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From Banking and Finance Law Daily, August 26, 2014

CFPB urges companies to support workers’ financial health

By J. Preston Carter, J.D., LL.M.

Stating that seven out of 10 American workers say financial stress is their most common cause of stress, the Consumer Financial Protection Bureau has released a report to promote financial wellness in the workplace. The report contains case studies that are designed to educate employers about practices that can improve employees’ financial health and increase worker productivity.

The CFPB noted that employee financial distress following the recent financial crisis has resulted in decreased productivity, increased absenteeism, and ill health. The report says that companies can use financial wellness programs to reduce that distress and support an employee’s overall financial health. According to the report, initial research on financial education in the workplace already suggests that a financially capable workforce is more satisfied, more engaged, and more productive for their employers.

Case studies. Financial wellness programs, the CFPB stated, should educate employees to help them plan out their life goals and make responsible financial decisions to meet these goals. The report describes financial wellness efforts at five companies: Nebraska Furniture Mart, health care provider QLI, Staples, Goodwill of Central Texas, and Pacific Research.

In brief, best practices include:

  • Education at orientation. As part of orientation at Goodwill of Central Texas, new employees complete a Financial Wellness Assessment and participate in a one-hour workshop covering goal-setting, budgeting, and the cost of credit. Also, they can participate in one-on-one-financial counseling and sign up for financial coaching.

  • Coworker support. Pacific Research discovered that work teams that go through financial wellness training together end up supporting each other and creating a more collaborative environment.

  • Leveraging technology. Staples uses an online game called Bite Club, which offers players a chance to manage a nightclub for vampires. As they play, employees must decide between priorities such as investing in a 401(k), paying off student debt, and buying some “bling.”

  • Education programs. QLI, in partnership with the Kansas City Federal Reserve Bank, offers financial training programs that give practical, step-by-step methods of addressing common financial problems.

Companies: Goodwill of Central Texas; Nebraska Furniture Mart; Pacific Research; QLI; Staples

MainStory: TopStory CFPB FinancialStability

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