Alert May 14, 2013

CFPB Releases Policy Recommendations for Financial Literacy of Youth

The CFPB announced the unveiling of its policy recommendations for youth financial education, Transforming the Financial Lives of a Generation of Young Americans, directed to state and local entities for implementation. In announcing the policy recommendations, Director Richard Cordray stated that the CFPB hopes "to spark a national conversation about youth financial capability." The recommendations come as part of an effort to combat the lack of sufficient understanding of major decisions individuals are confronted with in the consumer financial marketplace, by focusing on young people and seeking to make financial education a fundamental element of basic education. The recommendations include:

  • Introducing key financial education concepts early and continuing to build on that foundation consistently throughout the K-12 school years. Additionally, the CFPB encourages states to make a stand-alone financial education course a graduation requirement for high school students.
  • Including personal financial management questions in standardized tests.
  • Providing opportunities throughout the K-12 years to practice money management through innovative, hands-on learning opportunities.
  • Creating consistent opportunities and incentives for teachers to take financial education training with the express intention of teaching financial management to their students.
  • Encouraging parents and guardians to discuss money management topics at home and provide them with the tools necessary to have money conversations with their children.

The recommendations are intended to build on some of the practices currently underway, which include teaching some form of financial education in schools, bank-at-school programs, youth savings accounts programs, non-school based learning, online teaching tools and resources, and additional experiential learning opportunities.