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Prepared Remarks of CFPB Director Richard Cordray on FINRA Foundation National Financial Capability Study Release

Washington, D.C.

It is a real pleasure for me to have the chance to spend some time with you today. I want to begin by thanking Chairman Ketchum, Gerri Walsh, and the rest of the FINRA team for their efforts in creating the National Financial Capability Study, which is now one of the nation’s leading surveys of financial capability. It gives us a unique view into the struggles and the opportunities consumers face as they navigate their day-to-day financial lives and strive to achieve their longer term financial goals. Fortunately for consumers, the organizations here today are committed to helping ensure consumers everywhere have the proper resources and support to build their financial capability.

For the Consumer Financial Protection Bureau, the survey is a great way to reflect on the work we are doing to promote greater financial well-being among consumers. Today I want to discuss ways we are working to strengthen the financial capability of all consumers and how the study’s findings inform and influence our work. 

This year’s study shows that collectively, we are moving in the right direction. Seven years after the first financial capability study was conducted, Americans on average are experiencing less financial stress and improved satisfaction with their financial condition.

In January 2015, the Consumer Bureau released a report that provided a definition of financial well-being, drawing on interviews with consumers across the country, relevant research, and consultations with leading financial education experts. In writing the report and developing the definition, consumers identified what they believed to be the four main elements of financial well-being. These elements are closely aligned with the indicators that the National Financial Capability Study highlights.

First, consumers told us that their financial well-being depends on having a present sense of financial security by feeling in control of day-to-day and month-to-month finances. While the National Financial Capability Study reported that people are generally feeling more financially secure, almost half of consumers surveyed reported having some trouble covering expenses and paying bills.

The second element involves being able to absorb an unexpected financial shock and having a safety net in place for emergencies. This year’s study showed that now, for the first time since the study’s original publication in 2009, nearly half of Americans have an emergency fund set aside to cover three months of expenses.

The third element of financial well-being consumers reported was a sense that they were on track to meet their financial goals. Correspondingly, the study found that respondents who report working towards long term goals are much more likely to be satisfied with their personal finances than those who are not doing so.

The fourth and final element of financial well-being consumers identified was having the financial freedom to make choices that allow them to enjoy life in the present moment, whether that means taking a vacation, eating out, or going back to school. To this end, it is encouraging that those answering the National Financial Capability Study who are highly satisfied with their financial condition have roughly doubled since 2009 and now stand at over 30 percent.

Although most of the study’s data points show improvement for the population as a whole, the results also reveal that large segments of society continue to face financial difficulties. More than half of all respondents did not have three months’ of emergency savings. On top of that, more than one third said they probably or certainly lacked the money to cover an unexpected $2,000 expense. Several groups were even more financially fragile, including women along with lower-income, African-American, Hispanic, and less educated respondents.

Clearly there is more work to be done to continue to increase overall financial capability and well-being among all Americans, and we all can play a part. As we continue to emerge from the aftermath of the financial crisis, we must work to empower people to take more control of their economic lives. Both consumers and industry benefit when consumers are financially capable.

In our view, financial education goes well beyond just presenting the basics of financial literacy. It requires meeting people where they are – at work and in their communities – with the information and support they need, when they need it, in forms they can act on. It requires starting early, by helping parents talk to their children about the importance of proper savings habits. It also means giving all young people access to the building blocks of financial capability in schools, through engaging and developmentally appropriate curriculums.

To support this comprehensive financial education, the Consumer Bureau conducts foundational research, provides tools and information directly to the public, and works to build collaborative education initiatives. Our financial education exchange presents to adult financial educators what we are learning through our research. Together with FINRA and other partners, we are making public libraries a go-to source for unbiased financial education information. Our “Your Money Your Goals” financial empowerment toolkit for social service providers is helping front-line staff and volunteers have conversations about money with their clients. On our website,, consumers can find financial decision-making resources to help them make major life decisions, such as buying a home or paying for college.

When people have the tools and resources to make informed financial decisions, we see healthier and more secure consumers. The results of this year’s study show that our collective efforts to educate and empower consumers are working and that we must remain steadfast to ensure that more Americans attain financial capability. We look forward to our continued work with the FINRA Investor Education Foundation – and all of you – to build on this important research and help consumers reach their personal financial goals. Thank you.

The Consumer Financial Protection Bureau is a 21st century agency that implements and enforces Federal consumer financial law and ensures that markets for consumer financial products are fair, transparent, and competitive. For more information, visit