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Prepared Remarks of CFPB Director Richard Cordray at the Financial Literacy and Education Commission Meeting

I want to thank everyone here for your continued work to make a difference in the financial lives of consumers. As we recognize America Saves Week and Military Saves Week, it is notable that the Commission is gathered here today to discuss youth savings accounts. The release of this guidance will help young people all across the country to become more actively engaged in their own financial lives.

One of the cornerstones of the Consumer Bureau’s mission is the work we are doing to study and improve financial education for people of all ages. Like our colleagues here today, we are focused diligently on what is working and what can be more effective in our financial education efforts.

Last year, through a pilot with four cities around the country, the Bureau took an in-depth look at ways to improve the financial capability of youth who are participating in summer employment programs. Whether lifeguarding at the local pool or mowing lawns for the city, summer jobs are often a young person’s first small taste of financial freedom and greater responsibility. We made an effort to use this period when young people are receiving their first paychecks to reach them with valuable financial messages. We believe that if we can help instill good saving habits at this early stage, we can help young people lay the proper groundwork for their financial futures.

So how can we encourage more youth to start saving? Through the youth summer employment pilot program, we were able to gain some valuable insights. First off, and this may surprise some of you with teenagers of your own, most young people are quite eager to save their hard-earned money. One problem is that many of them faced challenges accessing financial products that would enable them to do so. On the other side of the fence, financial institutions were interested in engaging to help these potential new customers meet their goals. Yet they told us they have often been hesitant to offer savings accounts, due to a lack of clarity around youth savings programs and issues of account ownership.

That is why we are encouraged by the guidance being issued by our regulatory partners. From our own work, we have seen a willingness from both consumers and financial institutions to seek out ways to make savings an attainable goal for young people. We hope this guidance will spur financial institutions and community groups to develop and implement new programs in their communities. We need to ensure that our young people have access to safe financial products that will allow them to start saving for their futures.

In the course of our research on youth financial capability, we have consistently found that one of the best ways for young people to develop effective money management skills is through hands-on learning, where they actually get to do things and not merely to learn information. We also strongly encourage parents and guardians to get more involved in discussing these topics at home to help young people make progress toward greater financial capability.

I also want to call your attention to a report that the Consumer Bureau recently put out on the topic of financial well-being, which has also been provided to members of the Commission. Our report helps provide a framework for defining and measuring success in financial education. It presents results from one-on-one interviews with consumers – research that undertook to define the concept of financial well-being along with insights into the factors that can help contribute to it. The report concludes that four key elements of financial well-being are control over your day-to day and month-to month finances; the capacity to cope financially with an unexpected turn of events; financial freedom to make choices that allow you to enjoy life; and being on track to meet your financial goals.

Starting from these elements of financial well-being, the natural next step is to examine what types of behaviors support financial well-being. The research supporting our report suggests that people attain higher levels of financial well-being when they specifically engage in an approach that we call “Ask, Plan, Act” and they consciously take care to live within their means. That means doing your homework, setting goals and making sound and reasonable financial plans to achieve them, and then diligently carrying out those plans. And it means steadily putting money aside to save toward a specific purpose, whether it is an emergency fund, college tuition, or a new house.

To achieve these goals, consumers need access to financial products such as safe, affordable savings accounts and ways to make automatic deposits from their paychecks. The guidance issued today will help ensure that young people have the means available and have the kind of financial partners they need to help them develop good saving habits that will serve them well for the rest of their lives.

As mentioned earlier, we are also marking America Saves Week and Military Saves Week. These occasions add visibility for financial education efforts and provide an annual opportunity for organizations to promote the healthy financial habits that lead to greater financial health. The Bureau right now is deeply engaged in our tax time saving initiatives, both with volunteer income tax preparation sites and through a joint effort with leading tax preparation companies to distribute our materials on helping people save some portion of their tax refunds.

Finally, the Bureau is fortunate to be able to continue a close partnership with the Departments of Defense, Labor and Veterans Affairs to help servicemembers and their families achieve their financial goals. We are participating in military financial education fairs this week at Fort George G. Meade in Maryland and at the Pentagon, which will reach over 4,500 members of the military community with the message of financial well-being. Assistant Director Holly Petraeus is on the road right now, headlining ten military financial education events at military installations across the Pacific Northwest. We are also underway with our financial coaching initiative for servicemembers who are transitioning to civilian life, and we continue to support the inter-agency group that is assisting the Department of Defense as it works toward issuing a final rule in connection with its proposal to update its regulations under the Military Lending Act.

I look forward to hearing from the panel on how we can further advance youth savings programs.

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