October 1, 2013
Financial Education: Miles to Go Before We Can Sleep Easily
The CFPB has posted Financial Empowerment Training for Social Service Programs: A Scan of Community-Based Initiatives. The report opens well, with Gail Hillebrand, the Associate Director for Consumer Education and Engagement, noting that
Consumers need four things to be financially empowered. First, consumers need consistent access and the ability to choose among high-quality financial services. Second, consumers need sufficient information about the costs, the benefits, and the risks, of choices in the marketplace. Third, consumers need a set of financial habits and skills that constitute financial capability to help them to make the financial decisions that benefit themselves and their families. Finally, consumers need to know that they can get a better shot at achieving their own life goals if they affirmatively seek information, make choices, and take steps to control their financial lives. (1)
No argument there.
But the “scan” in this document makes me fear for a strong connection between what consumers need, as outlined above, and what existing programs are doing. Finding 9 of the report state that “Most training initiatives targeted at case managers recommended some form of assessment of the effectiveness of the initiatives, but few tracked whether case managers were using this information with clients.” (6-7)
This was the only finding that really talked about evaluating the success of financial education/empowerment initiatives. And it indicates that programs don’t really try to measure their implementation, let alone their effectiveness. I have earlier critiqued (and here) the CFPB’s financial education agenda and this most recent report only strengthens my belief that the CFPB should do more fundamental research on what actually helps consumers make good financial decisions before it begins to fund financial education initiatives.
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