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From Banking and Finance Law Daily, April 18, 2013

CONSUMER FINANCIAL PROTECTION BUREAU—Cordray Stresses Need for Financial Education in Wake of Crisis

By Katalina M. Bianco, J.D.

The problems experienced by many Americans as a result of the financial crisis were exacerbated by the fact that they were poorly equipped to deal with the growing complexity of financial decisions concerning mortgages and other household credit, Richard Cordray, Director of the Consumer Financial Protection Bureau stated on April 17, 2013. Speaking at the Federal Reserve Bank of Chicago Visa Inc. Financial Literacy and Education Summit, Cordray stressed that "the importance of fostering broader recognition that educational and informational support in matters of personal finance are essential pillars of life as we know it in America."

The CFPB intends to be a source of financial education, Cordray said, and has defined goals to accomplish its mission. First, all consumers must understand basic information about budgets, savings, investments, and credit. The bureau is reaching out to various partners to provide that information and also is developing a library of consumer information at "Ask CFPB.""Ask CFPB" is a forum in which the bureau answers frequently asked questions from consumers about issues in the financial marketplace.

Consumer complaints. The CFPB’s Office of Consumer Response handles complaints about mortgages, credit cards, student loans, auto loans, bank accounts, and credit reporting, with more products and services to be added in the future. Through the office, the CFPB brings consumer concerns to the attention of companies, assists in addressing their complaints, and determines the issues affecting consumers.

The bureau has made its Consumer Complaint Database publicly available with the intention that the database also can be an informational tool for consumers.

Challenges faced by women. Noting that the topic for the summit is the financial empowerment of women, Cordray said that the CFPB is aware that women face some specific challenges. The continuing gender gap in wages is a source of frustration to many working women, raising legal issues of possible gender discrimination and "larger issues about how we define (and are redefining) societal roles."

Women generally live longer than men, Cordray said, which raises issues relating to retirement planning. Women also are the financial decision-makers in a majority of U.S. households, which puts more strain on them to manage difficult budgeting issues. However, "the striking lesson" for the bureau was that most consumer financial issues are not gender-specific, and "for the most part that is how we are approaching the issues of consumer engagement and financial education at the Consumer Bureau."

"[W]e need to stretch beyond our schools to reach all the women—and men—who never had any such training and are sorely in need of resources to help them improve their financial capability," Cordray said

Companies: Visa Inc.

RegulatoryActivity: CFPB EqualCreditOpportunity

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