wide-spread support.  We are glad to learn that the CFPB is making steady progress in implementing that plan.

 

Last week, the CFPB published a report entitled “Financial wellness at work” that reviews “promising practices to promote financial wellness in the workplace.” 

The CFPB’s research found that particularly since the recession, financial distress is widespread among the American workforce and can result in large associated costs to employers in terms of productivity loss and higher health care spending.  According to the CFPB, such costs provide employers with “a potentially large incentive to explore cost-effective ways to enhance employee financial wellness.”   The CFPB describes financial wellness programs as programs that educate employees to help them manage both short-term and long-term financial needs. 

The CFPB states that the report is intended “to serve as a resource for employers who are interested in promoting employee financial well-being by helping their employees develop the skills to better manage their money.”  In addition to making “the business case” for financial wellness programs and describing relevant research findings, the CFPB provides “case studies of some financial wellness practices that employers have found helpful and which might be useful to other companies interested in promoting financial wellness.” 

We think the report is another demonstration of the CFPB’s commendable efforts to explore innovative approaches in carrying out its Dodd-Frank mandate to develop and implement financial education initiatives.

 

 

 

Last week, the CFPB announced a new partnership with national and local nonprofit and public social services programs across the country to train staff to provide financial education and tools to clients with low-to-moderate incomes.  

As part of that partnership, the CFPB unveiled a new online toolkit entitled “Your Money, Your Goals.”  The toolkit, which the CFPB describes as “rigorously field tested,” is intended to serve as a comprehensive guide to empower financial decision-making.  The toolkit includes information, checklists, and worksheets and covers topics such as: 

  • Making spending decisions
  • Ordering and fixing credit reports
  • Avoiding tricks and traps in choosing financial products
  • Making decisions about repaying debts and taking on new debt
  • Keeping track of income and bills
  • Deciding whether to open a checking account and understanding what is needed to open one 

We think the CFPB once again deserves praise and support for its innovative efforts in improving the financial education resources available to consumers.

Director Cordray spoke at the Financial Literacy and Education Commission (FLEC) Field Hearing this week, emphasizing the federal government’s role as the nation’s single largest employer. In order to lead by example, Director Cordray described how the CFPB has been working with the Office of Personnel Management and the Department of Labor to encourage and assist other federal agencies in developing robust financial education plans for their employees. He stated that the next step is to implement these financial education plans at other federal government agencies, just as the CFPB is in the process of doing with its own financial education plan for employees of the CFPB.

Innovative approaches to promoting financial education for young people was the topic at the last FLEC public meeting, during which Director Cordray agreed to help the FLEC coordinate financial education programs with state and local leaders. This led to the State Engagement Project, which is designed to gather input from state policymakers on resources and information that would be most helpful in incorporating youth financial education into state programs. Director Cordray called this an “excellent opportunity” for federal agencies to partner with states to expand K-12 financial education and to develop hands-on financial learning programs. He further stated that it is “critical” that the federal government work closely with state and local partners to increase access to financial education for young people.

Director Cordray’s comments are a continuation of the CFPB’s focus on the importance of financial literacy. At the last FLEC hearing, Director Cordray called for public and private sector businesses and organizations to help employees with their financial lives. He stated that implementing financial education programs is the “smart thing for their employees and their businesses.” The CFPB also announced plans to launch a new Community Financial Education Project, hoping to make public libraries vital financial education hubs in communities across the country.

The CFPB has announced that it plans to launch a new Community Financial Education Project in which it will work with public libraries across the country to help them provide free financial information and referrals.  The launch will be the subject of an event hosted by the CFPB’s Office of Financial Education that is scheduled for April 7 and will be streamed live on the CFPB’s website.

The CFPB has said that its goal is to make libraries vital financial education hubs in communities across the country.  The CFPB’s plan to help community resources such as libraries become providers of financial education information makes eminent sense and deserves wide-spread support.