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Banking without booby traps

By Marcie Geffner · Bankrate.com
Tuesday, May 22, 2012
Posted: 2 pm ET

Pundits sometimes fault politicians for their failure to understand what one presidential candidate called "the vision thing."

That charge might not to stick to Richard Cordray, director of the Consumer Financial Protection Bureau, or CFPB, judging by a recent speech in which he painted an idealistic picture of the future of financial education.

"In our society," Cordray said in his prepared remarks, "financial education typically seems to be an outlier. Rather than educating our young people, we condemn them to making the same mistakes others made before them in the 'school of hard knocks,' which, of course, is no school at all."

In lieu of that failed approach, Cordray envisions financial education that begins in childhood and builds on the knowledge of previous generations, schools of thought and even civilizations to teach people about budgets, savings, investments and credit.

"We want to see integrated curricula in our schools -- where the benefits of compound interest are understood in math class, where economic costs and risks are taught in social studies class, where an essay in English class explains how we can take control of our financial lives to achieve our goals. We all need to know why we have bank accounts, why we keep track of checking account balances, why we should check our credit reports regularly," he said.

Cordray suggested two ways to close the gap between consumers' financial capabilities and the complex financial decisions they must make. One: Give consumers better information. Two: Require more transparency and accountability in financial products and services.

"We are advocating for greater transparency not to dumb things down, but to take overly complicated products and make them reasonably accessible to normal human beings," Cordray said.

"Our goal," he concluded, "is to give people the confidence and peace of mind that the financial world is not booby-trapped with pitfalls that will ruin their lives. We want information to be more accessible to people, and through this, to enhance consumers' abilities to make wise financial decisions for themselves and their families."

Amen to that.

Follow me on Twitter: @marciegeff.

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