The Consumer Financial Protection Bureau (CFPB) recently issued its Financial Literacy Annual Report for fiscal year 2019, which details the bureau’s efforts toward fulfilling its statutory obligation to help consumers improve their understanding of financial topics.
The report includes statistics regarding consumers’ financial well-being and details the agency’s goals and strategies for improving financial literacy throughout the country. It also includes details about the effectiveness of some of the bureau’s initiatives centered on improving financial literacy.
Among the ways the bureau seeks to achieve its goals is through the launch of its “Start Small, Save Up” initiative, which encompasses the bureau’s new “Savings Boot Camp,” a multi-week email course designed to guide participants through the fundamentals of savings.
The report points to findings of the 2016 CFPB National Financial Well-being Survey, indicating that “even small amounts of liquid savings correlate positively with a person’s financial well-being.” The report also notes a Federal Reserve study which indicated that nearly 40 percent of American adults were unable to cover a $400 emergency expense from savings, and that 12 percent could not cover the $400 expense at all. Another 27 percent indicated that they would cover it by selling something or borrowing money.
The Dodd-Frank Act requires the bureau to report on its work to provide consumers with information to make informed decisions about financial products.
“To carry out its financial education mandate, the bureau seeks to enhance the financial knowledge and skills of all Americans, from childhood to later life, so that individuals can use these new skills to build their financial well-being,” the report states. “The bureau is using a three-part strategy that includes measurable goals and objectives to accomplish this task.”
The bureau highlighted the following three elements of its strategy:
- Providing financial education to the public, directly and by offering more robust financial education locally;
- Sharing research on effective financial education and financial well-being with financial educators and others; and
- Addressing needs for inclusion and financial security of servicemembers and veterans, older Americans, traditionally underserved consumers and communities and students.
The report also describes various tools the bureau offers on its website designed to help consumers learn how to better manage funds and handle major financial events, such as buying a car, buying a home, paying for college and planning for retirement.
It also details several programs the bureau will be offering locally through community libraries and social services organizations. The report’s findings detail the bureau’s effectiveness in reaching consumers through its programs.
According to the report, 12.3 million people use the CFPB’s educations resources online and in print, which is 8 million above the agency’s target goal.