Prepared Remarks of CFPB Director Richard Cordray at the Financial Literacy and Education Commission Meeting
Let me thank everyone here today for your efforts to bring financial literacy to consumers. The work our agencies do to ensure consumers can become more financially capable and confident is not always glamorous, but it is vitally important. Today I want to describe some of the work the Consumer Financial Protection Bureau is doing to bring financial education to young people in the workplace as well as the classroom.
We are now nearing the end of the school year and summer is just around the corner. Across the country, millions of young people are poised to enter the workforce for the first time. These summer jobs provide young people with a host of new responsibilities, including the task of managing their own money for perhaps the first time in their lives.
Last year, through a pilot project with four cities, the Consumer Bureau took an in-depth look at how to improve the financial capability of young people who take part in summer jobs programs. The pilot allowed us to deliver valuable financial messages to these young people. Our belief was that with effective messages, we could help instill good saving and money management habits. When these habits are developed early in life, they can provide the foundation for the financial decisions these young people will have to make in the future and help pave the way for financial well-being.
From the pilot project we gained valuable insights to help inform our work. We learned that most young people were quite eager to save the money they earned working at these summer jobs. Despite their desire to save, many faced challenges accessing the financial products they needed. The local employment programs involved in the pilot faced challenges as well. Many of these programs did not have the experience or the capacity to provide both effective financial education and access to age-appropriate financial services.
To help address these issues, the Consumer Bureau has partnered with the Department of Labor to support year-round youth employment programs. Through our collaboration, we will now be working with up to 25 municipalities nationwide who are seeking to promote youth financial capability in their communities.
We will work with local leaders to help integrate financial knowledge and skills-building services into existing youth employment and training programs. By partnering with these municipalities, we will learn what is working well and share the most effective ways to help youth make the most of their hard-earned paychecks. You will hear more about our plans shortly from Daniel Dodd-Ramirez, who heads up our office of Financial Empowerment.
In addition to our exciting work with youth employment programs, the Consumer Bureau is continuing our work to make financial education a priority in school systems across the country. I believe in our society, financial education should be as fundamental as the education we all receive in mathematics and the language arts.
I also want to call your attention to a new policymakers resource guide for K-12 financial education that we recently released. This guide supports state and local leaders who are interested in advancing K-12 financial education by connecting them to ongoing conversations and providing access to information, tools, and resources. The resource guide has been shared with all of you and is available for download on our website at consumerfinance.gov.
Starting early with age-appropriate and relevant financial education and consistently reinforcing those lessons will pay big dividends over the course of a lifetime. Stressing financial education early will help children and youth develop the skills and habits that aid them in making sound financial decisions as adults.
The challenges that confront us in achieving our goal of financial capability for young people are complex, varied, and significant. With a growing number of public, private, and nonprofit organizations committed to advancing youth financial capability, no one needs to go it alone. From serving in state and local government, I learned the need to develop partnerships and have resources readily available to support the important work being done in our communities. I look forward to hearing more from our panelists today about innovative approaches to supporting financial education and improving people’s financial well-being.
The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.