The Consumer Financial Protection Bureau recently summarized progress in its efforts to promote financial literacy. It’s July report presented not only a recap of financial tools and programs produced during the bureau’s first two years, but described its pilot projects such as integrating capability enhancements with financial products and overcoming consumers’ common decision-making challenges.
Reaffirming its strategy to motivate and support consumers in making financial decisions that serve their life goals, the report stressed the need to involve not only financial institutions but a range of other community institutions in fostering financial literacy.
“We need to sustain a national conversation about household financial issues, not just in the financial services marketplace, but throughout our communities, including in our families, schools, workplaces, and places of worship,” wrote CFPB director Richard Cordray in the report.
Looking ahead, the bureau is evaluating the effectiveness of financial coaching and is developing means of measuring financial wellbeing among working-age and older consumers.
It also is researching the possibility of integrating capability-enhancing products and services for low-income and economically vulnerable consumers with other types of financial products and services. This may involve bundling products (such as a prepaid card that also has a savings function) and/or integrating financial coaching and counseling into financial product offerings.
Stating that information isn’t always enough to help some consumers make good financial decisions, the CFPB is developing approaches to help consumers overcome common decision-making challenges. The CFPB cited a Government Accountability Office financial literacy report that describes changing the default option, using commitment mechanisms, simplifying decisions, and leveraging peer support and influence.
According to the CFPB report, “when final results become available in 2014, the bureau expects that this project will increase knowledge of innovative approaches to improve financial capability, which can strengthen financial education content and strategy both within the CFPB and among a range of external stakeholders who serve consumers.”
Online tools the Bureau has introduced in the past two years include:
- Ask CFPB, an online financial FAQ for consumers;
- Paying for College, a collection of tools designed to help with higher education decisions; and
- CFPB en Espanol, which offers CFPB resources in Spanish.
It also has launched school-based education initiatives, workplace financial education, and resources for faith communities, the underserved, service members and the elderly.
As part the CFPB’s effort to serve older Americans, it is developing how-to guides for “lay fiduciaries” which it plans to make available through channels such as banks and credit unions, elder law, trusts and estate attorneys, and state courts.
In addition, the CFPB, together with the FDIC, developed a financial education curriculum for older adults as a module of the FDIC’s Money Smart education program.