Financial Literacy & Education Commission Holds Quarterly Meeting
On October 18, 2012, the Financial Literacy and Education Commission (FLEC) held its quarterly meeting; FLEC is comprised of the heads of 20 federal agencies, including NCUA and the other financial regulators. Consumer Financial Protection Bureau (CFPB) Director Corday made several remarks regarding financial literacy and the CFPB’s role and responsibilities in addressing the issue. Director Cordray noted that the CFPB is focusing its efforts in the following three areas:
- Assessing what is and is not working, and why, in the area of financial education;
- Helping consumers to understand the importance of the major financial decisions they must make, including paying for college, buying a home, and retiring. “People need to understand that they can't be casual about making some of these larger decisions that are really going to define the contours of their life and their opportunities,” Corday stated.
- Closing the gap between the financial decisions consumers are expected to make—which are often at a high level of complexity and confusion—and the (financial) capability of those consumers to make such decisions—which is often at a much lower level. This requires closing the gap at both ends. At the upper end, the challenge is to make some of these complex decisions closer to consumers’ level of understanding, which can be done through things such as adequate disclosure (e.g., Know-Before-You-Owe). At the other (lower) end, the challenge is to increase the level of consumers’ financial knowledge and understanding.
Each of the FLEC member agencies provided an update on their efforts regarding financial literacy and education, including Tonya Sweat, NCUA’s Director of Consumer Compliance Policy and Outreach. Of note, Sweat mentioned NCUA’s recent updates to its microsite Pocket Cents that is intended to introduce young people to the benefits of credit unions and the importance of setting financial goals.
In addition, Ted Beck, President and CEO of the National Endowment for Financial Education (NEFE) and member of the President’s Advisory Council on Financial Capability, spoke about the importance of having adequate data prior to making decisions regarding the specific direction of financial education efforts.