Banking Blog

Finance Blogs » Banking Blog » CFPB touts work on financial literacy

CFPB touts work on financial literacy

By Claes Bell ·
Friday, August 9, 2013
Posted: 4 pm ET

When it comes to understanding their finances, Americans need some help. In a 2012 study by the Financial Industry Regulatory Authority, pollsters asked Americans five questions about basic finance and economics. Less than 40 percent of Americans scored 4 or more out of 5 on the quiz, less than in 2009.

Part of the mandate of the Consumer Financial Protection Bureau is to help educate Americans about personal finance, so when it comes time to pick out a checking account or decide whether or not to charge something on a credit card, they can make an informed decision.

The Dodd-Frank financial reform law that created the CFPB also requires the agency to report on its progress on financial education each year. The first such report came out last month and shows that while the agency has made some progress, it still has a ways to go.

Here are some of the highlights in the report.

  • The CFPB plans to provide literature and training for "lay fiduciaries," nonprofessionals helping parents and other family members manage their financial affairs. The number of Americans 65 and older increased by 15 percent between 2000 and 2010, according to the U.S. census, and a lot of them are going to be leaning on family members for help with their finances over the next couple of years.
  • The CFPB has created and distributed brochures and other literature on a range of personal finance topics and distributed nearly 200,000 copies to consumers and digital copies to 25,000 more.
  • During the 2011 tax season, the CFPB distributed educational materials to 3,500 Volunteer Income Tax Assistance sites, encouraging recipients of the earned income tax credit to save a portion of it.
  • The CFPB expanded the Ask CFPB database to 1,000 questions and answers about financial products and money management.

For an agency that likes to characterize itself as "data driven," there's precious little in the way of hard data in the report.

For instance, the CFPB says it measures views on its website, but the report doesn't include any numbers on Web traffic or engagement. We're told that the CFPB is reaching out to community organizations and financial institutions to get people essential financial information when it's most needed, but we're not told much about how that help is being distributed geographically, or the scale of those efforts.

Arguably one of the most important areas of financial education, K-12 financial literacy programs, seemed to get short shrift. The CFPB hosted a conference of financial education experts, local political leaders and educators this year and issued a white paper with some recommendations on the issue. But there's been little in the way of real action taken to ensure young people graduate high school with a basic understanding of personal finance.

Considering the CFPB only came online two years ago, it's early yet to judge the CFPB's financial literacy efforts. But if the agency doesn't at some point switch from advising and studying to teaching and doing, it seems unlikely it will succeed in equipping Americans with the knowledge they need to make better financial decisions.

What do you think? Is the CFPB doing enough to educate Americans on personal finance? What else could it be doing?

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
1 Comment