CFPB FinEx webinar: Light touch financial education on credit card spending


NWX-CFPB HQ (US)

Moderator:  Irene Skricki
January 26, 2017
1:00 pm CT


Coordinator:	Welcome and thank you for standing by. At this time, all participants are in listen only mode until the question and answer session of today’s conference. At that time, press star then the number 1 on your phone to ask the question.

I would like to inform all parties that today’s conference is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn 
the conference over to Irene Skricki. Thank you. You may begin.

Irene Skricki:	Great. Well, thank you very much and welcome everybody to our FinEx Webinar today. I’m very excited about our topic. We will be discussing light touch financial
 education on credit card debt and discussing some research the Bureau has done and some new tools we have.

And we also are very excited to have a guest speaker today, Soneyet Muhammad from Clarifi Credit Counseling Agency in Philadelphia, so it’s going to be a great Webinar.


Just to start off, our standard disclaimer that this presentation does not constitute legal interpretation, guidance or advice from the CFPB. And we’re also not affiliated with or
 endorsing any of the speakers or entities on the call. So I just want to put that out there upfront.

I will do what I always do on FinEx Webinars, especially to welcome people who are not already a part of FinEx and don’t get the communications at this point, is a couple minutes of 
overview to get everybody on the same page.

We are with the CFPB, the Consumer Financial Protection Bureau, which is the newest financial - newest federal agency. And we work to help consumer finance markets work better
 by making rules more effective, consistently and fairly enforcing those rules and empowering consumers to take more control over their economic lives.

We - in the Office of Financial Education, are focused, in particular, on the first bullet up there - educate, which is helping consumers be better prepared to be the first line
 of defense against abusive financial practices.

And within the CFPB, there’s a consumer-facing side, Consumer Education and Engagement, with a number of offices that serve special populations such as military service members,
 older Americans and others.

Here in Office of Financial Education, we look across the whole population and try to help educate and empower consumers to make better informed decisions. And one of the ways 
that we want to do that is to help the financial education field. All the people out there are like all of you, who are helping consumers to navigate their financial lives, 
to get you tools and resources that we hope will be helpful to you.

The CFPB Financial Education Exchange, or FinEx, is a communication mechanism where we get our information out to through things like this Webinar, newsletters, things like that.
We learn back from you through occasional surveys or competing’s that we do and encourage all of you to connect with each other through our LinkedIn group or through other times 
when we all come together in different ways.

If anybody on this call is not part of FinEx, meaning you’re not getting a monthly newsletter with updates specifically labeled FinEx, you can sign up by sending an email to 
CFPB, underscore, FinEx, F-I-N-E-X, at CFPB.gov, and will have that up again later, too. So if you want to continue to learn about things like this Webinar, do sign up and you 
will get an occasional newsletter to let you know what’s coming up. 

We’ve done a number of things. This is actually our 21st Webinar and they are all - almost all -- available on our Web site, f anybody wants to listen to previous Webinars.   
we have statistics up there about regional convenings and the number of people in FinEx right now, which is a little over 2200.  We are very excited that it has expanded. 

Again, we have an inventory of our different tools and resources online and also a Resources for Financial Educators Webpage. The URL for that is 
Consumerfinance.com/adult-financial-education, not the most elegant of URLs, but that’s what we’ve got right now.

All the things we talk about today, you will be able to see that Web site. And just lastly, we have a financial education discussion group on LinkedIn. There’s information
 about that on our Web site as well, but it’s a way for you all to both see new things from us, which you’ll also get in any FinEx newsletter, but also to be able to post 
your own questions, thoughts, resources that you have.

Okay, before we jump into our topic for the day, I want to do a quick plug for February Webinar which we already have scheduled which is, as always, on the fourth Thursday, 
February - Thursday, February 23rd at 2:00 Eastern.

And it will look at debt collection. Today we’re looking at managing credit card spending and debt. Next month is looking at that collection and some new research and 
resources that CFBP has on helping consumers manage that collection challenges including some very interesting video stories of consumers have shared their struggles with us.
I think that will be a very interesting Webinar. More information on that, of course, will come through our newsletter as well as on our LinkedIn site and our Web site. 

And with that background, we can go on to our topic of the day, light touch financial education on credit card debt. So we will hear from my colleague here at CFPB, Sue Kerbel.
 I’ll turn it over to her in a second.

After her, we will then hear from Soneyet Muhammad from Clarifi. If anyone has questions during the presentation, you can use a Q&A function on the WebEx if you’re in the 
WebEx part and I will monitor those.  If there’s anything urgent, I will respond. And then at the end, I will put it up for voice questions. So again, will hold  more things 
beyond clarifying questions until the very end but you will have a chance to do that. And with that, I will turn it over to Sue. Thank you very much, Sue.

Sue Kerbel:  Great. Thanks very much, Irene, and hi everybody. It’s good to be here and I’m looking forward to taking the next few minutes to tell you all about our study 
on rules of thumb for credit card revolvers, also known as light touch financial education on credit card debt for the purposes of our Webinar.

So the purpose of our study was to find out if simple messages can change financial behavior. In other words, we wanted to test the effectiveness of rules of thumb. 
Specifically, we wanted to see if we could help consumers decrease their revolving credit card debt through the use of rules of thumb.

Rules of thumb are mental shortcuts that simplify decision-making and produce a good enough solution. So, for example, you want to eat a healthy diet. Instead of memorizing
 the entire FDA food pyramid, you could just remember to fill have your plate with veggies. That’s a rule of thumb.

It's simpler to recall, and gets you essentially the same results. Rules of thumb have been shown to work well with repetitive decisions such as managing revolving credit card debt.

And there’s been some prior research that shows that financial rules of thumb can work as well or better than more detailed and complex financial education in some situations.

They’re also very inexpensive. That’s why, with all of our research partners we have listed here on the screen, we decided to test some new rules of thumb with American credit 
card revolvers, see if they might be effective enough to add to the financial education toolkit.

Now, just to be clear, CFPB’s Office of Financial Education commissions the research. The Urban Institute actually conducted the study with the D2D fund. The data was reviewed 
by CFPB’s Office of Research. The Urban Institute conducted the analysis, so many partners involved here.

We can’t really speak so much to the details of the data analysis but our focus today will be much more on the applications of the study. 

These are our rules. We went through an intensive process to create these two new rules.  They’re based on insights in the literature, seven rounds of iterative, in-depth consumer 
interviews, for strawman rules.
 
All of that ultimately became two original rule statements. One, don’t swipe the small stuff. Use cash when it’s under $20. And, two, credit keeps charging. It adds about 20% 
to the total. So basically for rule one, reduce unconscious credit spending on small items, and rule two, be aware of the cost of credit.

nd what you see here on the screen are the Web banners, email ads and fridge calendar magnets containing the rules. We did a randomized controlled trial with a large sample of 
about 14,000 credit card revolvers from Arizona Federal Credit Union.

We randomly assigned participants to either get one of the two rules or to be in the control group. The control condition got no messages beyond what they typically would have
gotten anyway from Arizona Federal.

And they were also randomly assigned to get their rules for at least one of three delivery channels. There were Web portal banners on their account login page, emails, to twice
 per month, a mailed refrigerator magnet as well with the rule statements printed on it.

So just to clarify, we tested every combination of treatment condition and delivery channels. We tested rule one with every combination of delivery channel, rule two, with every
 combination of delivery channel like email, Web portal and calendar magnet, and then there was the control group as well.

We delivered the message - the messages, I should say, during the first six months of 2015. We got great quality, de-identified account data from Arizona Federal Credit, checking
 and savings account, plus credit reporting data.

And here’s what we found.  First, about the sample - these folks had fairly stable financial lines as you can see. They had about $5000 in part debt. They were also infrequent card 
users and had infrequent card purchases under $20, so not really paying down debt, minimal spending on their card, minimal small purchases on their card.

Because of this, we can expect an upper limit on the effects that we would expect to see with these rules, and yet, we got an effect. So here’s what we found - revolvers exposed 
to one of the rule statement, that cash under $20 rule, showed on average, a 2% lower credit card balance on their Arizona Federal card compared with revolvers were not exposed to
 the rule.

And revolvers who saw that cash under $20 rule, their card balances were, on average, $104 lower than the balance that they had prior to being able to see the message. That’s a 
small effect, but it was statistically significant, which is good news.

On the other hand, while we got this result is unclear. We did not find any significant changes in any aspect of credit card purchases or payments which seems like a paradox. 
Typically we would expect to see fewer purchases or more payments or both. We found neither. We also found no detectable effect on savings, on withdrawals, on deposit or the number
 of debit card transactions below $20.

And we found no evidence that revolvers substituted the use of one credit card for another card outside of Arizona Federal. For example, we found no effect on their aggregate debt 
on all revolving trades which includes debt from accounts outside of Arizona Fed.

So overall, we found lower card balances, good news, but it’s unclear why. Maybe, most interesting of all, we found a greater effect for revolvers age 40 and under. For younger 
revolvers, exposure to either rule went to an average 5% reduction in credit card balance compared to their control converts. That’s about $170 less with that cash under $20 rule
 on average, and average decrease of about $160, so that ad’s $20 rule.

The other group who saw the 20% rule also showed an average of $24 lesson card purchase amount compared with their counterparts in the control group. That’s a minor decrease in
 credit card purchases, not merely large enough to account for the average balance decrease we saw for this group. But it does suggest that role exposure led to lower balances 
and to a small degree, decreased spending among this group.

Lastly, compared to their control group counterparts, the under-40 group, who were exposed to that cash under $20 rule, now we’re talking about the other rule, they showed an
 average increase of about $280 and savings as well in increase in net savings, for about $480. That’s their savings balance minus their credit card balance. That’s a substantial
 gain in net savings for this younger group. Although, it’s not entirely clear why that’s the case or what other factors might explain that increased net savings for this younger group.
It is conceivable, for example, there might have been cash or account activity that occurred outside of the participant’s Arizona Federal accounts which was not detectable in credit
 history.

In any event, overall for that 40 and under group, the rules that have a greater effect on card balance is primarily, along with to some degree, slightly lower purchase amounts 
with the one rule and more savings with the other rule.

Moving on, we found no significant effects for delivery channels. There was no difference in impact if participants all rules via email, Web banner or fridge magnet. Although, fewer 
channels were better. Card balance was reduced with one or two but not three channels. Three channels might be too many. On the other hand, email open rates were very high during
 the study, indicating lots of interest in the topic of card debt reduction.

The overall average email open rate over the course of the six-month study was 31%. Compare that with what you might typically expect for a study like this, and open rate of 
about maybe 15% or 20%.

We also got a spike in month one with both rules, up to 46% and 58% of emails opened. And then in month three, open rates spiked again in the neighborhood of 45% to 60% when we sent
 emails with the subject line, “Avoid unnecessary credit costs,” so extremely high open rates. And by the end of the six months, open rates had tapered to 18% and 22% which is still 
very good, so all of this together indicating very strong interest in card debt reduction.

We should also keep in mind that rules of thumb are very cost effective intervention. Production and delivery of rule messages cost less than one dollar per person, as you can see.
That’s virtually no marginal cost to bring to scale. And interestingly enough, the role statements worked even under a very low motivation scenario. That’s every reason to think that
 participants would ignore this tiny handful of role statements.

There were no motivators in place to get participants to follow through, no commitment devices are incentives, for example, and yet, even under those circumstances, the rule statements
 got results.

That speaks to the power of rules of thumb as a financial education intervention. So now we know there is a (there) there. Rules of thumb can create behavior change. They can have an 
impact on credit card behavior. These particular rules may be just a test case but the concept holds water. In other words, we may not be able to say exactly what mechanism caused the 
rules to lead to decreased card balances, but the fact that we found statistically significant results from a randomized controlled trial, even a modest result like we got here, 
means that those cruel messages caused the effect we observed.

All the evidence taken together seems to suggest that we very likely that the effect we did, at least in part, due to bring the topic to mind. So focusing attention and using 
reminders even in a minimal way can make a difference in lowering card balance.

Now that’s important because this is one more piece of evidence to support the perspective that there are many ways to do effective financial education. A simple, low-cost tool 
like this can help people carry less debt without having to learn lots of new information.

Our results also speak to the value of customizing rules of thumb to the particular consumers that use them. Our under 40 group, for example, responded differently than others
 to the rules.

The lesson here is to create rules of thumb benefit the circumstances of specific consumers are types of consumers along with encouragement to do more research to further our 
understanding of why rules of thumb work and for whom and under what conditions.

Finally, on this point, and September, Urban Institute released their full research report on our study and D2D who are also - were now known as Commonwealth, they released 
their own product, a designed toolkit on how to create a rule of thumb. Both of those are available on their Web sites. 

And just last week, CFPB released three things. One, a research brief reviewing the research results, as well as a digest for financial educators with suggestions on ways to make
 use of the findings. And number three, worksheet for consumers on how to create personalized rules of thumb, all of this based on the results of the study. In fact, we’re going 
to give you a little preview here of those two last items.

So here’s the digest for financial educators on credit card rules of thumb. The digest will help you understand some of the practical implications of the study available on our
 adult FinEd Webpage, as you can see the URL address at the bottom of the slide right there.

And again, just as a preview, here are some of the suggestions you’ll find on - in the digest and what you can do to make use of our study findings. First, you may want to start by 
sharing our credit card rules to live by with your clients.

But just as a starting place for helping them to craft rules that fit their personal circumstances, I would encourage you to also use our worksheet for this which I’ll show you in a
 moment.

Encouraging folks to start by sharing the credit card rules to live by your clients as a starting place. Then next, after they’ve crafted their role that that’s their personal
 circumstances, you want to help consumers to find ways to keep their attention focused on their personalized rule of thumb. That’s important. That - and what that means is basically
 making sure it’s reliably visible without bombarding them, so calendar reminders, account alerts, well-placed Post-it notes, like on the fridge, they can help.

Phone apps are also good sources of reminders as well. And then lastly, more broadly, you might want to consider ways to focus consumer attention on their credit cards, particularly
 for those were struggling with getting a hand on their credit card debt. It could be useful to remind them that small purchases add up or the cost of carrying a balance. And again, 
we found that at least, in part, card balances decreased especially for those younger consumers simply because of the act of bringing attention repeatedly to the topic of charging small purchases and the cost of using credit cards.
So harnessing that insight even outside of a formal rule of thumb might be useful. 

Lastly, here’s our credit card rule to live by worksheet that I just mentioned. So the idea here is to start with one of the rules, say, don’t swipe the small stuff. So from there, 
you would help the person, especially a person who struggling to control their card debt, you would help the person figure out when and where they are swiping the small stuff. 
In other words, look at their credit card statement with them. Have them identify when and where they put small purchases on their card when they might have paid cash instead.

Then, the last step is to help them modify the rules to fit the goals that person has in mind for saving credit card management and also accounting for the personal and financial 
limitations that they’re working with.

And so, for example, is cash under $20, might turn out to be all pay cash for my coffee every morning for this person once you’ve customized the rule. Like with any rule, you’re going
 to want to keep the rule simple and concrete so it’s easy to act on so the person can remember it.

And from there, again, you want to keep their attention focused on the rule with regular but unobtrusive reminders. That means posting it in a spot where they’ll easily see it on a 
regular basis. The worksheet is going to walk you through all of how to do this step-by-step, and again, it’s available on our adult FinEd Webpage at CFPB.gov.


Irene Skricki:	And by the way, there’s a screenshot you’re looking at. It’s a little hard to read because, of course, it small on the screen. But, again, you can access that. It’s part 
of a series of our rules to live by worksheet. There are now four of them. This one on credit card spending. Previous ones are on checking your credit report, savings and sort of budgeting,
 (basically) deciding how much you can afford to spend each month. So those are all, again, available on the Web site and you’ll see the URL again at the end. Okay?


Sue Kerbel:	Okay, so now I’m going to hand it over to Soneyet. Great.


Irene Skricki:	Well, thank you Sue. That was wonderful. Just a note for all of - some of you have been emailing asking if you can get a copy of the PowerPoint deck. So if you could 
email the FinEx inbox, which is again, CFPB, underscore, FinEx - F-I-N-E-X, at CFPB.gov, and just say you want a copy of the PowerPoint, we can send that out to you.

Okay, so I am now thrilled to turn it over to our guest speaker today, Soneyet Muhammad from Clarifi. And she is going to talk a little bit about her own experience working with folks 
who have credit card debt and trying to figure out how to manage their credit card spending. So I will turn it over to you, Soneyet. Welcome.


Soneyet Muhammed:   Thank you so much, Irene. I really appreciate this opportunity. So I wanted to start by - I’ll tell you a little bit about Clarifi and what we do and then sort
 of how we think about conversations with folks who we touch, both in the low to moderate income population, and those outside of that realm.

Our mission is this - we create hope by helping people really get a handle on what is the most important asset in their life and keeping it with them. And not every asset you want 
with you for every year of your life. You know, what you wanted when you were 15 they not be the same thing you want it now. So we accomplish mission in two ways. 

We have education programs and counseling programs. So we distinguish those between a group setting, which is education, and then counseling programs which are private one-on-one
 sessions or one counselor to a household, so there might be a couple.

We began as a nonprofit and continue to be. Last year, we celebrated our 50 year anniversary. We were started as Consumer Credit Counseling Service of Delaware Valley and we changed
 our name about three years ago to become Clarifi because our programs, both from the counseling and education perspective, have grown in size in terms of what we talk about them what 
we do and how we do it.

So our education programs are fairly simple. There are adults, older teens, so while we are in K-12 we kind of limit that work to really marginalized teens, LGBT youth, youth aging 
out of foster care, things like that.

	
Financially, “Hers,” is our woman focused program, and then Seniors, for those 62 and older. Our counseling programs, we talk about budgeting, getting - saving for the first time, 
preparing for homeownership, avoiding foreclosure, managing student loan debt.

Those are the things that we work on and so whether we are talking to a moderate income household about retirement and getting their arms around that and providing - or providing 
a financial checkup for folks who are thinking about approaching their overwhelming amount of credit card debt, we try and have a whole robust conversation that intersects with many
 different aspects of people’s lives.

We're a member agency of the National Foundation for Credit Counseling and we are a HUD approved housing counseling agency as well. And so, when -- next slide -- so when Irene 
approached us and asked us about this study, we were happy to weigh in from our perspective.

Most of our work is focused on low to moderate income households throughout the greater Delaware Valley which includes Philadelphia, its surrounding counties, southern New Jersey
 and northern Delaware.

And with respect to LMI populations, our experience suggests that, you know, folks in the LMI population use credit cards as a way to establish credit, if not altogether improve 
credit.

And so they tend to focus on establishing credit for the first time with the security card and we direct them, encourage them to look at secured cards as opposed to subprime credit
 they might see at a store card or something, a preapproved offer, mailed to their home given their current credit scores and profile.

So from that perspective, in terms of establishing credit, what we find is that oftentimes, households are reluctant to use credit or to establish credit in the first place and 
they come to us unaware of how important credit can be or not understanding the rules.

And so on education side, our most regularly requested workshop is, in fact, the credit report workshop because people don’t understand credit, particularly with low to moderate 
income households.

And so, they’re reluctant to use credit. They don’t understand it. And so create - having a credit card for the small purchases is but we encourage them to think about. Go to the
 local drugstore. Maybe run your credit card for a $4 purchase.

That does a couple of things. One, it keeps the credit line open for those larger purchases that might come down the pike to finance the financial shock that might happen from
 a car repair or things of that nature.

So the $4 purchase gets them on the board in terms of establishing credit. It also is a way in which they can sort of manage through repaying that which we know it’s critical to 
establishing credit or improving credit. So the repayment is also something they can manage as opposed to the larger purchase that the study addresses. So when it comes to the LMI 
population, the $20 cash rule that we really encourage people to think about is actually to preserve that credit line to be open for the larger emergency. You’re going to want to use
 a credit card for smaller purchases because it’s easy when you have a very low income to make a $4 payment. And then because a lot of them already are reluctant to use credit, 
they kind of already have the discipline on which you can build about using credit selectively, again, only for those larger purchases.

And then of course we encourage them to consider if they are able to, to make more than the minimum payment as opposed to the 20% rule that was discussed in the study. So minimum 
payments are easier, of course, when you’ve got a balance of $20, so that makes it more of an accessible tool. So the - so that’s how we approach the rules of thumb with respect to 
my population.

When we’re dealing with non-LMI populations, those folks tend to come to us because, you know, they may have overindulged and credit card usage for one reason or another. And so, 
when they come to us for our debt management plan, then we encourage them to keep one credit card open for large emergency purchases only and so definitely not using the card for 
small purchases and only for true emergencies. That’s how they’re directed. 

So just depends on the audience that reaches us and sort of where they are in their financial lives, as to how we attack this. I think the overarching factor is yes to these two 
rules of thumb and if you’ve ever done improv at all - that sort of my background, from a performing arts background, yes, and you want to think about your audience.

So if your audience is LMI and they’re using credit cards for the very first time, you might want to adjust the two rules of thumb here to encourage that they use a credit card
 for smaller purchases from which they can recover and repay.

For the non-LMI population, you might want to think about having them understand the importance of credit for those larger emergencies so they can recover from credit card 
overindulgence and using them way too often and getting into a whole heck of a lot of problems.

Irene Skricki:	Great, well, Soneyet, thank you and I want you to know that I’d love to talk to you about exploring financial education through improv theater. I think it’s a 
more engaging way to get the clients to come to all of the programs that you guys have.


Soneyet Muhammed:  Yes.


Irene Skricki:	That was terrific. So let me let the operator give instructions for how to ask voice questions, and you can also continue to send things through Q&A. So let me let
 the operator do that and then I’ll ask a couple questions of Sue and Soneyet myself. Operator.


Coordinator:	Thank you. We will now begin the question-and-answer session over the phone. If you would like to ask a question, please press Star 1, unmute your phone and 
record them clearly. Your name is required to introduce your question. If you need to address that question, press Star 2. Again, to ask the question, please press Star 1.
 And it may take a few moments for those questions to come through. Please stand by.


Irene Skricki:	Great. I already got an email question saying that there is agreement on the idea of improv for FinEx, so thank you for chiming in there. So Soneyet, I love 
the message you gave us really built so nicely on what I think are rules - our financial guidelines or rules of thumb were both on this project and previous ones.

We’ve talked about that there’re general guidelines that people hear about it know about in here from each other in the media and from books and all that. And then they don’t always - 
they need to be customized a little bit, or at least tweaked to fit a particular circumstance. 

And I think it was very interesting how a particular population - low to moderate income populations who may be struggling or with getting access to credit as opposed to 
just managing spending for credit may, in fact, have the reverse rule of thumb which is spend only credit under - or use your credit card only for situations under $20.

So that is very intriguing and I would love to actually also hear from people on the phone, it may have observations in the general regard as well. Let me see, oh, we’ve got a couple
 of questions already. Thank you. First question we’ve gotten: Would you agree that the trend is towards digital transactions? And if so, how does this fit into the "don’t swipe 
the small stuff" strategy? Sue.


Sue Kerbel:  Excellent question. Yes, it does seem the trend is in the direction of more digital transactions. And I would say that during the study, we didn’t distinguish between 
cash and debit. We didn’t find any results that distinguished between that comments are technically you could still approach not swiping and instead, using debits rather than credit 
cards. That’s one possible way of thinking about it. But I think the larger question is in terms of physical cash versus digital. And I think, yes, that is a limitation of what we’re
 recommending and we are, in some sense, swimming against tide. But I think, when you’re asking people to develop a new discipline, that that’s that completely unrealistic.


Soneyet Muhammed:   If I can add to that, too, there are definitely folks who feel, you know, they may make a different choice about that spending activity if they are pulling out 
cold hard cash out of their pockets, right. So for some folks, the quote, unquote, “old school,” method, or the envelope method, really works for them because they’re hard to part 
with real cash but they’re easier to make the swipe. 

So, in terms of moving towards digital cash with respect to debit cards and whatnot, to take the place of the credit card expense, that’s something to noodle on there as well.


Irene Skricki:	I would just note we didn’t say too much about the original genesis of this, but there is research showing that people spend more when they use a credit card and 
when they use cash because there’s this "pain to paying" idea. It came up earlier. And so that is the reality for some people but maybe not for everybody. And there are also
 obviously issues around security and all that when they’re carrying cash versus credit.

I think the bigger message is not necessarily is don’t swipe the small stuff is the exact right rule of thumb, but the idea is, if people want to keep better track of their 
spending and manage their spending, what are ways they can set up guidelines that work for them for their particular needs, concerns, comfort with cash versus credit?

And so whether or not it’s these particular rules, the idea is can you all work with your clients to say how, and managing spending and keeping that down is one of your priorities,
 one of your goals, how can we do it?

Maybe it’s getting balance alerts every day or alerts from your credit card. Maybe that helps you. Maybe you don’t need to switch to cash but you are better aware. Maybe set a dollar 
amount to spend per day and find a way to keep track of it. So there are any number of ways you could apply these ideas. The general idea is help people develop some type of rule 
or guideline networks for their particular goal and their particular situation and then figure out how to implement it which is the idea behind the worksheet that is part 
of this suite of materials that we are sharing. 

In a world that’s all digital, it may be less about cash but a general idea is how do we help people manage that spending? 

Let’s ask if there are any voice questions that have come in. Operator?


Coordinator:	We do have a couple of questions over the phone line. The first comes from (Sandra Lee). Your line is open, ma’am.

(Sandra Lee):	Good afternoon. I’m (Sandra Lee): from Helena, Arkansas. We are just getting into the financial arena as a whole reaching out to schools and community groups
 and organizations. And clarifi - I understand - I came on the call late but it said he’s been in business 50 years?

Soneyet Muhammed:	That’s right, since 1966, when I was a wee girl. I’m just kidding. Yes.

(Sandra Lee):	Do you mind sharing with me your sustainability access the funds?

Soneyet Muhammed: I don’t know what you mean by that. Are you asking me we have quite a diverse amount of funding that relies on earned income, grants, partnerships and federal funding as well?

(Sandra Lee):	Oh, okay. Okay, that…

Soneyet Muhammed:	Is that what you mean?

(Sandra Lee):	Yes.

Soneyet Muhammed:	Okay.

(Sandra Lee):	Federal funds.

Soneyet Muhammed:	Yes, that’s a part of it. Yes.

(Sandra Lee):	Okay. Okay, writing that down. Thank you.

Irene Skricki:	Great. Operator, any other voice calls?

Coordinator:	Yes, we have one other question on the line. (Killian Moore), your line is open.

(Killian):	Hello. My name is (Killian) from Raleigh, North Carolina, and we do a lot of presentations with middle school all the way up to adults. And I wanted to know 
if you guys had any tips about speaking to the younger crowd, like middle schoolers and high schoolers regarding credit cards because I know that they do have a lot of questions
 regarding them? And even though, of course, they aren’t able to get them, but some of them are starting to get ready for college and I have those questions. And just wanted to know 
if you had any tips.

Irene Skricki:	And, Soneyet, you have a program for younger people, right? You want to address that?

Soneyet Muhammed:  Yes, sure. So the ways in which we have worked with youth is that we have a script in terms of what we’re going to talk about. It’s not really a script. 
Again, that’s a throwback for me.

But we have a program that we’re planning on delivering but we also - we just come armed with information and just ask them to ask us questions and take an improvisational 
approach. I’m struggling to get away from it today.  And just let them lead all the conversations. One thing we always have in our back pocket is, it’s a quick game we come with 
 - and this has been done before. It’s nothing new that we invented, of course.

But you get each - you pair with the students and groups with communal, three, four or five, whatever you’ve got there and then folks pick - we give them a person that the group 
becomes and I we have life circumstances sort of thrown at them and they have to manage their financial lives when their car breaks down, when they have a different job. 
We have the students sometimes even bid on job opportunities are life opportunities based upon a finite amount of income. And we also vary - one person gets $1000, one person 
gets $100, and help them understand the scarcity of income and how that can affect their choices.

So I would say, particularly with younger groups, but also with adults as well, as I’m sure you know, as much as you can vary it up and also be directly responsive to the
 questions they have and then building from there the true workshop.

But we really come in with a set sort of script. We are able to do that if we need to and we don’t get enough questions, but usually we let them sort of set the agenda.

(Killian):	Okay, perfect. Thank you.

Irene Skricki:	And I would just add - this is Irene with CFPB - we also have a number of materials on youth financial capability, youth financial education. There is actually a 
parallel page to the adult financial education page that we’ve mentioned a number of times. It’s Consumerfinance.gov/youth-financial-education that you can get to honor Web site 
that has some resources, things in helping get financial education into school systems. 

But it does have a particular paper called, “Building Blocks” - it’s got a longer title than that but discussing the different skills and abilities and things you can teach
 kids at different ages based on their developmental readiness, so for young kids, middle grade kids and more high school aged kids.

So that is something you might want to look at. It’s not explicitly about how to talk about credit cards but there may be things in there that might be useful for you. So I encourage
 you to at least take a look at that and see of them might be of use.

Actually, interestingly, on the other end of the spectrum, we have had two questions come in via the Q&A function here asking about - I think really aimed at Soneyet, asking to please
 say more about credit card use and senior citizens becomes some folks are senior consumers. And Soneyet, I know you mentioned you had a program for that. Would you like to tell us 
about that?

Soneyet Muhammed:  Yes. We have a seniors program that I had mentioned that speaks with folks 62 and older and we’re - we - as a part of that grant, it’s focused in Philadelphia 
and in the surrounding counties and also a little bit inside of New Jersey.

And so I would say routinely, when we deal with seniors, actually we don’t talk a lot about credit card debt because that’s not what they’re asking for. They’re asking for things
 around identity theft. They’re asking for information about reverse mortgages. They’re asking for information that we have put together to help them understand end-of-life planning 
from a financial perspective. So those are the types of things that we routinely see.

Oftentimes, the seniors that we interact with are much older, older than 62. They’re in their late 70s to 80s but we do have programming for 62 and younger and that is really about
 -- I wouldn’t even call them seniors, but older adults, maybe from the 50 to 62 range, that would fall into our general adult programming. Those types of questions people have around
 managing their debt, that’s when it’s always questions about how do I repay the debt and how do I get out of the much debt that I have? 

And that is when we typically take the approach about reducing how much you spend and just the power of minimum payments in terms of eradicating that debt and helping them understand
 preliminarily if they would - if the DMP would make sense for them.

But it’s really about managing existing debt loads as opposed to reducing their spending because only have an adult who is interested in our credit card workshop, it’s using about 
reducing their existing balances, not about how I stopped spending. That’s a broader question around the budgeting element and that’s a different workshop altogether.

Irene Skricki:	All right, but ask one other - I have one other email question in here. Oh, another one just came in. And then I’ll turn to the voice questions. Again, Star 1 if you 
want to ask a voice question. We have a question, is CFPB planning to test other rules of thumb related to credit or other areas of personal finance such as savings?

Sue Kerbel:	Ah, another very good question. We don’t have any specific plans to test - to do another randomized controlled trial on rules of thumb. That having been said, I think
 one of the outcomes of this particular study is encouraging the field, as a whole, to take what we’ve done here and to Irene’s earlier point, as proof of concept, and sort of a stake
 in the ground to show that rules of thumb are effective.

And then from there, I think we are happy to hand the standard bearing over to others to do other studies to show, you know, why do these work and with whom and under what 
circumstances? So that’s a long way of saying, no, not right now but we’d love to (see) more research.

Irene Skricki:	Right. It actually a related question just came in which, the answer will be the same, but I’ll share it. Are there any specific thoughts related to creating rules of 
thumb for service members? And we ask you do have a lot of service members serving (as) financial educators who are part of FinEx and are (officer) service members which works a lot 
with that group of folks.

Again, we don’t have anything pending right now but I would love to hear either right now are certainly through additional conversations and email exchanges with all of you on 
what type of rules of thumb you think would work for your populations.  As financial educators, you have a better sense of what you
 think works with folks you know. 

What are people you know actually doing? What are consumers doing that seems to be working? So we would, I think, would love to hear that type of feedback.

Sue Kerbel:	I would also add that I think we have interest in creating more worksheets.  Eventually it would be great to have a whole compendium of worksheets on every possible
 kind of financial decision-making. So as things come along, I think we will be able to create more and more of those so, yes, again, we would be interested in hearing it. 

Irene Skricki:	Right, and assuming specifically the rules to live by worksheet - we have tried the term "rules to live by," we have used as a way to say rules of thumb customized 
to you, our special term for that. 

And, again, we have four right now, the one on credit spending, which was we have been talking about, along with one on checking your credit report, one on setting savings for an 
individual and one on budgeting and spending. 

And I think we’ll have more at some point. We also love ideas on what other topics would be helpful. Someone emailed, I recommend a rule of thumb for student loans before someon
e agrees to a student loan. I love that. That is excellent. I’ll ask our Office of Students about that. Let’s just check, are there other ways questions before we…

Coordinator:	We do have one question over the phone.

Irene Skricki:	Great.

Coordinator:	(Debbie), your line is open.

(Debbie):	Yes, what would be the best way to lower the high percentage rates on these cards?

Irene Skricki:	I don’t - in terms of what decisions or choices a consumer could make as opposed to…

(Debbie):	Yes.

Irene Skricki:	So, Soneyet, you would probably know that better from your work kind of in practice with folks who have credit cards. Could you take a crack at that?

Soneyet Muhammed:	Yes. Yes, so debt management plans can be a tool that consumer credit counseling agencies throughout the country can use to help people reduce their
 outstanding credit card debt, fees, and sometimes interest rates as well.

So, for instance, we’re able to negotiate credit card interest rates, sometimes in the case, all the way down to 2%. It just really depends on the nature of the agreement, 
the hardship the consumer is facing and so on and so forth.

So I would connect with the local consumer credit counseling agency in your area to see what access to that management plans might be available to help your constituents.

(Debbie):	Thank you.

Irene Skricki:	Soneyet, does it ever work for someone without the kind of infrastructure of a debt enrichment plan to call on their own and ask for a lower rate?

Soneyet Muhammed:	Oh, absolutely. Sometimes people who don’t qualify for a DMP, and they haven’t already gone to the creditor, we encourage them to go back and seek some 
help one-on-one, and that might mean they lose access to their credit card in the future. They might close that credit card and still have to repay that balance, but at least there
 is a window of opportunity of getting out of debt with a lower interest rate negotiated directly with the creditor. It does happen sometimes.

Irene Skricki:	Let’s see, going to - this is actually one more question here. It’s a bit of a - it’s a throwback to our youth financial capabilities that we were talking about. 
I think this is aimed at Soneyet as well.  Do you partner with other non-profits, such as Junior Achievement with regard to working with early age financial education, is the term 
that this person uses? Do you have partnerships, other organizations you work with in that area?

Soneyet Muhammed:  Yes, we do. Our focus for youth education, oftentimes refer them to other organizations who serve the K-12 market specifically. Being a nonprofit, we all know 
that we have limited resources so we just can’t be in as many places as we want to be so we do have referral relationships for folks who have interest in the K-12 space.

But we - everything we do is partnership based on education and the counseling side. We embed our offices with social service organizations and then, likewise, in the education side, 
we always work in partnership with organizations. So it’s a critical way in which we get the message out there and connect with the clients.

Irene Skricki:	Great. I’m going to ask in just a minute for the last round of anyone interested in voice questions, Star 1 for that. But I want to say just briefly, again, for those
 who wanted the PowerPoint, and actually if anyone is looking at the screen, I’ve just gone to a resources page, a very last slide the just passed CFPB FinEx email address along with 
the Web site we’ve been talking about.

If you want to slides, if you could email me at CFPBFinex - CFPB, underscore, FinEx, at CFPB.gov, a few of you have emailed through the Q&A but I have not been able to write those
 down because I’m trying to keep up with questions.

And so if you could send that to the FinEx box, because once we turn this WebEx off, I will lose those questions forever and I know who asked for it. So again, we can email you the
 PowerPoint.

Also, again, anyone on the phone who isn’t signed up for FinEx and wants to get a monthly newsletter on our newest things, you could send an email again to CFPB, underscore, 
FinEx at CFPB.gov.

And then, just again, to note that this Webinar, we have recorded it and it will be up in a couple weeks on the adult, dash, financial, dash, education page. We also have sort of 
a library of all of our previous Webinars and I will note that there have been a couple who’ve been interested in seniors and young people.

There have been several in the past dealing with those topics. If you want to look at those, or listen to those, there’s one on the building blocks for youth - to help youth build 
financial capability, again, the different developmental stages of kids and what are appropriate kind of financial education related activities or skills you can build.

Another one on a review tools to look at curricula for kids and young people and choose a good one. A couple other things like that on K-12. And then there are number of resources.
 We have an Office of Older Americans. There are number of resources for seniors around different financial decisions, both on our Web site and, again, we’ve had Webinars on three or 
four of those. 

If you look through the Webinar archive at the bottom of the resources for financial educator’s page, you’ll see a number of Webinars and those links and things. 

So again, just want to make sure everybody knows about all of those resources. Let me ask, again, are there any - operator, any final voice questions that have come in?

Coordinator:	Yes, we have one. I believe she said her name was (Anisha). Your line is open.

(Anisha):  Hi. I’m (Anisha) from (unintelligible) in DC. One of the questions that we often ask ourselves, and I’m going to ask you if you have any answers as part as if there is 
any research based on what are the gaps that you are seeing in financial education from the consumers.

And what is it that they’re looking to learn and, you know, how are they (consuming) that? Are there any best practices around how we present this information to them? Thank you.

Woman:	Wow.

Woman:	Wow. We’re all sitting here going, “wow,” because that is an enormous question at almost, in a way it sort of very clearly articulated. Our mission…

((Crosstalk))

Woman:	…all those gaps and have research support intervention for each of them. It’s almost too big of a question to give a good answer. 

Irene Skricki:	I mean, no, we have something thatwill be coming out soon and it's somewhat public already which is why am able to talk about it. We talked about it at a FinEx 
conference that a number of you were probably at or called into in September.

We have five principles to support financial well-being or effective financial education which get at the best practices. And those are going to be released fairly soon and, 
in fact, I’m thinking that since we had them at the conferencem, we could share.

But they’re  broader principles on how to do financial education and help consumers move towards behavior change that we could share. In fact, if you want to email the 
FinEx box, I could send you something on that. Those will be coming out soon. We will have a Webinar on those once they’re out. 

In terms of what we hear from consumers, Soneyet, you may have a better sense of what, you know, people come and say they want to know about. Certainly what we hear from the field 
as they want to hear about just about everything. 

But generally, a lot of day-to-day money management or things - are often some ways a more compelling in the immediate moment, perhaps than longer-term goals, depending on the type
 of program you are running. 

So if you’re running a counseling program where people come in with issues, it’s probably going to be around that or credit. If you’re doing, you know, a program looking at 
longer-term things like homeownership, or what not, you may have people coming in, if you’re marketing that way. 

So it kind of depends on what you’re trying to do and teach. Soneyet, do you want to chime in, and anyway on your experiences and clarify? You probably are seeing people with 
a lot of credit issues since your credit counseling agency, but I know your purview is much broader now than probably in your earlier days.

Soneyet Muhammed:	Yes. So a huge question, right. I think in terms of the questions people routinely ask for, it’s budgeting - budgeting that’s accessible, so most people, 
especially if they’ve never budgeted before, are scared and so they’re scared into a mobility around starting to budget for the first time by tracking everything they spend.

They’re not going to do that. And so we’ve had to change the way we talk about budgeting and holding it to just a couple of key principles, talk about budgeting and some 
different ways.  We talk about credit and we talk about debt collection because that always comes up when we talk about credit. We talk about - we have people who are exiting
 bankruptcies so on their brain is about, how do I responsibly enter back into the credit arena after going through bankruptcy?

Our homeowners who have experienced foreclosure or who’ve gone through a loan modification are very leery about that same type of question, so we have those types of things that
 they’re interested in.

And now that they have been bruised and battered, how do they reenter this arena which, it just touches every aspect of their life? They want to understand their paychecks. 
They want to understand Social Security. They want to understand reverse mortgages.

They want to understand credit, credit, credit. People want to understand also about their student loans. They’re overwhelmed and they’re just seeking resources. We started doing
 financial planning, so we do retirement coaching. 

We have (chartered) retirement planning counselors on staff and the folks who have come into see us already have a financial advisor. They already are saving for their retirement
 and they’re usually in their 50s or so. They’re just coming into just get another opinion that they are okay, because we don’t sell a product, we don’t pitch a product. That’s not 
who we are. 

They just want someone else to look over their financials and give them some reassurance, and that is, in fact, what they truly have presented themselves. They just need to be 
reassured. So people are looking for a whole host of information, but ultimately, they want to know they’re doing okay. 

Irene Skricki:	Well, I would say that’s a very exhaustive list of what people want to know about. Again, you know, really reiterating the need, I think, for all the work that all 
of you guys are doing out in your communities.

So we are right at the top of the hour so I think we will close up here. I want to - I got one nice last little - not a question but a common saying, I truly enjoyed the 
non-cookie-cutter approach to working with clients that we were talking about today. That’s a nice way to end, I think, that the idea is people need guidelines and rules that 
they set for themselves that really work for their own needs and obviously credit card spending is a big one that a lot of people want, I think, one help with in different ways.

So thank you very much, Sue, for speaking. Thank you very much, Soneyet, for being our guest speaker. We love that. And thanks everyone for chiming in - for joining us today.
 Email if you have any questions to the FinEx inbox, or want the PowerPoint, and thank you very much. We are done.

Coordinator:	That concludes today’s conference. Thank you for participating. You may disconnect at this time.


END
NWX-CFPB HQ (US)
Moderator:  Sharon Mobley
01-26-2017/1:00 pm CT
Confirmation #2565896
Page 1