Most consumer finance companies are not sending CFPB Director Richard Cordray a Valentine’s Day card this year. But in the spirit of Valentine’s Day, in today’s post, we highlight a collaborative effort between the CFPB and the financial services industry.
As we all know, the CFPB takes great pride in being the leading voice protecting America’s consumers. Based on the powers granted to it under The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, it has a variety of tools in its toolkit to carry out its mission. Some are heavy handed (which we have discussed here, here and here). However, others take a different approach. One way the CFPB further promotes its mission is to emphasize consumer education.
The CFPB wants capable, educated consumers to drive sound financial decisions. Its philosophy is that by providing information directly to the public, through collaborative educational initiatives, the financial literacy level among America’s consumers will be elevated.
To accomplish this, the CFPB promotes partnerships around the country with schools, libraries, social service providers and community groups. This is in addition to more traditional working relationships with state and local governments.
Two weeks ago, the CFPB announced that it was joining with the Financial Services Roundtable (a creditor trade association) to explore ways to work together to promote effective financial education. The announcement focused on working with schools and teachers to help young people increase their financial skills; with employees through workplace initiatives; and with the 50 million older Americans who are more susceptible to financial predators.
Through partnering with the FSR, the CFPB hopes to focus on “three Rs”—recognize, record and report. The goal is to teach family members and friends how to spot and respond to financial exploitation and scams. The CFPB says that input from FSR members can help it create and improve materials best suited to protect their customers.
This initiative shows that one of the tools in the CFPB’s toolkit is to work with the industry. But, Director Cordray still shouldn’t expect any Valentine’s Day cards from finance companies.