CFPB FinEx webinar on Youth Financial Literacy and Savings Behavior NWX-CFPB HQ July 27, 2017 1:00 pm CT Coordinator: Welcome and thank you for standing by. At this time, all participants are in a listen-only mode. During the question and answer session of today’s call, you may press star followed by 1 to ask a question. Today’s conference is being recorded. If you have any objections, you may disconnect at this time. And at this time, I’ll turn the call over to Irene Skricki. You may begin. Irene Skricki: Great. Thank you so much and thank you everybody and welcome to our CFPB Financial Exchange webinar today on youth financial literacy and savings behavior. We are very excited about this one because we have two great guest speakers from other federal agencies -- Dana Kelly from the National Center for Education Statistics and Nicola Myers from FDIC -- along with one of my colleagues here at the Bureau, Laura Schlachtmeyer. And I think it’s going to be a great call today.. Okay. So at the beginning of every webinar of course we need to say our standard disclaimer as we are federal employees saying that this presentation is being made by CFPB representatives -- I assume this would probably apply to our guest federal speakers as well -- on behalf of our agencies, but it does not constitute legal interpretation, guidance, or advice on the part of the CFPB and views stated by the presenter are the presenter’s own and may not represent the Bureau’s views. So I’m going to do my usual couple minutes of FinEx slides. Most people on the call I assume probably are part of the CFPB financial education exchange. But if not, we want to make sure everybody’s on the same page. So I always start off with the same few slides. Just quickly, probably everyone here knows CFPB is a federal agency that helps consumer finance markets work by making the rules more effective, enforcing those rules, and empowering consumers to take more control over their economic lives. And it’s that last part, on taking control over their economic lives, which is really why the financial education exchange is around. We’re within the consumer facing side of the Bureau, Consumer Education and Engagement. And CFPB FinEx is really intended to help financial educators get access to the tools and resources that the Bureau has that you can use for free, for us to learn back from you what’s working and what isn’t working, and learn more about what’s going on out in the finance education field and to also help connect everyone with common learning. And so that is what FinEx does. This screen is very busy, I know, but basically, we have actually it’s over 2,500 people now signed up. There are newsletters, and surveys periodically. We have convenings and webinars. All of which have been recorded. And we encourage anyone who did not get a newsletter this month -- the CFPB FinEx news and updates newsletter -- if you don’t get that newsletter, you aren’t part of FinEx and if you would like to be, you can email us at CFPB_FinEx F-I-N-E-X at CFPB.gov. That will come up on the screen later so if you didn’t catch it, we’ll let you know again later. But again I encourage any of you who are not in FinEx to join. You get a monthly webinar newsletter with new things coming out from the Bureau or from other agencies or organizations as we are covering today. We also have an inventory of all our tools and resources that’s online, a web page with our finance education tools and resources, and a LinkedIn discussion group. All of these things you can see on our website and again are all available for you to use. So again if you’re not in FinEx, we would love it if you would email us and join. And you will get wonderful webinars like this every month. So we will now turn to our topic. And before we start, I’m just going to say we have two presenters from other agencies and someone from the Bureau. During that time we will - if you have any kind of pressing or clarifying questions, you can send them in through the Q&A function, which in the webinar in the WebEx. And then when we finish the presentations, we will open up the phone lines and the Operator will tell you how to do that. So you can both ask questions through voice at the end or through Q&A throughout the entire webinar. Okay. So now I am very happy to turn it over to our first speaker, which is Dana Kelly from the National Center for Education Statistics. Dana, take it away. Welcome. Dana Kelly: Okay. Thank you, Irene. Good afternoon everyone. I want to thank CFPB for the invitation to be here today. Well, like Irene said I’m Dana Kelly from the National Center for Education Statistics or NCES. We are part of the Department of Education. We’re the statistical center of the US Department of Education and we are the nation’s source for high-quality data on the condition of education in this country. And policy makers, researchers, educators, and parents look to NCES for data to make informed decisions and choices. In our role, we also implement international studies as student performance and education including PISA -- that’s the Programme for International Student Assessment -- which in 2015 and also in 2012 conducted an assessment of students’ financial literacy. The results were first released in May at a public FLEC meeting -- May 24th, I think. So I’m going to be talking about similar results that were presented that day. This is really a first look at the financial literacy data. I think, you know, more could be done with this and that’s why it’s so great to have an opportunity to share it with the Financial Education Exchange, because you’re really the very people who I would think would be interested in mining these data. I also want to thank and acknowledge the Consumer Financial Protection Bureau for its role and their partnership really in the PISA financial literacy assessment. It really wouldn’t have been possible without our colleagues at CFPB and also the Treasury Department. So thank you for that. We can go on to the next slide. I’m going to talk about before I go into the detail just give you a couple of big findings. I mean, the findings are pretty sobering -- 22% or roughly one in five of our 15-year old students lack basic financial literacy skills. That means that these students don’t have all the skills and knowledge they need to make smart decisions about their personal finances as they transition to the adult world. Next slide, please. We also found sizable gaps between student groups. Of the students assessed, 45% of the students from higher income schools scored at or above levels five -- that’s the top proficiency level on this assessment. And that’s compared to 3% of students in low income schools. I will share more closely these results in a few minutes. Let’s go on to the next slide. So what is financial literacy in the PISA world? We in developing this assessment PISA has defined financial literacy in a certain way. Hopefully it comports with how you define financial literacy. But it is important to give some background on how it’s defined and what the assessment was like, so I’m going to spend a few slides doing that. So PISA defines financial literacy in two parts. The first part refers to the kind of thinking and behavior that characterizes financial literacy, which demonstrates knowledge and understanding of financial concepts and risks. And the second part refers to the purposes for developing this particular literacy, and that is to make effective decisions across a range of financial context to improve the financial well-being of individuals and society, and to enable participation in economic life. So we’ve got cognitive components and we also have the skills and motivation to actually use that knowledge and those skills. Let’s go on to the next slide. Now, PISA assesses 15-year-olds in all the other subjects that are assessed. And for those of you that don’t know that much about PISA, it’s conducted every three years across now well more than 70 countries participate in this assessment. And it’s age 15, which is in the United States that’s mostly 10th graders -- but also 9th and 11th graders. And reading, math, and science are always assessed every three years and then like I said earlier financial literacy was assessed in 2015 and also back in 2012. So there are reasons why PISA assesses at age 15. This is the point at which students are nearing the end of compulsory schooling. So it’s a useful point to understand students as they are about to go on to further education or the workforce. But I want to talk about why it’s useful to be assessing financial literacy at age 15. Many young people they already face complex financial decisions. They are already consumers. They have bank accounts. They may earn money from formal or informal jobs. And they are making financial decisions. They’re also beginning to consider whether they will continue their education and how to pay for that. They may be getting ready to enter the workforce or become entrepreneurs or to deal with household and business budgets. And all of them soon will have to perform these more financial operations and engage in financial activities as a part of their everyday life. Go on to the next slide. So the assessment framework -- what did we assess? Well, the PISA assessment is kind of defined by three let’s say broad elements -- the content of the assessment and the content that students know, so those were in broad categories: money and transactions, planning and managing finances, risk and reward, and financial landscape. And then students had to demonstrate various processes that they can do with that content -- so identifying financial information, analyzing information in a financial context, evaluating financial issues, and applying financial knowledge and understanding. And the PISA items questions finally are set in various contexts that are shown here -- education and work, home and family, individual and societal. Okay. We can go on to the next slide. First I’m going to just give you a review of the major findings for the US. And then we’ll look at factors associated with students’ financial literacy. Okay. Go to slide eight. So as I said, PISA first assessed financial literacy in 2012. So over the three years we saw even though it looks like we went down, there was actually no measurable change in the average score since 2012. The 2015 average of 487 was not measurably different from the 2012 average. Okay you can go on to the next slide. I mentioned before about that PISA has these levels of proficiency. I began by telling you that roughly one in five US 15-year-olds don’t understand basic financial concepts. We refer to those one in five students as low performers. This means they scored below PISA’s proficiency level two. They could be in the lowest proficiency level one or even below that level. While it’s a bit small, I think you can see that students as they move up in the assessment and have higher and higher scores they can do more complex - they understand more complex issues and they are able to do more complex -- yet still fairly fundamental to daily life -- understanding financial concepts and products and that sort of thing. Okay we can go on to the next slide. To dig a little bit more into this, students at level one have some knowledge and skills. They can identify common financial products, such as invoices, a nd can recognize the difference between needs and wants and can make simple decisions on everyday spending. But there are also students who score below level one, who struggle with even what is shown here on the screen. Of the 22 15-year-olds in this country who scored below level two -- the students who are considered low performers -- about 15% were at level one and about 7% were even below that. Okay, we can go on to the next one. So at the other end -- this is level five. This is the top performers -- these students can apply their understanding of a wide range of financial terms and concepts. They can analyze complex financial products and can take into account features of financial documents that are not immediately evident, such as transaction costs. The can describe the potential outcomes of financial decisions such as income tax. And we refer to these students that are reaching level five as top performers. So go to the next slide. Let’s look at some example questions. Here is what sample question - this is what some of the questions look like. Students were asked to imagine that they were at the supermarket and they have the option of buying tomatoes by the kilogram or by the box. You may go on to the next one. Students are then asked to explain why the box of tomatoes represents better value for their money than the loose tomatoes purchased by weight. A student can receive full credit by noting for example that the cost per kilogram for the loose tomatoes is higher than the cost per kilogram for the box tomatoes. Now, this is an example of a level one question. Those were at the one that I showed you, the low performers. Pretty easy question. Let’s go on to the next slide. Here’s an example at the other end, level five. In this example, students are asked to examine an email message which looks as if it comes from a bank. You’ve probably seen messages like this. Okay. Go on to the next one. Students are asked to answer a series of questions about the advisability of responding to the email. Students must determine that this type of email message is frequently used as phishing schemes to coerce consumers into compromising their bank accounts. This is one kind of risk that many 15-year-olds -- in fact, all of us -- are likely to encounter. And like I said this is one of the more difficult questions, at the higher end of the scale. Okay, next slide. As I mentioned before, roughly one fifth or 22% of US 15-year-olds scored below level two. And these low performers either scored at level one or did not even reach level one. At the higher end, 10% of US 15-year-olds scored at level five and are considered top performers. Next slide. Okay. Now I’d like to talk about some of the differences in US performance based on students’ race and ethnicity, socioeconomic status, and their familiarity with money. Next slide. So we noticed differences in the performance in student performance in the US based on the demographic makeup of the school that the student attends as measured by the percent of students who are eligible for the National School Lunch Program. And many of you probably know that this is a measure that’s widely used in education research as a proxy for socioeconomic status. The table on the left shows the average scores for students based on the relative affluence of the school they attend. And the graph on the right shows the percentages of low and top performers attending different types of schools. The average score for students attending a more affluent school -- one where between 0 and 24.9% of students were eligible for free or reduced-price lunch -- was 543. The score is more than 100 points higher than the average score of students attending a school where between three-quarters and 100% of the student body were eligible for free or reduced-priced lunch. The average score for these students was 433. You can also see on the right side how socioeconomic status is related to the proficiency levels. Forty five percent of 15-year-olds attending a more affluent school scored at the top proficiency level. So that’s that blue bar at the bottom. By contrast, 3% of students at lower income schools were top performers. Thirty eight percent of students attending this type of school were low performers. Pretty dramatic. Okay, let’s go on to the next slide. We also have results by students’ race/ethnicity and we found differences there. The table on the left shows average scores for students by race/ethnicity and the graph on the right shows the percentage of students who are low and top performers by race and ethnicity. The average score for black students 422 was about 100 points lower than the average score for white and Asian students which were 524 and 525 respectively. Hispanic students scored more than 80% lower than both white and Asian students. When we look at the makeup of students performing at the highest and lowest proficiency levels, we see similar patterns. There’s a striking contrast between the percentages of black students -- one percent -- and Hispanic students who are top performers -- so 1% for black students and 5% for Hispanic -- when compared to white and Asian students. So you can see there were 16% of top performers were white and 20% Asian. And higher percentage of black and Hispanic students are low performers compared to white and Asian students. Okay. Let’s go on to the next slide. Okay. We also asked students some information about their experiences with money and talking about money and also their experience with financial products. For example, we noted differences based on their experiences -- which may not surprise you. For example, 88% of US 15-year-olds said that they discussed money matters with their parents. And the frequency of those discussions was related to students’ financial literacy. Students who discussed money matters with their parents almost every day scored 41 points higher on average than those who discussed money matters with their parents less frequently -- say on a weekly or monthly basis. A little more than half -- 53% of US students -- said that they had a bank account. Having a bank account was related to better performance. Students with a bank account scored 42% higher on average than those who do not. So, which students are more likely to have bank accounts? Sixty-seven percent of students in higher income schools reported having a bank account, while only 18% of students in lower income schools reported having a bank account. Okay next slide. In the time remaining, I’d like to briefly discuss how the US did in comparison to other countries. Next slide. Yes, thank you. So 15 education systems participated in the financial literacy assessment. I mentioned earlier that PISA has like 70 countries that participate and that’s the case for the core assessments. Financial literacy is optional for countries. And in 2015, 15 education systems I should say participated. So you can see on this map the blue indicated participating countries and then the sort of hashed pinky-red indicates where there was participation of regions within a country. For example in China there were four provinces -- Beijing, Shanghai, Jiangsu, and Guangdong -- participated. Not all of China. And their results are combined into one. And together these four provinces comprise about 16% of China’s population. So it is important to keep in mind this is not all of China. These are four provinces. And then in Canada we had seven provinces, which is comprising about 2/3 of Canada’s population. So there was not representation from all of Canada. In addition to have results for the United States, we also have two US states that opted to have separate samples of their schools and students participate in PISA so they could look at results. And that was Massachusetts and North Carolina. So the results you’ll see for those students are based on students in public schools only in Massachusetts and North Carolina. For the US sample, it’s students in public and private schools. Next slide, please. This chart shows for each of the education systems the average score. And the arrow indicates whether or not that average score was higher or lower or not different from the US average. So what were the results? The US average was not different from the average of the OECD countries that participated in 2015. It was also not different from the average score for Poland and Italy. So that section in green there indicates who we were similar to. But, we were lower than six systems listed in the blue. And then we had six systems that were lower than us, and those are in the yellow. Average scores ranged from a low of 393 in Brazil to 566 in those four mainland provinces in China. North Carolina’s average was not different from the United States. Massachusetts’ average score was higher than the United States. In fact, Massachusetts scored below only two participating systems -- the composite for the four provinces in China and the Flemish community in Belgium. Next slide, please. As I mentioned 10% of US 15-year-olds were top performers scoring at proficiency level five. This was lower than the percentage of students who were top performers in five systems. So if you look at the bars there and you see the countries that have a little asterisk after those numbers, those are the countries that have a higher percentage -- the four provinces in China, the Flemish community in Belgium, the Canadian provinces, Netherlands, and Australia. And then from Poland all the way down to the bottom, those were different than the US but they had lower percentage of top performers. And similar to the average scores, Massachusetts had a higher percentage of top performers and North Carolina was not different from the United States. Next slide. So let’s talk about low performers. As I said before 22% of US 15-year-olds were low performers, meaning they scored below proficiency level two. This was higher than the low performers in four systems. The percentage of low performers in the participating systems ranged from 9% in the four provinces of China to 53% in Brazil. Twelve percent of Massachusetts students scored below proficiency level two, which is significantly lower than the US average. And in North Carolina, 19% of students were low performers, which was not measurably different than the over US average of 22%. Okay. Next slide. That concludes my presentation of the results. Again, thank you for inviting me. And if you have any questions, I’ll believe we’ll be addressing those at the end. Irene Skricki: Yes. Actually Dana there’s one that I think may be very quick that came in via the Q&A function and I’ll just read it to you. What percentage of students actually discuss money matters with parents every day? Do you know if you have that? And we can also circle back. Dana Kelly: We probably have that but I’d have to look it up, which I can try to do while Nicola is speaking. Irene Skricki: Okay. Well let’s have Nicola go and we can circle back to that. And again if not, I assume it’s probably also in the… Dana Kelly: Yes, it’s definitely available. Let me see if I can track it down. Irene Skricki: Okay. Great. Well again if people have questions, continue to send them in via Q&A and then we’ll do voice at the end as well. And now we will turn to - and there’s your organization at the end. And now we’ll turn it to Nicola Myers from the FDIC. Nicola, you’re up. Nicola Myers: Thank you, Irene and thank you Dana. And good afternoon everyone. And thank the CFPB for the invitation. The FDIC’s work with America’s youth is part of our effort to expand access to and use mainstream financial institutions by unbanked and underbanked households in the US. Building relationships in school is a worthwhile strategy. FDIC’s work to engage the next generation is a very important part of its effort to create greater economic inclusion, which will help strengthen the banking system. Building banking relationships in school is a worthwhile strategy because research shows that students have more positive attitudes towards banks and are more likely to have a bank account if there’s a branch of a federally insured financial institution in their schools. So next slide, please. What I’m going to do is give an overview of the FDIC’s Youth Savings Pilot and some of the things that we found out from it. Next slide, please. Thank you. In 2014, more than 20 federal agencies on the Financial Literacy and Education Commission -- also known as FLEC -- recognized that starting financial education early can have long standing benefits for young people and their families. FLEC’s community strategic focus has been to help young people have an understanding of financial basics as they begin their careers. FDIC has been working with its federal partners -- particularly the Consumer Financial Protection Bureau -- on a focused effort to improve financial education and decision-making skills among America’s youth. Our goal is to empower America youth to make better financial decisions to achieve their own goals throughout the stages of their lives. Next slide, please. We know the financial institutions often work with schools to help young people receive financial education. We also know that sometimes, this education is enhanced though access to safe, affordable savings accounts. The FDIC was aware of many of these partnerships and set about to identify how the partnerships formed and implemented. The FDIC led a two-year youth savings pilot designed to identify approaches that help students in grades K-12 develop financial knowledge and good financial habits and attitudes. Nine banks were selected for phase one of the pilot, which covered 2014-15 and 2015-16 school years. These banks were already working with schools or non-profits to help students open savings accounts in conjunction with their financial education program. An additional 12 banks were selected for phase two, which took place during the 2015 to 2016 school year. These banks will begin our expanded youth savings account financial education programs. To learn about the banks and their respective programs, we held over 90 one-on-one calls with the banks and their schools and non-profit partners. We conducted quarterly group calls with all banks to provide an open forum to discuss topics of mutual interest, such as the interagency guidance to encourage financial institutions youth saving programs. And we collected over 50 surveys. And we visited one school branch and learned about the day in the life of the student bankers. Next slide, please. Banks were selected for the pilot based on the degree to which they met the following criteria: one, savings accounts offered met the criteria of the FDIC model safe account template -- particularly the minimum opening deposit amount. Another one is that we focused on youth from families that were more likely to be unbanked and underbanked or low or moderate income. Also, the approaches that encouraged or rewarded positive savings by young people. An onboarding process that presented minimal values to account opening and met regulatory expectations, and also provided relevant and timely financial education. So these are the criteria that for the pilot. We selected a diversity of banks to participate in the pilot. For example, the banks were spread from Hawaii to Vermont and from Texas to Illinois. Banks’ assets ranged from less than 20 million to hundreds of billions of dollars. The banks partnered with inner city, suburban, and rural schools ranging from elementary, middle, and high schools. There were 4,670 youth savings accounts created by these pilot banks during the 2015 to 2016 school year. Next slide, please. The FDIC released the summary of the pilot in March of this year. The report identifies promising approaches and lessons learned from combining traditional, classroom based, financial education with the opportunity to open a safe, low-cost savings account. The report defines a range of models that offer banks flexibility to adapt to varying opportunities to promote the youth savings. For example, there are three banking types -- there’s a school based branch, in-school banking, and banking through a nearby branch. School-based is a branch is actually an official branch was in a school. In-school banking is where the bank employees came into the bank and took up a space such as the library or extra classroom or cafeteria and had banking transactions with the children. And then they nearby branches, where the students actually went to a bank branch to open up an account or to do business transactions. Also, the various account types -- there were the noncustodial accounts where a parent’s signature was not required, there was custodial accounts in which a parent or a guardian’s signature was required, and then the custodial accounts with the school, non-profit partner as a custodian. Next slide, please. So what did we learn? The benefits of a youth savings program go far beyond the dollars and cents in the accounts of school aged children and youth. It improves a child’s financial future. Banks are in a position to offer hands-on learning helping students open a real savings account and manage their own money at an early age. An early introduction to savings in an insured depository institution will help create a firm foundation for their future financial wellbeing. School and non-profits have recognized that financially fit children, youth, and adults help to generate positive change in their communities at large. Teachers have also recognized that youth savings programs have strengthened academic success in related subjects, such as math. Also fulfilling a mission -- strong community involvement is central to many banks’ mission. Bank employees have expressed a strong sense of personal accomplishment from developing, delivering financial education or setting up and maintaining accounts for children and youth. And non-profit partners have stated that youth savings activities are complementary to their financial capability efforts. And then another important aspect is building trust. Youth savings programs can build goodwill toward the bank by helping local residents and businesses see financial institutions as trusted members of the community. Also earning Community Reinvestment Act credit -- banks may receive CRA consideration if they provide youth savings financial education programs primarily targeted to low and moderate-income students. Relationships formed through youth savings programs have extended beyond the program itself, with graduating seniors continuing to bank with them. One bank describes its youth savings program as a long-term investment in future customers. Another bank hired students from the program as full-time employees. Developing banking relationships with parents and school employees, in-school banking for children and youth have resulted in new accounts for adults as well as children. Next slide, please. When considering a partnership to start a savings program, here are some points to consider: identify the objectives -- student bank accounts may address a financial need in the community such as to build college savings or to expand a reach of financial education to students’ families -- to identify core benefits and potential benefits for the program. Pilot participants stressed the importance of strong school and non-profit partnerships. These partnerships were often formed through existing personal and professional relationships. For example, in several instances a school was an established bank customer and a school official approached a bank with the idea of establishing a savings account savings program for their students. In another case, a teacher approached a local branch manager. And in yet another case, a bank president was a member of a local school board and discussed the idea with a school superintendent. In several instances, a non-profit was working with the school and asked the bank to support their efforts by opening bank accounts for the students. Now, there are some potential challenges. Schools and teachers may be reluctant to support what may be viewed as a commercial activity within the school setting. Some may also want to avoid showing favoritism to a specific bank. In response, sometimes a school district will work with multiple financial institutions. Next slide, please. All pilot participants emphasized the importance of making financial education relevant to the student’s lives. For example, they stressed that when discussing financial concepts, it’s important to use age appropriate examples. Students in grades one to three have different goals of course than those in grades nine to twelve. Saving for prom or senior year dues would not resonate for first graders quite like it will for juniors and seniors. Banks found working with teachers allowed them to deliver more relevant and timely financial education and several programs let students serve as financial educators for their peers. Other key lessons were youth savings content must be dynamic, interactive, and fun -- such as through activity-based lessons. We found a lot of that as feedback in terms of needing the active interactive types of learning. Also, align financial education with broader curriculum. Some banks worked with teachers to align existing subject matters -- say for example math, social studies, science, and English language, arts and technology -- with the curriculum. Banks sometimes used a single curriculum and other times used multiple programs. Some banks collaborated with non-profits who used proprietary programs customized to specific cultural nuances. MoneySmart for Young Qeople is the curriculum most commonly cited as the curriculum that was easy to use and digest quickly. Next slide, please. Financial education and school based savings programs introduce young people to financial services at an early age, while helping youth learn how to manage their money more effectively. Youth savings programs not only encourage the development of savings habits at a formative age, but also have the potential to promote economic inclusion for entire families. To support banks’ efforts, the FDIC has launched its Youth Banking Network. This network provides opportunities for banks to learn from others and discuss alternatives, help banks working to connect financial education to savings accounts for school aged children, and give FDIC ideas on how we can customize our educational tools for youth savings. To share educational resources related to youth savings and financial education is part of what the youth banking resource center is for. So these resources can be found at www.fdic.gov/youthsavings. Next slide, please. o that’s my brief overview of the FDIC’s Youth Savings Pilot and the results of it. And thanks for the opportunity. I look forward to any questions that may be there. What I’ll do right now is pass it back to Irene. Irene Skricki: Great. Thank you so much, Nicola and Dana both. And we’re going to really project here. We’ve heard it’s a little hard to hear on our phone, which is surprising because I have never been accused of being quiet and soft. But great, that was terrific. And I’ve seen a couple of really good questions come in, but we’re just going to the last little part of the presentation and then we will turn to questions. So we wanted just to as a parting thing to offer to you is some of the tools that we have for youth financial education that might be helpful to you from the CFPB. And so my colleague Laura Schlachtmeyer, who works on our K12 team and our money as you grow team is going to just show us a few quick resources that the CFPB has that you all can access on our website. So Laura. Laura Schlachtmeyer: Yes, thank you and thanks for all of the information and content that we got from the PISA study and from FDIC. Those are really interesting and important. And as a kind of a companion piece, I think we want to offer some of the things that CFPB has for youth financial education. Go ahead. As you may know, we at the CFPB have developed our foundation for how youth develop financial capability over their childhood. And we have identified three major building blocks that are required -- executive function, financial habits and norms, and financial knowledge and decision-making skills. And I think a lot of what we’ve heard from the prior presentations today is how that have played out in those particular situations in a youth savings account or in the teen years. So this is our foundation for most of how we have developed the materials that we have to offer in this area. Irene Skricki: And I’ll just -- this is Irene -- there is a report on that… Laura Schlachtmeyer: Yes. Irene Skricki: …that you can access the building blocks report. Laura Schlachtmeyer: True. Irene Skricki: So you don’t have to memorize that chart we just showed you. Laura Schlachtmeyer: Right. I would - you can find it on our site. We do have a number of ways that we know to reach youth and help them build the knowledge skills have habits. And so we have three main threads of how we approach this through policy, through practice, and through parents and caregivers. The policy part is where I’ll start. And that is with the resource guide for advancing K-12 education. This is a resource guide. It is a fairly lengthy report that helps you figure out where you are in implementing a financial education program and gives you the resources, some case studies, and some great action steps depending on where you are so far and walks you through the process. You may be right at the beginning with laying the groundwork. For example as Nicola was talking about, there’s a school and a bank. How do you lay the groundwork? How do you make that connection to start a program like that? And then you would start with the section lay the groundwork and find out how to take it from there. And so on through the ability to extend the impact of the program that you’ve built. Also for practitioners, for financial education practitioners, the curriculum review tool can be a very helpful thing. It gives you a set of criteria and a set of guideposts so that you can have a curriculum in front of you and use the resource and the tool inside this report to evaluate that curriculum to see how well that suits the program or the school that you’re a part of. All of these things -- the policy and the practice parts of our youth financial education efforts -- can be found online at our Youth Financial Education page which is easy to find. It’s right next to the Adult Financial Education page that Irene offers as part of FinEx. So you’ll see down there at the bottom it’s consumerfinance.gov/youth-financial-education. Irene Skricki: With dashes. Laura Schlachtmeyer: With hyphens, yes. And then finally the third piece of the youth financial education effort is the resources that we have prepared for parents and caregivers, Money as You Grow. And again, you’ll see when you take a look at this page that it’s built around the same building blocks. It does contain very practical tips, tools, activities, information. If you’re already with the familiar with the Money as You Grow site, it has the content from that site is now at the CFPB. And there’s also blog posts, social media, an email list you can sign up for. And that’s found at again nearby consumerfinance.gov educational resources slash money as you grow. And the Money as You Grow Book Club is something that we’re very pleased to introduce to a lot of people this summer. The idea is that there are children’s books -- this is generally for age four through ten -- and we make the books available. The books are readily available at most libraries and bookstores. We make available a parent guide so the parent can read with the child and then have at their fingertips a set of activities, questions, conversation starters that build toward the building blocks that we talked about and helps jumpstart that conversation between the parent and the child. As we raised in the PISA study, that conversation is a critical factor in a lot of kids’ financial success. Irene Skricki: Great. Laura Schlachtmeyer: There you go. Irene Skricki: Thank you very much, Laura. That was terrific. Again, all of these things are available online. So what we’re going to do now is take questions because we would love to hear what you all think and what your questions are. We have a couple that have come in through the Q&A which I’ll get to in just a second. But first, let me say two things -- one is again if you are not currently getting the CFPB FinEx newsletter that would have let you know about this webinar among other things, you can sign up. Right now on the screen you can see in the middle CFPB_FinEx@CFPB.gov. So email that and just say you want to subscribe. I’ll leave that up there. Also if you want a copy of the PowerPoint, you can send an email to that same address CFPB_FinEx@CFPB.gov and request it. If you send me the request through the webinar, when we end the webinar those emails go away. So you need to send it to the FinEx box and we can make that PowerPoint available to you. So just want you to know that. So let me know ask the Operator, can you tell us how to do voice questions? And we will proceed from there. Coordinator: Certainly. We’ll now begin the question and answer session. If you would like to ask a question, please press star followed by 1 and record your name clearly. Again, that is star followed by 1 to ask a question. And one moment please for our first question. Irene Skricki: Great. And while we’re waiting for any voice questions to come in, we now have three very interesting questions that have come in. I think I will do this one first. No, I’ll do this one first. So do you know who was responsible for getting state financial literary testing coordinated for Massachusetts and North Carolina? Who spearheaded those efforts? Dana, I assume that is for you. Do you know how those states got involved in PISA? Dana Kelly: Sure. Well, they did the financial literacy assessment because they signed up to do PISA. And they - actually Massachusetts has a pretty long history of participating as a state in international assessments. They participated in PISA in 2012 and again in 2015. And we have another international study of math and science at grades four and eight and they’ve participated in that several times. So I think there it was the commissioner of education who just said I want to know how my state does compared to other countries. So they pulled together the funding to do it. The states paid for themselves because we don’t have federal funding for state participation. And as part of participating in PISA, they had the opportunity to do the financial literacy. In North Carolina I think initially interest was maybe from a private organization but I don’t actually know who funded it. I assume it was state dollars. And it was again just an interest in seeing their students in an international light -- not financial literacy particularly but the PISA subjects more generally. Irene Skricki: Right. And Dana I’m going to guess that one of the motives behind that question might be how could my state potentially participate in the future. Dana Kelly: Yes. Irene Skricki: Is PISA being repeated in a few years? And is that something that people might think about trying to encourage their states to be involved? Dana Kelly: Yes, sure. There would still be time to do it in 2018. We’ll be doing PISA again in the fall of 2018. But now is the time. If you think your state is interested, they should be in touch with us at NCES as soon as possible. I believe Massachusetts is thinking of doing it again but I don’t know at this stage of any others. So I don’t know. And they haven’t actually committed formally. I just know they’ve discussed it as a possibility. So it’s not too late. But it would involve doing all of PISA -- reading, math, science, and the financial literacy. Irene Skricki: Okay. That’s helpful. Thank you. Interesting. Okay, I will now turn to a question for Nicola. For the Youth Savings Pilot, do you have any materials that you could share with schools looking to promote similar initiatives with their local banks? So kind of focused on the school audience. Do any of the reports you mentioned kind of address that? Nicola Myers: Yes. The actual pilot report itself will give the instructions for the holistic relationship between the bank and the schools. So it shares information on the different aspects of it and how to go about it. Say for example, you know, the introductions and so forth. So through the report and also the roadmap because the roadmap -- which I didn’t mention -- the how-to, the phases of how the programs are created. And within that, that gives you background information on how setting those objectives that I mentioned and then how the relationships come about. Because it’s not only on the bank side where the bank is providing the financial education if that’s the choice that they make, because the school can actually provide the financial education while they work with the bank who provides the savings vehicle and then vice versa with the bank that provides the financial education. So that report -- the report that I mentioned -- in addition to going to the Youth Savings website, you’ll see the roadmap. That would give to both schools and non-profits in addition to the banks information on how to go about creating a program. And then also the other additional there’s implementation resources also on the youth resource center site. Irene Skricki: Perfect. Great. That’s excellent. Thank you, Nicola. Nicola Meyers: Thank you for that question. And I did in regard to the question for Dana, I was wondering how do states go about, you know, what North Carolina had done also. So I appreciate that question and answer. Irene Skricki: Great. Thank you. Okay. There’s a couple of other online, but let me just see. Operator, are there any phone questions right now? Coordinator: At this time I’m showing no phone questions. And again press star followed by 1 to ask a question. Irene Skricki: Great, okay. Let me read the next online question. I think this one looks like it’s also for Dana. Is there any data on why children of color systematically score lower when it comes to financial literacy? Could it be lack of exposure in the schools and communities? Do you have any thoughts on that topic? Dana Kelly: You know, I think that’s something that we haven’t really looked at yet. You know, it would be possible to look at more about their experiences, the questions that the students answered about their exposure. We don’t - I’m trying to think. Like we can’t really say why but we could describe the students based on, you know, their racial/ethnic background and their experiences. And, you could hypothesize that there was some relationship. I mean, these patterns are not that different than what we see in other subjects. So and also, we know that financial literacy is very closely related to students’ performance in mathematics. So there’s probably also something there. The results for financial literacy are not sort of standing out compared to what we see in other subjects. But I think it’s a good question, and would certainly be helpful for folks like you to better understand how to help improve that. I’m not sure how much we have. I think the first step would be to sort of look more closely at these students and their experiences. Irene Skricki: Right. And Dana as you’re suggesting, a lot of folks on the line or others who are involved in the financial education world may have ideas as well just from their work directly with… Dana Myers: Yes, exactly. Irene Skricki: …schools. We’d love to hear about that. I’m actually going to ask one quick question too just related to that, which is that I know the PISA data, parts of it are actually available to the public, to researchers who might want to do research, right? There’s a public access side of it. Dana Myers: Yes. Irene Skricki: I wonder if - so you might want to let people know if those of you who are researchers or are interested may actually be able to either do some research themselves or look more deeply into the data on their own. Is that correct? Dana Myers: Yes, that’s right. So there are two things that researchers can do. You can access the microdata and really do anything you want with it -- I mean, within reason, within methodological confines. And that’s publicly available. Right now it’s publicly available on the OECD website and I can if anyone wants to contact me, I can direct you to that. We will also be making the data available on the NCES website in a tool we call the International Data Explorer. And that’s really easy to explore. Although having said that, I actually think that the OECD already has an online data tool with the financial literacy data in it. And that tool is really easy because you can just really explore the variables in a very simple way and create your own customized tables and charts. So that would probably be a good place to start. And then if you wanted to do more and you really felt like you needed the microdata -- which would be getting the microdata, the raw data files -- would be important if you wanted to do things like looking at the relationship across subjects or doing any sort of, you know, complex statistical analyses. The data tool does mostly descriptive statistics and simple regression, but nothing beyond that. Irene Skricki: Great. So that sounds like a great resource for anyone who’s in the research field or even those of you who are curious and have lots of spare time. So let’s see. I’m going to just read a comment here which I think is helpful that’s come in through the Q&A function. Someone says, I found financial fairs a really great way to teach high school students. They’re very hands-on learning. And I know the Bureau’s been involved a little bit in fairs where - can you describe some, Laura? Laura Schlachtmeyer: A financial reality fair allows - it’s usually for yes, teenagers or middle school students to experience a day of making financial decisions. And they can, because they force the students to make very difficult trade-offs with limited resources, they can be really illuminating I think for the kids who participate. Irene Skricki: Right. It’s sort of a role-playing thing, right? Laura Schlachtmeyer: Yes. Laura Schlachtmeyer: You get a job and you get a paycheck and… Irene Skricki: Right. We don’t actually send them out in the real world to do that. Laura Schlachtmeyer: It’s from the fair. Irene Skricki: Yes. That’s terrific. Thank you for that idea. I know that’s been a great strategy. Actually building a little bit on that in a way, there’s one more question that’s come in through the Q&A function saying regarding money as you grow book club Laura, are there plans to expand the book club materials to include middle school and high school audiences -- i.e. tweens and teens. Laura Schlachtmeyer: We have been thinking that over. Right now, the book club is aimed at children who are not necessarily reading to themselves -- are still at a stage where their parents are reading to them and that is kind of a natural environment for the conversations about money to take place. So since that tapers off in the middle school and high school years, we’d have to find a way because the purpose of it really is to trigger those conversations within the family about financial decisions and about exchanging opinions and how things work in the household. So we’re kind of trying out some ideas for how to make that how to extend those conversations, yes. Irene Skricki: Yes, I can vouch from personal experience. My teenagers do not want to be read to, but they do want to discuss money as in Mom, can I have some. Laura Schlachtmeyer: Yes. Irene Skricki: Yes, so maybe suggest a different venue. I don’t know. Great. So we’re right at the top of the hour. Let me just quickly see are there any voice questions, Operator? Coordinator: At this time I’m showing no questions. Irene Skricki: Good. That’s perfect because we are right at the end of the call. And we are right at the end of the questions. So I want to thank everybody. I want to thank Dana and Nicola and Laura for speaking. That was terrific and there’s a lot of rich stuff here. And I wish we could just kind of discuss it longer. Again, for any of you who are not in FinEx, CFPB_FinEx@CFPB.gov. Also email that if you want a copy of the PowerPoint or have any other questions. So thank you everybody. This is a great webinar. And I appreciate all of you being with us. We are done. Women: Thank you. Woman: Thank you, Irene. Coordinator: Thank you. And this does conclude today’s conference. We thank you for your participation. At this time, you may disconnect your lines. END NWX-CFPB HQ Moderator: Sharon Mobley 07-27-17/1:00 pm CT Confirmation # 4726953 Page 1