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From Banking and Finance Law Daily, November 6, 2014

Cordray: Financial ‘knowledge is power’

By Katalina M. Bianco, J.D.

Consumer Financial Protection Bureau Director Richard Cordray is promoting the need for financial education for children and adult consumers. Quoting Francis Bacon, Cordray said “knowledge is power,” and financial knowledge can lead to a higher standard of living.

Resources for parents. Speaking before the Financial Literacy and Education Commission, Cordray emphasized the need for tools for parents that will help them properly educate their children on financial wellness. He spoke of the initiative developed by the bureau’s Office for Financial Education, in collaboration with the Federal Deposit Insurance Corporation, Consumerfinance.gov/parents, an online tool that is designed to direct parents to resources that can help them educate their children.

Financial education in the workplace. Financial education is not just for children, Cordray told the Commission. Adults also need help, which is why the CFPB is promoting financial education in the workplace. He noted that recent surveys show that one out of 20 employees admitted to taking time off work in the past year because of financial issues, and more than two out of three employees admitted to spending time at work worrying about their finances. “As any manager knows, focus is the key to a productive employee. But research has shown that employees distracted because of financial distress are less productive, less organized, and more likely to be absent from work,” Cordray said.

The bureau director told the Commission that companies are “warming up” to the idea of financial wellness programs in the workplace and cited a report by the CFPB that provided examples of steps some companies have taken to initiate and drive programs for their employees. “Our aim is to encourage more companies to create and adopt their own plans for providing resources and tools to their employees about how to navigate the financial marketplace,” he said.

Cordray said the CFPB will continue to work with partners such as the Office of Personnel Management and the Department of Labor to get federal agencies to submit a financial capability plan. Once this goal is achieved, the bureau will develop metrics to ensure that the “substance of these plans is being fulfilled through increased take-up by our employees.”

Companies: Financial Literacy and Education Commission.

MainStory: TopStory CFPB CommunityDevelopment

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