NOVEMBER 2013

Empowering low income 

and economically 

vulnerable consumers

REPORT ON A NATIONAL CONVENING
2 CONSUMER FINANCIAL PROTECTION BUREAU

Message from 

Richard Cordray

Director of the CFPB

Financial products and services play an important role for millions of Americans as they work 

towards economic prosperity. They can help people save for the unknown, manage money safely, 

and invest for the future. When establishing the CFPB, Congress recognized that vulnerable 

populations are frequently unable to fully access the benefits of financial products and services. 

Congress therefore directed the CFPB to pay particular attention to the issues faced by traditionally 

underserved Americans.

At the CFPB, we take this mission very seriously. We established the Office of Financial 

Empowerment to focus on low-income and other economically vulnerable consumers. To ensure 

that our work is informed by the insights, research, and promising practices from across the 

country, the CFPB’s Office of Financial Empowerment held a national convening on November 28-

29, 2012. We were joined by more than one hundred representatives of financial institutions; 

federal, state and municipal government; industry innovators; researchers; funders; regulators; 

and consumer advocates. Participants shared ideas about the barriers that prevent millions of 

Americans from accessing the full benefits of financial products and services, and about ways to 

overcome those barriers. This input is helping to guide our work at the Bureau.

Moving forward, we have a broad plan to help the most vulnerable. We aim to support access to 

financial services, transparency to evaluate products, financial capability to choose wisely, and 

trusted advisors whom consumers can seek out for help. We are using our tools to shape the 

marketplace so that consumers no longer encounter deception, dead ends, debt traps, or 

discrimination. We recognize that we have much to learn about how best to help the most 
3 CONSUMER FINANCIAL PROTECTION BUREAU

vulnerable populations. To build this knowledge, we will look to evidence-based research and those 

who serve vulnerable populations on the front lines.

While this work will be challenging, we are excited to work with nonprofits, other government 

partners, and financial institutions to ensure that all Americans can enjoy the benefits of access to 

quality financial products and services as well as economic opportunity in our country.

Sincerely, 

Richard Cordray
4 CONSUMER FINANCIAL PROTECTION BUREAU

Table of contents

Message from Richard Cordray ................................................................................ 2

1. Executive summary ............................................................................................. 7

1.1 Key insights .............................................................................................. 8

1.1.1 Access to financial services............................................................ 8

1.1.2 Access to credit.............................................................................. 8

1.1.3 Financial outcome metrics ............................................................ 9

1.1.4 Scale: defining it, planning for it, achieving it.............................10

1.2 Next steps: Advancing the field of financial empowerment .................. 11

1.2.1 Tools for the field: Training for social services staff.................... 11

1.2.2 Research .......................................................................................12

1.2.3 Collaboration: Federal partnerships ............................................13

2. Introducing the Office of Financial Empowerment ......................................... 14

2.1 Defining financial empowerment ...........................................................16

2.2 Two dimensions of empowerment: Building financial capability and 

transforming the marketplace ................................................................ 17

2.3 From listening sessions to the convening: Learning from the financial 

empowerment field .................................................................................19

2.4 Work in progress and on the horizon .................................................... 20

3. Access ................................................................................................................ 23

3.1 Access to basic financial services ........................................................... 23
5 CONSUMER FINANCIAL PROTECTION BUREAU

3.1.1 Barriers to accessing the formal banking system ....................... 25

3.1.2 Financial-institution barriers...................................................... 26

3.1.3 How can financial providers expand service to underserved 

markets? ...................................................................................... 29

3.1.4 Innovation and the Consumer Financial Protection Bureau.......37

3.1.5 Technology with a human face: combining low-touch and hightouch ............................................................................................ 38

3.2 Access to credit....................................................................................... 39

3.2.1 Weathering emergencies with scant assets................................. 39

3.2.2 Credit scores and credit reports: Gateways to access ................. 40

3.2.3 Consumers suffer by not understanding credit reporting ...........41

3.2.4 Improving accuracy and transparency........................................ 43

3.2.5 Improving credit profiles ............................................................ 44

3.2.6 Building the capacity of consumers: action and education........ 45

4. Financial outcome metrics................................................................................ 48

4.1 The challenge: Defining, measuring, and increasing financial success 48

4.1.1 Uniform standards and success indicators have been elusive ... 48

4.1.2 Success for individuals, for communities, and in the 

marketplace ................................................................................. 49

4.1.3 From “Program Deliverables” to an integrated approach .......... 50

4.1.4 Similar goals, different language..................................................51

4.1.5 Consumer behavior and attitudes ................................................53

4.1.6 Challenges and “moving the needle”............................................53

4.1.7 Advancing the field: standardizing, sharing, and aggregating 

information.................................................................................. 56

4.1.8 Potential roles for government: Consult, convene, and 

coordinate.................................................................................... 58

4.1.9 Learning from international experience ..................................... 60

4.1.10The role of the CFPB.................................................................... 62

5. Scale: Defining it, planning for it, achieving it................................................. 63
6 CONSUMER FINANCIAL PROTECTION BUREAU

5.1 Defining scale ......................................................................................... 63

5.1.1 Perspectives of government, business, and the nonprofit sectors64

5.1.2 Preparation and strategic planning............................................. 64

5.1.3 Government initiatives................................................................ 68

5.1.4 National perspectives: Federal policies and program 

opportunities ............................................................................... 70

6. Conclusion: Advancing the field of financial empowerment ......................... 73

6.1.1 Tools for the field: training social services staff ..........................73

6.1.2 Research .......................................................................................74

6.1.3 Collaboration: Federal partnerships ............................................76

APPENDIX A: Consumer Financial Protection Bureau Resources ...................... 77

APPENDIX B: Convening Agenda........................................................................... 78
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1. Executive summary

The Consumer Financial Protection Bureau helps consumer finance markets work by making 

rules more effective, by consistently and fairly enforcing those rules, and by empowering 

consumers to take more control over their economic lives. The Office of Financial 

Empowerment, part of the Consumer Education and Engagement division of the Bureau, 

focuses on low-income and economically vulnerable consumers. To be financially empowered, 

consumers need access to high-quality financial products and services, sufficient information 

about choices in the marketplace, the capability to make good financial decisions that benefit 

themselves and their families, and – when required – access to trusted advisors to help navigate 

a complex financial marketplace. 

The low-income and economically vulnerable population includes as many as 100 million 

people, many of whom are unbanked, underbanked, or have thin or no credit files.1 These 

consumers are diverse by culture, geography, stage of life, and financial status. Over the last 

decade, initiatives to enhance the financial stability of this population have multiplied and 

shown promise. But there is as of yet no strategy on a national scale that addresses the unique 

consumer financial product and service needs of low-income and economically vulnerable 

consumers. 

As a step toward helping to formulate this strategy and its implementation, the CFPB’s Office of 

Financial Empowerment hosted a national convening in Washington, DC on November 28-29, 

2012. This gathering built on a series of listening sessions and roundtables that Financial

 

1

 FDIC, 2011 National Survey of Unbanked and Underbanked Households 4 (2012), available at 

http://www.fdic.gov/householdsurvey/2012_unbankedreport.pdf (“Unbanked households are those that lack any 

kind of deposit account at an insured depository institution. Underbanked households hold a bank account, but also 

rely on alternative financial services (AFS) providers.”). 
8 CONSUMER FINANCIAL PROTECTION BUREAU

Empowerment staff conducted across the country in the preceding months. At the convening, 

CFPB Director Richard Cordray spoke, and panelists included representatives from financial 

institutions, federal, state and municipal government, industry innovators, researchers, funders, 

regulators, consumer advocates, senior CFPB staff and others. The plenaries and working 

sessions framed three themes: access to financial services and products, measurement of 

program outcomes, and pathways to scale. 

This report is intended primarily to summarize the views expressed by participants at the 

convening as well as in the listening sessions and roundtables that preceded the convening. 

While the Bureau has learned much from those who shared their experience with us, this report 

seeks to capture rather than endorse their observations and conclusions. 

1.1 Key insights 

1.1.1 Access to financial services

Consumers with low incomes face a number of policy-related, institutional, and personal 

barriers that restrict their access to the financial system. Institutional barriers range from lack 

of physical access, identification requirements, unaffordable service fees, and lack of products 

that align with their needs. Participants suggested that financial institutions and service 

providers can pursue several strategies to counteract barriers to accessing basic financial 

services, including actions to:

 Better understand the needs of the consumer and create products that fit those needs,

 Meet consumers where they are, sometimes away from the branch in the community,

 Engage with partners that already serve low-income consumers, to build trust, 

 Provide incentives for participation in the mainstream financial system,

 Craft technology solutions that work for low-income consumers, and 

 Maintain engagement for consumers who are not technologically proficient or prefer the 

human touch.

1.1.2 Access to credit

Consumers with low incomes are less likely than other consumers to be able to access affordable 

credit; they often use high-cost alternative products to meet their needs. Several features of the 
9 CONSUMER FINANCIAL PROTECTION BUREAU

credit market are particularly challenging for many consumers with low incomes. Some of the 

biggest barriers include their inability to qualify for loans because they have little, poor, or no 

credit history; lack of general understanding about credit and the type of loans that would be 

most useful; lack of knowledge about how to correct their credit reports or improve their scores; 

and a general perception that the credit system is inaccessible to them. Participants reported 

that consumers could greatly benefit from: 

 Increased access to credit reports and scores, 

 Specialized financial education, and

 More accessible and affordable products and services that are tailored to fit their credit 

needs and capacity to repay. 

1.1.3 Financial outcome metrics

There is wide agreement among stakeholders in the empowerment field that it is extremely 

important to have accurate and descriptive outcome and impact metrics to measure consumers’ 

progress. There is agreement as well on the need to improve and possibly standardize outcome 

measures so that various approaches can be compared. But it is difficult to establish uniform 

standards to measure progress toward financial empowerment because of the variety of 

strategies and interventions used and the multiple dimensions of human situations. Inside 

many service organizations, there are institutional challenges to generating consistent 

information. These include inexperience in evaluation, lack of capacity, lack of funding, and 

privacy concerns. To address some of the challenges, participants suggested:

 Dedicating more funding for evaluation and separating it from funding for service 

delivery,

 Clarifying why and how metrics help the initiative succeed,

 Engaging consumers and clients by using metrics, 

 Understanding the client base and how it is evolving, and

 Timing the collection of program outcome data so that it serves the client, the service 

provider, and the researcher alike.

Convening participants identified several roles that government could play in rationalizing 

financial-empowerment data collection, including: 

 Improving the accuracy and consistency of outcome data to make it more credible,

 Connecting practitioners with professional evaluators, 
10 CONSUMER FINANCIAL PROTECTION BUREAU

 Creating a financial health index that could be used as a standard in the field,

 Enhancing existing national financial surveys to include more empowerment indicators, 

and

 Creating a mechanism to expand knowledge-sharing within the empowerment field. 

1.1.4 Scale: defining it, planning for it, achieving it

Participants defined scale in a variety of ways: penetration within a specific population; reaching 

large numbers of people; and/or increasing efficiency to reduce the unit costs of service delivery. 

Among the identified barriers to achieving scale were misaligned public policies, lack of 

sufficient infrastructure, and resource limitations that constrain growth. To address these 

barriers, participants suggested: 

 Leveraging partnerships to increase capacity and efficiency,

 Aligning incentives for both users and key stakeholders to maximize benefit,

 Defining success measures and establishing benchmarks in advance,

 Improving information-collection systems to better analyze cost, and 

 Using universal design principles to create efficient and equitable delivery systems. 

Public policy can play a major role in advancing or hindering scale. An example of a limiting 

factor is the complex system of asset limits for recipients of public benefits; these vary by benefit 

type and from state to state. Concerns about these varying limits may cause consumers anxiety 

that impedes savings and participation in the financial mainstream. Because consumers have to 

observe different sets of rules depending on where they are or the benefits they rely upon, it is 

more difficult for providers to standardize and scale up empowerment strategies and 

interventions. 

On the other hand, government can be a leader in advancing scale. Examples include efforts by 

the U.S. Department of Health and Human Services’ Administration for Children and Families 

and the U.S. Department of Labor to incorporate financial empowerment and asset-building 

strategies into major assistance and employment training programs.
11 CONSUMER FINANCIAL PROTECTION BUREAU

1.2 Next steps: Advancing the field of 

financial empowerment 

The field of financial empowerment has come far in the last decade. New initiatives have 

multiplied, fostered by non-profits, governments and social entrepreneurs. Despite this 

progress, financial empowerment is still an emerging field. More rigorous research has begun to 

validate approaches that have been producing promising outcomes on a smaller scale. But there 

is much to be learned, and much more to be tested before the financial empowerment field can 

produce tangible, measurable improvements in the financial lives of millions of low-income and 

economically vulnerable consumers. 

The Office of Financial Empowerment is a new team in a still-new agency with a broad mission. 

Our convening in November 2012 suggested ways in which we can accelerate the positive 

momentum that so many in the field have initiated. In the months and years ahead, the Office 

of Financial Empowerment will direct its attention toward deploying tools for the field; 

researching what works; exploring collaborations that can bring financial empowerment to a 

new level; and bringing the voice of low-income and economically vulnerable consumers into 

the Bureau’s work. 

1.2.1 Tools for the field: Training for social services staff 

Our work has been shaped by the listening sessions we have participated in around the country. 

We learned that case managers and front-line staff in the social services field, who were not 

specifically trained in financial empowerment skills, often felt unprepared and reluctant to 

discuss with their clients key issues such as budgeting, debt and savings issues. 

To identify promising practices in the field, we commissioned a scan of programs that provide 

financial empowerment training to case managers. We have used that information to guide our 

creation of a training curriculum and a toolkit that case managers can use with clients. The 

toolkit aims to increase case managers’ ability to assess clients’ financial situations and provide 

the right tools or referrals at the right time. It will also help case managers understand how to 

link clients to the Bureau’s tools and resources. 

In 2013, we are testing the curriculum and toolkit through community-based trainings for case 

managers, revising it as appropriate based on the feedback we receive. After testing and 

revision, we plan to make the full toolkit available to social services agencies and other service 

providers who can customize it to meet the needs of their staff and clients. 
12 CONSUMER FINANCIAL PROTECTION BUREAU

1.2.2 Research

The Bureau is engaged in a variety of efforts to advance our knowledge of the state of the field. 

Our initiatives range from broad scans of promising products and services, to rigorous 

evaluations of new approaches that respond to consumer demand in the marketplace. 

FINANCIAL CAPABILITY

We have learned of a number of promising approaches to building financial capability that 

combine or “bundle” financial products and/or integrate these with financial services. However, 

we have found little rigorous research that indicates what is effective. To help fill this gap, we 

have contracted for a three-phase information-gathering project to inventory current initiatives, 

analyze selected projects, and pilot projects that aim to capture and build upon best practices we 

have identified. 

TAX-TIME SAVINGS AND ASSET-BUILDING 

During the 2012 tax season, we worked with the CFPB Office of Financial Education (OFE), the 

Internal Revenue Service and three selected sites around the country on an initiative to 

encourage those consumers eligible for the Earned Income Tax Credit (EITC) to save a portion 

of their refunds in qualified savings vehicles. In 2013-14, Empowerment and OFE will ramp up 

Bureau efforts by engaging more sites and providing communications and training tools for 

volunteer tax preparers and consumers. 

ADVANCING MEASUREMENT OF PROGRAM EFFECTIVENESS

The many public and private programs that aim to increase the financial capability of lowincome and economically vulnerable populations use a variety of standards and measures to 

assess their success. Responding to feedback from many stakeholders, the CFPB’s Office of 

Financial Education is working with the Office of Financial Empowerment and Office of 

Research on a multi-year project to lay the foundation for metrics to assess the financial wellbeing of consumers. The Office of Financial Empowerment is reviewing public and private 

programmatic outcome measures to inform our work on integrating financial empowerment 

tools into existing service delivery systems. Our initial steps include:

 Reviewing public and private programs to identify existing outcome measures,

 Identifying the most appropriate measures to track success in federal programs, and

 Conducting outreach to stakeholders, including government agencies and the private 

sector, to identify strategies to better coordinate efforts.
13 CONSUMER FINANCIAL PROTECTION BUREAU

1.2.3 Collaboration: Federal partnerships

Because federal services are accessed by millions of consumers, we see the potential to achieve 

large-scale impacts for low-income and economically vulnerable populations by collaborating

with federal agencies to integrate financial empowerment tools into their delivery systems for 

services like job training.

Working initially with the departments of Health and Human Services, Housing and Urban 

Development, Labor, and Treasury, our approach attempts to leverage existing programs that 

serve specific populations, such as persons with disabilities, youth aging out of foster care, and 

other programs. Specifically, we will aim to integrate our strategies where existing government 

services address major life-cycle transitions, such as entry into employment. We will work to 

embed information and resources on consumer protection, access to financial products and 

services, money management, credit management, and saving and asset building.

We see these projects as only the beginning. The CFPB, its Division of Consumer Education and 

Engagement, and its Office of Financial Empowerment are committed to helping inform and 

improve policies and practices in order to reduce barriers for low-income and vulnerable 

populations, and to open up new opportunities for consumers to become more financially 

capable and secure.
14 CONSUMER FINANCIAL PROTECTION BUREAU

2. Introducing the Office of 

Financial Empowerment

The Office of Financial Empowerment is one of six offices that make up the Division of 

Consumer Education and Engagement of the Consumer Financial Protection Bureau. Within 

the division, we work alongside and in close cooperation with the offices of Financial Education 

and Consumer Engagement, which serve the American public broadly, and three other 

population-focused offices: the offices for Students, Older Americans, and Servicemember 

Affairs. 

The three population offices focus on clearly-delineated groups of consumers. The work of the 

Office of Financial Empowerment is guided by the Dodd-Frank Act mandate to provide

“information, guidance, and technical assistance regarding the offering and provision of 

consumer financial products or services to traditionally underserved consumers and 

communities.”2 The term “traditionally underserved consumers” includes unbanked and underbanked consumers.3

 Our office attempts to encompass the variety of populations who lack full, 

affordable access to financial services, including people with low- to moderate- incomes; low

wealth; thin credit files; or people who are in other ways financially excluded or vulnerable. 

These categories are not exhaustive, nor are they mutually exclusive. But by any measure, the

 

2 12 U.S.C. § 5493(b)(2).

3 See 12 U.S.C. § 5493(b)(1)(F).
15 CONSUMER FINANCIAL PROTECTION BUREAU

number of consumers whose financial stability is tenuous constitutes a significant portion of the 

U.S. population.4

 According to 2011 US Census data, some 46 million people, including children, live in 

households that have incomes below the federal poverty level. 5 6

 An additional 60 million people, including children, live in households that have income 

that is, while higher, below twice the poverty level.7

In addition:

 A 2012 study calculated that 43.9 percent of households (132.1 million people) lack the 

savings to cover basic expenses for three months if unemployment, a medical emergency 

or other crisis leads to a loss of stable income.8

 The FDIC’s 2011 “National Survey of Unbanked and Underbanked Households” found 

that 8.2 percent of households have no bank account, and 20.1 percent are 

“underbanked” meaning those households that have a checking and/or a savings account 

and had used non-bank money orders, non-bank check cashing services, non-bank 

remittances, payday loans, rent-to-own services, pawn shops, or refund anticipation 

loans (RALs) in the past 12 months.

9

 

4 According to the US Census Bureau the estimated population of the US in 2012 was about 314 million. US Census 

Bureau, Annual Estimates of the Population for the United States, Regions, States, and Puerto Rico: April 1, 2010 

to July 1, 2012, http://www.census.gov/popest/data/state/totals/2012/tables/NST-EST2012-01.xls (last visited 

Sept. 11, 2013).

5 Carmen DeNavas-Walt, Bernadette D. Proctor & Jessica C. Smith, Income, Poverty and Health Insurance Coverage 

in the United States: 2011, at 13-14 (2012), available at http://www.census.gov/prod/2012pubs/p60-243.pdf.

6 In 2012, the poverty level for a family of four was about $24,000 per year. US Census Bureau, Poverty Thresholds 

Data (2012), http://census.gov/hhes/www/poverty/data/threshld/thresh12.xls.

7 DeNavas-Walt et al., supra note 5, at 18, table 5. 

8 CFED, Assets & Opportunities Scorecard, Living on the Edge: Financial Insecurity and Policies to Rebuild 

Prosperity in America 3 (2013), available at

http://assetsandopportunity.org/assets/pdf/2013_Scorecard_Report.pdf.

9 FDIC, supra note 1, at 4. 
16 CONSUMER FINANCIAL PROTECTION BUREAU

 Finally, about 25 percent of American adults – approximately 50 million people – lack 

sufficient traditional credit data to generate a FICO10 score, and as a result may find it 

very difficult to obtain loans at affordable rates.11

This population is not only large -- it is extremely diverse. It is urban and rural, U.S.-born and 

immigrant, old and young. There is no single financial product, stage of life, or life event that 

defines and encompasses the low-income and economically vulnerable populations. Lowincome consumers face many of the same challenges faced by other consumers, including those 

that are served by the CFPB’s other population-focused offices – older Americans, students, and 

servicemembers. But economic fragility accentuates these challenges for many low-income and 

economically vulnerable consumers, creating daunting obstacles, day to day and month to 

month.

2.1 Defining financial empowerment

Part of the CFPB’s mission is to empower all consumers in the financial marketplace. The Office 

of Financial Empowerment has identified four basic challenges experienced by low-income and 

economically vulnerable consumers. 

ACCESS

Low-income and economically vulnerable consumers may face a lengthy list of obstacles and 

barriers in shopping for and obtaining financial services to help them reach their goals. Some 

barriers are physical or geographic – for example, the lack of financial institution branches in a 

low-income urban neighborhood or in a rural area, where public transportation is limited. 

Other barriers to access may include language; financial obstacles such as high fees or required 

minimum balances for deposit accounts; a lack of appropriate products; past problems 

 

10 FICO, or the Fair Isaac Corporation, is a company that provides credit-scoring models to help financial services 

companies assess consumers’ creditworthiness. FICO, About Us, 

http://www.fico.com/en/Company/Pages/about.aspx (last visited Sept. 17, 2013). 

11 FICO, FICO Expansion Score, http://www.fico.com/en/Products/Scoring/Pages/FICO-Expansion-Score.aspx

(last visited Sept. 17, 2013) (“The FICO Expansion Score predicts credit risk for consumers without FICO scores by 

bringing together data in real time from alternative credit data sources.”).
17 CONSUMER FINANCIAL PROTECTION BUREAU

managing and maintaining positive balances in checking accounts; distrust of mainstream 

financial institutions; lack of required identification or proof of residency; or limited or no 

internet access. 

FINANCIAL CAPABILITY

Because they lack financial resources, many low-income consumers have less opportunity to 

effectively engage with the mainstream financial system. The lack of formal financial education 

may make it still harder for them to use the financial system to meet their goals. 

MARKETPLACE INFORMATION

Beyond a general level of financial education, consumers need specific information about the 

products and services available in the marketplace. However, low-income consumers are 

sometimes disadvantaged by language barriers, low levels of literacy or numeracy, disability, or 

other factors in seeking to access such information. These challenges may be amplified if 

consumers are exposed to aggressive, unclear, or misleading marketing practices that are 

present in certain segments of the market. 

TRUSTED ADVISORS AND ADVOCATES

Given the volume and variety of financial products and services, most consumers can benefit 

from access to trusted, knowledgeable advisors at some point in their lives to help them navigate 

the marketplace. This is especially true for low-income consumers. Further, if they fall victim to 

fraud, identity theft, deceptive marketing, prohibited debt collection efforts, or other financial 

problems, low-income and economically vulnerable consumers may lack the resources or 

capability to remedy these problems by themselves. Here, too, a trusted advisor or advocate 

may be essential to financial empowerment. 

2.2 Two dimensions of empowerment: 

Building financial capability and

transforming the marketplace

One dimension of empowering low-income and economically vulnerable consumers includes 

ensuring they have information, tools, education, and resources to help them choose affordable, 

appropriate financial products and services, thus enabling them to build their financial 
18 CONSUMER FINANCIAL PROTECTION BUREAU

capability and reach their life goals. It means fostering appropriate and informed choices to 

help them improve their financial lives. 

Another dimension of financial empowerment is protection. Self-protection can be the most 

immediate form of consumer protection. The financial challenges faced by low-income and 

economically vulnerable consumers would be lessened if they were able to avoid problems in the 

first place, or knew what to do when they do experience a problem. But they, like all consumers, 

need a transparent and fair marketplace where the rules are enforced consistently and 

evenhandedly -- one where consumers know upfront the benefits and costs of their choices and 

where financial enterprises do not engage in unfair, deceptive, abusive or discriminatory acts 

and practices. 

The CFPB has a unique set of tools to empower consumers to take control of their economic 

lives. Its rulemaking, supervision and enforcement powers extend both to certain large 

depositories like banks, thrifts, and credit unions, but also to non-banks like mortgage 

originators and servicers, debt collectors, private student lenders, and consumer reporting 

agencies.12 The CFPB’s consumer response team helps resolve complaints and fields tens of 

thousands of questions annually from consumers about their problems and concerns with 

financial services.13 Consumers can find answers to about 1,000 frequently asked questions 

through AskCFPB on CFPB’s website: http://www.consumerfinance.gov/askcfpb/. 

 

12 See 12 U.S.C. §§ 5512, 5514, 5515, 5531.

13 12 U.S.C. § 5534; see also CFPB, Consumer Response: A Snapshot of Complaints Received (2013), available at

http://files.consumerfinance.gov/f/201307_cfpb_snapshot_complaints-received-july.pdf.
19 CONSUMER FINANCIAL PROTECTION BUREAU

2.3 From listening sessions to the 

convening: Learning from the financial 

empowerment field

Notwithstanding the capabilities of the CFPB, we recognize that the Bureau alone cannot 

address the magnitude, diversity, and depth of financial vulnerability among low-income 

consumers. Fortunately, there are thousands of organizations across the country engaged in 

developing, testing, and implementing initiatives designed to help consumers achieve greater

financial stability. 

Soon after the Office of Financial Empowerment was established in 2012 we set out to learn 

about these efforts first-hand, from local practitioners. We conducted (and continue to conduct) 

listening sessions around the country to learn about the specific and most pressing financial 

challenges faced by low-income consumers, and, the local responses to these challenges. We 

learned about promising products, service strategies, and combinations of both, from humanservice providers, financial institutions, regulators, community advocates, and researchers. Our 

initial listening tour gave us an on-the-ground perspective of the key issues facing the financial

empowerment field. 

The next step in our information gathering was to convene experts who are currently working in 

the financial empowerment field. On November 28-29, 2012, we brought together 

representatives of local and national nonprofit social service organizations, large and small

banks, credit unions, community development finance institutions (CDFIs), funders, 

researchers, regulators, government agencies and policy advocates. Our broad goals were to 

assess the state of the field, determine priorities and potential for common work, and identify 

areas where the CFPB can add value. 

Participants at the convening welcomed the opportunity to exchange ideas and actively engage 

across sectors and institutions. For example, in one plenary session we brought together the 

CDFI Fund -- which provides the resources to expand financial services to low-income 

consumers -- with the four prudential banking regulators. In another session, we brought senior 

officials of two cabinet-level agencies -- the departments of Labor and of Health and Human 

Services -- together with direct- service providers to low-income and economically vulnerable 

populations. 
20 CONSUMER FINANCIAL PROTECTION BUREAU

We held our convening at the CFPB headquarters in Washington, DC to better introduce 

attendees to the full range of the CFPB’s tools. Our listening sessions around the country had 

taught us that the full scope of the CFPB’s work and resources are not yet widely known, even by 

many well-informed consumer advocates, financial service professionals, and officials of state 

and local governments. To address this issue we featured a keynote presentation by the CFPB’s 

Director, Richard Cordray, as well as plenary presentations by representatives of our offices of 

Supervision, Fair Lending, Enforcement, and Consumer Response. Our colleagues from the 

Bureau’s offices of Financial Education, Research, Communications, Fair Lending, Supervision, 

Enforcement, and Consumer Engagement also facilitated and participated in working sessions. 

We did not approach the convening with a single solution, nor did we expect to end with one.

We defined three themes to guide our discussion - access, financial outcome metrics, and scale -

because these themes are all inter-related and are equally critical to our overall goal of 

increasing financial empowerment. Our objective was to begin formulating strategies that will 

provide new, more expansive empowerment opportunities for the many millions of low-income 

and economically vulnerable consumers. 

There are hundreds of promising initiatives underway across the country with the potential to 

improve the financial lives of people in this population. The CFPB’s goal is to begin to answer 

key questions that will help the field achieve scale, including these: What program-level 

outcome data is available about promising approaches? What is needed to assess the validity of 

these initiatives and expand the availability of those that are most cost-effective? What are the 

existing and emerging access points and on-ramps to financial empowerment for low-income 

people? By bringing together a broad cross-section of engaged experts, our hope was to better 

frame these questions, to further shape the priorities for our office, and to identify opportunities 

for shared work with those already involved in the field. 

2.4 Work in progress and on the horizon

Gail Hillebrand, the Associate Director for the CFPB Division of Consumer Education and 

Engagement, summarized our work in her welcoming remarks at the convening: “Financial 

Empowerment focuses on the programs, products, and policies that will help low-income and 

economically vulnerable consumers improve their financial lives.” 
21 CONSUMER FINANCIAL PROTECTION BUREAU

DEVELOPING FINANCIAL-EMPOWERMENT TOOLS 

Through our listening sessions, we learned that front-line direct service staff and case managers

who serve low-income consumers often feel ill-equipped to inform their clients about resources 

that can help improve their financial lives, such as the Earned Income Tax Credit (EITC) or 

budget-management tools. Responding to this need, we have begun to develop toolkits for a 

training program to help these workers get the knowledge they need to serve confidently as 

trusted advisors and guides for their customers and clients. 

RESEARCH 

The Bureau is committed to expanding our knowledge about what works. 

 We are continuing to hold listening sessions, roundtables, and other events around 

the country to gather insights and information from local practitioners and other 

stakeholders to assess progress and help strengthen the field. 

 We have commissioned a scan to help identify and evaluate products, servicedelivery models, and other approaches -- some at a small scale -- that have the 

potential to assist low-income consumers. In coordination with the Office of 

Financial Education and Office of Research, we are working on projects to test 

ways of enhancing consumer decision-making to increase financial stability. One 

effort aims to encourage use of free tax-preparation sites and to encourage savings 

at tax-filing time by prompting people to get ready to save before going to a tax 

preparation site.

PROMOTING FEDERAL COLLABORATION

Federal programs touch the lives of tens of millions of low-income and economically vulnerable 

consumers. For example, in 2012, 47 million Americans received benefits through the 

Supplemental Nutrition Assistance Program (formerly food stamps). 14 A number of federal 

agencies have recognized the value of the concepts and tools of financial empowerment and have 

 

14 Cong. Budget Office, An Overview of the Supplemental Nutrition Assistance Program (Apr. 19, 2012), 

http://www.cbo.gov/publication/43175.
22 CONSUMER FINANCIAL PROTECTION BUREAU

begun to incorporate them into their programs.

15 Our office is working to inventory these 

initiatives, to explore the development of common goals and program metrics, and to help make 

financial empowerment an integral part of their work. 

The national convening provided many insights to inform our work. We look forward to 

continued collaboration with the dedicated practitioners, researchers, financial institutions, 

advocates, and supporters who are working every day to make financial empowerment a reality 

for low-income and economically vulnerable consumers. 

 

15 U.S. Dep’t of Labor Office of Disability and Emp’t Policy, Financial Education, Asset Development, and Work and 

Tax Incentives, http://www.dol.gov/odep/topics/FinancialEducationAssetDevelopment.htm (last visited June 19, 

2013) (“Financial education and asset development are critical to improving the economic self-sufficiency of all 

workers, and may be especially important for people with disabilities.”). 
23 CONSUMER FINANCIAL PROTECTION BUREAU

3. Access 

3.1 Access to basic financial services

Empowering low-income consumers through access to financial markets has several fundamental 

elements. It includes ensuring that people have more affordable options to pay bills and make 

purchases; that they are able to send and receive money safely at a reasonable cost; that they can

obtain and use fair, affordable credit; and that they can save. As CFPB Director Richard Cordray 

remarked to the convening participants:

There is value to establishing and maintaining a relationship with the formal banking 

system... Over time you build a history, [where] you can build a profile which can lead to 

lower interest rates for you and greater access to credit and other benefits. [It’s] very 

significant. And people who are outside the banking system tend to operate transaction by 

transaction. They lose all benefit of that relationship. They're anonymized.16

Despite the benefits of this relationship, the most recent FDIC study on unbanked and 

underbanked households found that 8.2 percent of U.S. consumers were “unbanked” as of 2011, 

while 20.1 percent were “underbanked,” which meant that they used financial service providers

other than banks and credit unions, some of which were high-cost.

17 Surveys have shown that at 

 

16Richard Cordray, Director, CFPB, Keynote Speech at Day Two of the CFPB Office of Financial Empowerment 

Convening (Nov. 29, 2012).

17 FDIC, supra note 1, at 14-15.
24 CONSUMER FINANCIAL PROTECTION BUREAU

least a portion of these households use alternative financial services by choice, because of 

convenience, the small incremental cost, or other factors.18

Convening attendees identified four main reasons why unbanked and underbanked households 

may benefit from having an account:

 Cost savings: The average unbanked consumer spends five percent of his net income 

on financial service fees. For a low-to-moderate- income worker, this amounts to about 

$1,000 in fees annually, or $40,000 over an average working life.19

 Safety: Without a safe physical place to keep their money, unbanked consumers are 

more likely to be victims of crime, because they often carry large sums of cash on their 

person or keep cash in their homes.20 Deposits held in banks and credit unions are 

federally insured.

 Disaster preparedness: In the event of an emergency, unbanked families may have 

no safe way to access their money, and any cash kept in the home may be lost.21

 Asset-building: Without a bank account, consumers lack a convenient way to save, 

establish credit, and access other financial instruments such as loans.

 

18 FDIC, Addendum to the 2009 FDIC National Survey of Unbanked and Underbanked Households 

Use of Alternative Financial Services 30 (2010), available at 

http://www.fdic.gov/householdsurvey/2009/AFS_Addendum.pdf. 

19 Matt Fellowes & Mia Mabanta, Banking on Wealth: America’s New Retail Banking Infrastructure and Its WealthBuilding Potential 13-14 (2008), available at 

http://www.brookings.edu/~/media/research/files/reports/2008/1/banking%20fellowes/01_banking_fellowes.pd

f

20 Gregory Fairchild & Kulwant Rai, Perdido en la Traducción: The Opportunity in Financial Services for Latinos 12, 

28 (2011), available at 

http://www.darden.virginia.edu/web/uploadedFiles/Darden/Tayloe_Murphy_Center/Research/LatinoReport.pdf.

21 See Mollyann Brodie, et al., Experiences of Hurricane Katrina Evacuees in Houston Shelters: Implications for 

Future Planning, 96 Am. J. Pub. Health 1402 , 1405-06 (2006), available at 

http://www.ncbi.nlm.nih.gov/pmc/articles/PMC1522113/pdf/0961402.pdf (discussing a survey of Hurricane 

Katrina Evacuees which revealed that approximately 3 in 10 reported having usable credit cards or a usable bank 

account from which they could withdraw money).
25 CONSUMER FINANCIAL PROTECTION BUREAU

What is the shape of the marketplace that will serve low-income consumers well? Like all 

consumers, low-income and economically vulnerable individuals need access to financial 

products and services that:

 Provide a way to track household income and expenses and to budget accordingly,

 Provide a safe way to build and store savings,

 Have adequate protections from money being lost or stolen,

 Are clear in their terms, without hidden fees,

 Provide a range of choices that are suitable, accessible and convenient,

 Do not produce surprises, tricks or traps, and 

 Make it convenient and safe to pay bills. 

3.1.1 Barriers to accessing the formal banking system

Barriers to the formal banking system are found among financial institutions, among lowincome and economically vulnerable consumers themselves, and within the public-policy 

framework. These barriers contribute to lower participation rates and often to the unbanked 

and underbanked paying a higher cost for financial services. As the FDIC study documented, 

specific communities of color, including African-Americans, Native Americans and Latinos, are 

more frequently unbanked and underbanked than the general population.22 Less widely noted 

is the disproportionate prevalence of people with disabilities among the unbanked and 

underbanked, reflected in part by their more frequent use of alternative financial products than 

the general population.

23

 

22 FDIC, supra note 1, at 14-15.

23 The Pew Charitable Trusts, Payday Lending in America: Who Borrows, Where They Borrow, and Why 11 (2012), 

available at http://www.pewstates.org/uploadedFiles/PCS_Assets/2012/Pew_Payday_Lending_Report.pdf

(revealing that those unable to work because of a disability have used payday loans at higher rates than those who 

are employed, unemployed, homemakers, students, or retired). 
26 CONSUMER FINANCIAL PROTECTION BUREAU

3.1.2 Financial-institution barriers

ACCESS TO BRANCH NETWORKS 

Physical access to financial institutions is a tangible barrier for some low-income and financially 

vulnerable consumers. Convening attendees observed that brick-and-mortar branches are 

costly for financial institutions to maintain, and they expressed a mix of opinions about the 

importance and viability of maintaining neighborhood branches at the same level as in the past. 

Some attendees noted that branches still play an important institutional role in low income and 

rural communities, and that branch access is very important to people who do not have the 

ability or sufficient comfort level to use online and electronic banking solutions. 

Research shows that the distribution of bank branches across the country is uneven, and that in 

recent years the greatest decline in branch presence has been in low-income areas.24 Nationally, 

“banks have shut 1,826 branches (on a net basis) since late 2008, and 93 percent of closings 

were in postal codes where the household income is below the national median.”25

BANK POLICIES AND PRACTICES

Convening attendees reported that the financial requirements to become banked at a depository 

institution present barriers for some consumers, who may be deterred by minimum account 

balances and fees. While financial institutions are required to disclose fees, attendees observed 

that the information is not always presented in a manner that is clear to the consumer. Many 

banks do not open accounts for consumers whose accounts were previously closed by that bank

or another bank for unreimbursed negative balances, which often result from overdraft or nonsufficient funds fees. A negative history with a specialized consumer reporting agency 

(ChexSystems, Early Warning Services, or others) that acts as a data depository for financial 

transaction activities may prevent some consumers from opening an account for an extended 

 

24 David Hayes, Tahir Ali, & Tyler Hall, Banks Follow the Money and Exit Lower Income Areas 2 (2012), available at

http://www.snl.com/InteractiveX/article.aspx.

25Frank Bass & Dakin Campbell, Predator Targets Hit as Banks Shut Branches amid Profits, Bloomberg News (May 

2, 2013, 12:00 PM), http://www.bloomberg.com/news/2013-05-02/post-crash-branch-closings-hit-hardest-inpoor-u-s-areas.html.
27 CONSUMER FINANCIAL PROTECTION BUREAU

period of time, possibly as long as five years.26 Identity requirements present barriers for many 

immigrants. For a number of years, some banks and credit unions have been opening accounts 

for Mexican citizens using a combination of proof of residence, a matricula consular27 and a 

U.S. Individual Tax Identification Number (ITIN).

28 However, not all institutions accept 

alternative identification, which makes it difficult for some people without full documentation to 

open accounts.

29

At the convening, financial service providers that have developed lines of business dedicated to 

the underserved segment of the population described a process that starts with understanding 

the customer’s needs, challenges, capabilities, and desires. Historically, there has often been a 

disconnect: providers have developed new starter products or product bundles aimed at 

reaching underserved consumers, but the products either don’t entirely meet consumer needs,

or are not structured with the right elements, thus requiring extra time and money to execute 

various basic financial transactions. Convening attendees observed that this disconnect often 

forces low-income consumers into the more expensive alternative market, effectively increasing 

their cost of access and reducing disposable income. 

 

26 ChexSystems, Frequently Asked Questions,

https://www.consumerdebit.com/consumerinfo/us/en/chexsystems/faqs.htm#FAQ_03 (last visited Sept. 12, 

2013) (stating that “[e]ach report submitted to ChexSystems remains on our files for five years, unless the source of 

the information requests its removal or ChexSystems becomes obligated to remove it under applicable law”).

27 The official record and identification card for Mexican individuals living abroad. Secretaria de Relaciones 

Exteriores, Matricula Consular (Mexican Consular ID Card) 3-4 available at

http://www.hwcli.com/documents/258.pdf (last visited Sept. 11, 2013). 

28 An Individual Taxpayer Identification Number (ITIN) is a tax processing number issued by the Internal Revenue 

Service. IRS issues ITINs to individuals who are required to have a U.S. taxpayer identification number but who do 

not have, and are not eligible to obtain a Social Security Number (SSN) from the Social Security Administration 

(SSA). See IRS, General ITIN Information, http://www.irs.gov/Individuals/General-ITIN-Information (last visited 

Sept 12, 2013). 

29 See Anna Paulson et al., Financial Access for Immigrants; Lessons from Diverse Perspectives (2006), available at 

http://www.chicagofed.org/digital_assets/others/region/financial_access_for_immigrants/lessons_from_diverse

_perspectives.pdf (explaining that existing laws allow banks to choose whether to accept alternate forms of 

identification).
28 CONSUMER FINANCIAL PROTECTION BUREAU

CONSUMER-RELATED BARRIERS

On the consumer side, there are multiple barriers to banking participation. A lack of trust or 

comfort level with banks is often cited. The FDIC survey found that 7.5 percent of unbanked 

households who do not have an account responded that they do not like dealing with or do not 

trust banks.30 Among these households, 59.4 percent reported that they do not trust banks and 

another 20.4 percent that they do not feel welcome or comfortable at banks.31 Some lowincome consumers feel that the business model of banks focuses more on getting them to 

borrow money than on developing their assets and helping them to save their money.32 Often, 

consumers report that they can’t afford bank accounts because of high fees, or that they feel that 

they don’t have enough money to make it worthwhile to have an account. Low-income 

immigrants may be deterred because they were shunned by banks in their native countries, or, 

in some cases, had suffered losses through bank collapses.33

Long-established social and cultural patterns play a part, as well. At a listening session attended 

by community representatives from East St. Louis, Illinois, a city where 98 percent of the 

population is African-American34 and almost 55 percent are unbanked or underbanked,35 we 

learned that some residents do not use banks because their parents, grandparents, and peers did 

not use them; in turn, they either did not see the need or were unable to change that pattern. 

We also learned that many residents go outside of the traditional financial system for their 

banking needs. For some, participants in that session said, “the corner grocery store” is their 

bank. While this approach may maximize convenience, it can frequently be a more expensive 

 

30 FDIC, supra note 1, at 28.

31 Id.

32 Federal Reserve Bank of Kansas City, Unbanked and Underbanked Consumers in the 10th Federal Reserve District

6 (2010), available at http://www.kansascityfed.org/publicat/research/community/Unbanked.Report.pdf. 

33 Paulson et al., supra note 28, at 18-19.

34 US Census Bureau, State & County QuickFacts: East St. Louis, Illinois, 

http://quickfacts.census.gov/qfd/states/17/1722255.html (last visited Sept. 11, 2013).

35 BankOn USA, Unbanked Profile: East St. Louis, IL, 

http://webtools.joinbankon.org/community/profile?state=IL&place=East%20St.%20Louis (last visited Sept 11, 2013). 
29 CONSUMER FINANCIAL PROTECTION BUREAU

solution than becoming a customer of a bank or credit union because these nonbanks typically 

sell financial services “a la carte,” whereas a financial institution may offer basic services as a 

bundle associated with an account product. The nonbank options may also be less safe and 

secure if they lack certain protections of the mainstream banking system, such as regulatory 

oversight, protection against theft and error, and federal deposit insurance.

PUBLIC-POLICY DETERRENTS

Recipients of Medicaid, Temporary Assistance for Needy Families (TANF), and other publicbenefit programs face asset limits, which may deter them from opening accounts at financial

institutions and build savings.

36 We heard from social service providers that individuals with 

disabilities who receive Supplemental Security Income (SSI) are afraid to save because if they 

exceed the threshold for liquid assets, their SSI benefits could be affected; this would include 

both the cash benefit and much-needed medical benefits (Medicaid). 

3.1.3 How can financial providers expand service to 

underserved markets? 

DEFINE THE RIGHT TIME HORIZON

Many of the financial services providers we heard from – whether commercial banks, thrifts or 

credit unions – talked about the challenge of reconciling the product needs of low-income 

consumers with the bottom-line needs of their institutions. Director Cordray noted that a focus 

on maximizing short-term profitability is not always the answer: “[a] lot of the problem is not 

having a long enough term horizon ... If you treat your customers in a way that's not sustainable 

[for the consumer], over time that is not a good business model and [your product] will not 

survive.”

37 Participants at the convening, including financial-service providers, acknowledged 

the value of lengthening the business model’s horizon for products tailored to the underserved, 

since profitability may take longer to achieve. 

 

36 Rochelle Finzel, Asset Limits in Public Programs, 20 Legisbrief 1 (2012).

37 Cordray, supra note 15. 
30 CONSUMER FINANCIAL PROTECTION BUREAU

PRODUCT CHARACTERISTICS: STICKY, SUSTAINABLE, AND SCALABLE 

Financial institutions face a challenge whenever a potential product falls outside their typical 

business model. When creating new products, institution representatives said that they need to 

reasonably expect that their products and services will be sufficiently appealing for customers to 

establish and maintain a longer-term, sustainable customer relationship that will produce 

profits over time. 

What Sticks? 

Product “stickiness” is defined by its attractiveness, take-up, and retention rate. Service 

providers who participated in the convening reported that consumers, especially those who are 

first-time customers, are less likely to continue with a product if they perceive that maintenance 

fees are too high or that the financial institution is engaging in deceptive practices. To succeed, a 

product should be aimed at building consumer financial capability and confidence as well as 

loyalty to the product and brand. 

For example, in the case of prepaid cards, recent studies by researchers from the Federal 

Reserve Bank of Philadelphia and the Center for Financial Services Innovation found that the 

average active life of general-purpose reloadable cards is often less than six months.38 In some 

cases, such as cards issued by retailers, the lifespan is much shorter, averaging just two

months.39 This is important to card providers because the fixed costs associated with 

establishing a reloadable prepaid card used by a consumer must be recovered over a time span 

that is only 5 percent to 15 percent the length of a typical checking account.40

For prepaid cards used by employers to deliver payroll, for example, 16 percent of consumers 

take 80 percent or more of the value off the card via cash withdrawal. Cards used in this way are 

 

38 Stephanie M. Wilshusen Robert M. Hunt & James van Opstal, Consumer Use of Prepaid Cards; A TransactionBased Analysis 18 (2012), http://www.philadelphiafed.org/consumer-credit-and-payments/payment-cardscenter/publications/discussion-papers/2012/D-2012-August-Prepaid.pdf.

39 Id.

40 Id.
31 CONSUMER FINANCIAL PROTECTION BUREAU

essentially a plastic substitute for cashing a paycheck.41 This means that financial institutions 

have less opportunity to take advantage of income from interchange fees, and that consumers 

are less likely to take advantage of the transaction convenience of the card. In order to make 

these cards financially viable, it is not unreasonable to conclude that the institutions that 

provide them have an incentive to add convenience features that could lead to greater customer 

engagement and retention. 

Meeting Consumers Where They Are

Providers of financial services aimed at low-income and underserved consumers increasingly 

recognize the need to reach them at the appropriate place, the appropriate time, and with the 

appropriate product. They leverage existing non-bank resources, including partnerships with 

public and private institutions, to provide products and services where consumers are, where 

they go, and through channels they trust. The exact approach individual financial institutions 

take to increase their share of this market varies by type of institution, business model, target 

consumer, and the geographic scope of their markets (national, regional, or local). But the 

common thread is greater partnership and community engagement. 

The “Right” Place

One strategy is to bring the financial institution to the places where consumers routinely 

conduct other business. Three examples we heard from listening sessions illustrate the point. 

 On a small scale, one credit union in the Midwest has strategically deployed “full-service” 

kiosks in grocery stores that serve low-income consumers. These kiosks offer checkcashing, bill payment, money orders, reloadable prepaid cards, and other services not 

only to the credit union’s members but also to underserved or unbanked consumers who 

are not members. An additional advantage to using the kiosks is that they can be picked 

up relatively easily and moved to other locations if needed. 

 Another credit union in the Midwest has co-located a branch in a nonprofit multi-service 

agency. There, it can reach consumers who are receiving services such as job training. 

Among its products is a payday consolidation loan, which is specifically designed to meet 

the needs of the nonprofit agency’s clients. By consolidating multiple debts into a single 

 

41 Id. at 22. 
32 CONSUMER FINANCIAL PROTECTION BUREAU

loan and extending the term, consumers can get lower total monthly payments and are 

better positioned to fully repay their debts. 

 On a national scale, prepaid card providers are distributing their products through large 

retail chains with thousands of locations that serve low- and moderate-income 

consumers.

The “Right” Time 

For a segment of the unbanked and underbanked population, merely providing products in the 

right place is not sufficient. Timeliness is also important. At our listening sessions in New York 

City, we met with representatives of a wide range of social service, legal services, housing, and 

other agencies that co-locate or link financial counseling and coaching to the delivery of other 

services. Embedding or nesting empowerment services into the existing social service delivery 

system is emerging as a key strategy around the country, practiced both by local governments 

and nonprofit institutions. Communities such as New York City that have already begun to 

employ this strategy are looking both to expand and replicate their financial empowerment 

efforts more quickly, and to achieve improved outcomes in existing programs by bundling 

services.42

The “Right” Partners 

Financial institutions also have found partnering with nonfinancial entities to be effective in 

reaching low-income consumers. Participants at the convening stressed the value of marketing 

and outreach through partnerships with trusted entities. Media that caters to specific ethnic 

populations, membership organizations, and schools are channels that can help financial 

institutions reach scale with their products. Municipal entities are often crucial partners; as 

described at the convening, the Kindergarten to College initiative in San Francisco would not 

 

42 New York City Dep’t of Consumer Affairs Office of Fin. Empowerment, Municipal Financial Empowerment: A 

Supervitamin for Public Programs (2012), available at 

http://www.nyc.gov/html/dca/downloads/pdf/SupervitaminReportSeries.pdf.
33 CONSUMER FINANCIAL PROTECTION BUREAU

have been possible without an effective collaboration between the city, a major bank, and the 

local public school system.43

Participants cited as an important lesson that in most cases of partnership between a financial 

institution and a public or community organization, it is important that goals, incentives, 

timeframes, and expectations of profitability and sustainability be thoughtfully aligned.

INCENTIVES AND RESOURCES FOR FINANCIAL INSTITUTIONS TO EXPAND ACCESS

Through the enactment of certain public policies over the past four decades, the federal 

government has created regulatory and financial incentives for financial institutions to expand 

their services to meet the needs of low-income consumers. For example, banks and thrifts may 

receive credit under the Community Reinvestment Act for expanding their services to low- and 

moderate-income consumers, either directly or through community organizations.44 The 

Community Development Financial Institutions (CDFI) Fund has several programs: The Bank 

Enterprise Award (BEA) program provides cash awards to banks that can demonstrate 

increased investment and services to low-income communities, while the Fund’s “core” program 

makes competitive grants available both to banks and credit unions that it has certified as

predominantly serving low-income communities.45 There are over 900 CDFIs in the U.S., of 

which about 300 are banks and credit unions.46

 

43 City of San Francisco Office of Fin. Empowerment, Kindergarten to College, http://sfofe.org/programs/k-to-c (last 

visited Sept. 11, 2013). 

44 See Fed. Reserve, Community Reinvestment Act, http://www.federalreserve.gov/communitydev/cra_about.htm

(last visited June 20, 2013) (“The Community Reinvestment Act is intended to encourage depository institutions to 

help meet the credit needs of the communities in which they operate, including low- and moderate-income 

neighborhoods, consistent with safe and sound operations.”).

45 See, CDFI Fund, What We Do, http://www.cdfifund.gov/what_we_do/overview.asp (last visited Sept. 11, 2013); 

see also CDFI Fund, Fact Sheet: Bank Enterprise Award Program (2013) available at 

http://www.cdfifund.gov/docs/factsheets/CDFI_BEA.pdf (“Through monetary awards and the allocation of tax 

credits, the CDFI Fund helps promote access to capital and local economic growth in urban and rural low-income 

communities across the nation.”).

46 Michael Swack, Jack Northrup, & Eric Hangen, CDFI Industry Analysis Summary Report 1 (2012), available at

http://carseyinstitute.unh.edu/sites/carseyinstitute.unh.edu/files/publications/Report-Swack-CDFI-Industry-
34 CONSUMER FINANCIAL PROTECTION BUREAU

Within the credit union industry, the National Credit Union Administration (NCUA) has a 

special “low-income designation” for institutions that serve a majority of members who meet its 

regulatory definition.47 A recent change in regulations increased the number of credit unions 

with this designation from about 1,000 to over 1,900.48 The low income designation means a 

credit union is eligible for the Community Development Revolving Loan Fund’s grants and lowinterest loans; can obtain supplemental capital; is exempt from the 12.25 percent statutory cap 

on member business loans; and can accept non-member deposits from any source.49

PREPAID CARDS AND MOBILE TECHNOLOGY 

Prepaid Cards and Branch Banking

Because physical branch networks are limited and costly to build and maintain, financial 

institutions may have an incentive to employ emerging technologies to expand service to lowincome, unbanked, and underbanked consumers. The profusion of new products and delivery 

channels offers the potential to expand services in a relatively cost-effective way. 

Some financial institutions have developed their own suite of products targeted to unbanked or 

underserved consumers, including prepaid cards. The products are available to all customers 

but are used specifically by some banks to serve potential customers who do not qualify for their 

“standard” products, particularly checking accounts. 50 This strategy has been employed by

some financial institutions that offer “second-chance” accounts to consumers whose accounts 

 

Analysis.pdf. Other CDFIs include microenterprise funds, non-profit lenders and community development venture 

funds.

47 A credit union qualifies for low income designation when a majority of its membership has family income of 80

percent or less than the median family income for the metropolitan area where they live or national metropolitan 

area, whichever is greater. Nat’l Credit Union Admin. Office of Small Credit Union Initiatives, Low-Income 

Designation Fact Sheet 1 (2013), http://www.ncua.gov/Legal/Documents/LowIncomeDesignationFactSheet.pdf.

48 Nat’l Credit Union Admin., NCUA’s Low-Income Credit Union Initiative Boosts Growth, Community Investment, 

http://www.ncua.gov/News/Pages/NW20130807LowIncome.aspx (last visited Sept. 11, 2013).

49 Nat’l Credit Union Admin., Low-Income Credit Union List Hits 1,874, 

http://www.ncua.gov/News/Pages/NW20121018LICU.aspx (last visited Sept 11, 2013). 

50 US Dep’t of the Treasury, Banking on Opportunity: A Scan of the Evolving Field of Bank On Initiatives 12 (2011), 

available at http://www.treasury.gov/resource-center/financialeducation/documents/banking%20on%20opportunity%20nov%2011.pdf. 
35 CONSUMER FINANCIAL PROTECTION BUREAU

were previously closed because of unreimbursed negative balances owed to the bank, often 

resulting from overdraft and non-sufficient funds fees.

51 Others are exploring whether prepaid 

cards provide an on-ramp for customers to transition to other bank products in the future. 

However, convening attendees observed that whether prepaid cards are “sticky” enough to lead 

to a deeper banking relationship is still an open question. 

In any case, some convening participants stated that offering the cards may not eliminate the 

need for contact with a branch. Several representatives of financial-service providers discussed 

the importance of their customers having access to a human being, particularly when they are 

first introduced to a new product, or when they have a question or a problem. This is not only 

important for building loyalty; it also may offer an avenue to provide financial education. 

Expansion of the Prepaid Card Industry

Prepaid card usage is growing at an explosive rate, and it extends far beyond “traditional” bank 

offerings. These cards are provided by a variety of vendors, and they are distributed in large 

numbers of retail stores. The category includes both “closed-loop” cards, such as many gift 

cards that can only be used for a particular vendor or system, and general-purpose reloadable 

(GPR) cards, which are “open-loop” and can be used widely.52 According to the Mercator 

Advisory Group forecasts, “open-loop market loads in the United States will have a compound

annual growth rate (CAGR) of 21% through 2015, reaching a total of $388.7 billion.”53

 

51 CFPB, CFPB Study of Overdraft Programs 27 n.cc (2013), available at

http://files.consumerfinance.gov/f/201306_cfpb_whitepaper_overdraft-practices.pdf. 

52 An open-loop prepaid card is a card with a network logo on it (Visa, MasterCard, American Express, or Discover) 

that can be used at any location that accepts that brand. A closed-loop prepaid card generally does not have a 

network logo on it. Consumers can only use these cards at certain locations – for example, at a specific store or 

group of stores for a gift card, or a public transportation system for a transit card. CFPB, What Are Some of the 

Main Types of Prepaid Cards? (last modified May 18, 2012), http://www.consumerfinance.gov/askcfpb/. 

53 Mercator, Advisory Group. U.S. Prepaid Cards Market Forecasts, 2012-2015. 8 (2012)
36 CONSUMER FINANCIAL PROTECTION BUREAU

Prepaid cards vary widely in their features and terms, including initial purchase fees, reload 

charges, balance inquiry charges, safety of balances, and more.54 In our listening sessions, we 

learned that marketing of celebrity-endorsed prepaid cards is widespread within certain 

segments of the low-income population, such as young adults, and that some of these cards are 

often more expensive than the typical offerings. The Bureau’s advance notice of proposed 

rulemaking (ANPR) on prepaid cards and electronic funds transfers sought comment on a 

variety of consumer protection issues connected with prepaid cards, including the cards’ costs, 

benefits and risks to consumers. 55 For example, the Bureau sought public comment on the 

extent to which the regulation that applies to electronic funds transfers should apply to GPR 

prepaid cards as well as whether there is a need for greater transparency through disclosure. 

Mobile banking

Mobile banking is attracting great interest both in the U.S. and internationally. According to the 

Federal Reserve Board’s “Consumers and Mobile Financial Services 2013” survey, 87 percent of 

all consumers have mobile phones—52 percent of which are smart phones—and approximately 28

percent of mobile phone owners have used mobile banking in the past 12 months.

56 Online bill pay 

is widely available with or without the use of mobile technology. But for a growing number of 

consumers who bank at institutions offering mobile conveniences such as remote-deposit 

capture, there is even less need to go to a physical branch. To financial institutions, offering 

mobile options is a potential way to extend their services without expanding their branch 

networks. 

This trend is particularly intriguing with respect to the low-income and unbanked and 

underbanked markets. The Federal Reserve Bank survey found that an estimated 59 percent of 

 

54 The Pew Charitable Trusts, Loaded with Uncertainty. Are Prepaid Cards a Smart Alternative to Checking 

Accounts? 2-4 (2012), available at

http://www.pewstates.org/uploadedFiles/PCS_Assets/2012/Prepaid_Checking_report.pdf.

55 Electronic Funds Transfer (Regulation E), 77 Fed. Reg. 30,923, 30,923-30,925 (May 24, 2012). 

(Codified at 12 CFR 1005), available at https://federalregister.gov/a/2012-12565.

56 Bd. of Governors of the Fed. Reserve Sys., Consumers and Mobile Financial Services 2013, at 1 (2013), available 

at http://www.federalreserve.gov/econresdata/consumers-and-mobile-financial-services-report-201303.pdf. 
37 CONSUMER FINANCIAL PROTECTION BUREAU

consumers who are unbanked have access to a mobile phone, half of which are smart phones. 57

In addition, the survey found that among underbanked consumers, 90 percent have a mobile 

phone, 56 percent of which are smart phones.58 As one convening participant put it, 

underserved consumers are “over-indexed on mobile and under-indexed on time and 

convenience.” This penetration pattern appears to offer the potential to expand access to more 

underserved populations.

59 

3.1.4 Innovation and the Consumer Financial Protection 

Bureau

The pace of change in financial services and products is rapid and accelerating. There is a natural 

tension between allowing the market to innovate and initiate change, and providing sufficient 

regulatory oversight to make sure consumer interests are protected. As Director Cordray 

remarked, “the danger and the concern we have is, ‘Can we keep up effectively with the pace of 

change from a regulatory standpoint’? Can we harness that change in a way that is going to be 

positive for consumers?” 60

One approach that the CFPB has adopted is to foster and facilitate innovation through its Project 

Catalyst. Director Cordray went on to say, “The regulatory regime itself can shape and guide 

change.” However, innovation in financial services and products is not always beneficial to 

consumers. “We've seen plenty of innovation in the financial realm that was harmful to 

consumers,” he commented. “We've seen a variety of new products, new ways of delivering 

products, new ways of delivering money to people that are predatory, that are exploitative, that 

 

57 Id. at 2. 

58 Id.

59 Id. at 4. 

60 Cordray, supra note 15.
38 CONSUMER FINANCIAL PROTECTION BUREAU

leave consumers worse off than when they found them.”61 Accordingly, the CFPB is working to 

encourage innovation that benefits rather than harms consumers.62

3.1.5 Technology with a human face: Combining low-touch 

and high-touch

The financial services industry has embraced technology as a means to expand its reach and 

better serve its customers. Some technological solutions may provide the ways and means to 

scale up service to underserved consumers cost-effectively. While some low-income and other 

economically vulnerable consumers are well positioned to take advantage of technological 

options, for others overcoming the barriers to full participation in the “mainstream” financial 

system may continue to require access to a physical location, and even more importantly, to a 

human being. 

The choices in the financial system can be as confusing as they are vast. Disclosures may be

difficult to understand for those with limited English-language proficiency. An absent, flawed or 

erroneous credit history may be hard to remedy or overcome. For some, the lack of broadband 

connectivity may be a frustrating barrier. For these and many other reasons, the assistance of a 

trusted and knowledgeable intermediary can make all the difference in improving a consumer’s 

financial life. Access to a financial counselor, a coach, or simply a well-informed caseworker can 

fill this gap. For financial institutions interested in expanding their services to the underserved, 

these intermediaries can be valuable allies. Developing these resources has been an early 

priority of the Office of Financial Empowerment, as reflected in the projects described in the last 

chapter of this report. 

 

61 Id. 

62 CFPB, Project Catalyst, http://www.consumerfinance.gov/ProjectCatalyst/ (last visited Sept. 11, 2013).The 

mission of Project Catalyst is to support innovators in creating consumer-friendly financial products and services.
39 CONSUMER FINANCIAL PROTECTION BUREAU

3.2 Access to credit

3.2.1 Weathering emergencies with scant assets

For consumers with limited savings in reserve, access to affordable credit is crucial to alleviating

economic vulnerability and achieving financial stability. Many consumers face unanticipated 

expenses that exceed their typical weekly budget. This is doubly challenging for the 25 percent 

of the adult population who work full-time but are not earning enough money to meet their 

family’s basic economic needs.63 These extra expenses can become small emergencies (for 

example, a car breakdown or loss of a day’s pay) for those who have less of a cushion with which 

to weather financial setbacks. 

Savings can buffer economic shocks and alleviate the need for credit, but recent studies indicate 

that almost half of all Americans have insufficient emergency savings. The 2012 CFED Assets & 

Opportunity Scorecard reported that 43.9 percent of all households, including 62.6 percent of 

households of color, are “liquid-asset poor,” meaning they lack the savings to cover basic 

expenses for three months if unemployment, a medical emergency or other crisis leads to a loss 

of stable income.

64

People receiving public benefits may also pay a penalty for saving, because of limits on the 

amount of assets they may hold and remain eligible. Asset limits on public-benefit eligibility are 

designed to ensure that only people who truly need the benefits receive them. However, these 

limits have created unintended negative consequences for those receiving benefits: they create a 

barrier to financial security and upward economic mobility.65 One convening participant noted 

that individuals with disabilities are often “forced to remain at the bottom of the economic 

ladder, just to ensure that life-saving medical benefits are not cut off.” 

 

63 Wider Opportunities for Women, Living below the Line: Economic Insecurity and America’s Families 1 (2011), 

available at http://www.wowonline.org/documents/WOWUSBESTLivingBelowtheLine2011.pdf. 

64 CFED, Liquid Asset Poverty Rate, http://scorecard.assetsandopportunity.org/2013/measure/liquid-asset-povertyrate (last visited Sept. 12, 2013); CFED, Liquid Asset Poverty by Race, 

http://scorecard.assetsandopportunity.org/2013/measure/liquid-asset-poverty-by-race (last visited Sept. 12, 2013). 

65 Finzel, supra note 35, at 1. 
40 CONSUMER FINANCIAL PROTECTION BUREAU

For these as well as other consumers, access to credit – especially small-dollar loans – is vital, 

because they have little money in reserve to cover an unexpected expense. There is some 

indication that over the past three years, more low-income consumers have been using credit 

cards to pay for basic living expenses such as rent or mortgage, food and utilities.66 Research 

shows that people incurring significant credit card debt experience high levels of financial stress 

and decreased financial stability.67 However, credit cards may be the most affordable option for 

these consumers because other forms of credit are less available. To access relatively affordable 

sources of credit, consumers generally need credit scores that will allow them to qualify for 

conventional consumer loans with longer terms and more favorable interest rates. 

3.2.2 Credit scores and credit reports: Gateways to access 

FICO, or the Fair Isaac Corporation, is a company that provides credit-scoring models to help 

financial services companies assess consumers’ creditworthiness. Despite the importance of 

credit scores, FICO estimates that 25 percent of adult consumers (about 56 million individuals), 

have “thin” or no credit files. Vantage Solutions is a competitor to FICO established by the three 

consumer reporting agencies (CRAs), Experian, Equifax and TransUnion. Vantage reports that 

its most recent models substantially increase the number of scorable consumers, adding 30 to 

35 million scorable records. It is uncertain the extent to which the Vantage model will gain 

traction in the market. 

Whether lenders use FICO or Vantage models, there are millions of consumers who do not 

qualify for mainstream credit because they have low scores or because their creditworthiness 

cannot be assessed under the existing scoring models. As a result they may be pushed toward 

using high-cost credit products that will consume more of their disposable income, or toward

choosing not to pay certain bills, thus further hurting their financial standing. 

 

66 Amy Traub & Catherine Ruetschlin, The Plastic Safety Net: Findings from 2012 Survey on Credit Card Debt of 

Low and Middle Income Households 1 (2012), available at 

http://www.demos.org/sites/default/files/publications/PlasticSafetyNet-Demos.pdf. 

67 See generally, Lucia F. Dunn & Ida A. Mirzaie, Determinants of Consumer Debt Stress: Differences by Debt Type 

and Gender, (2012) available at http://www.chrr.osu.edu/content/surveys/cfm/doc/DSI-Working-Paper-07-19-

12.pdf
41 CONSUMER FINANCIAL PROTECTION BUREAU

3.2.3 Consumers suffer by not understanding credit

reporting

Despite the significance of one’s credit record for overall financial capability and well-being, 

many consumers do not understand the importance of their credit records, are not aware of 

their credit histories or scores, or do not take action to manage their credit history. In part, this 

is driven by a credit reporting system that is unfamiliar to most consumers. A recent CFPB 

study on CRAs reported that only about 20 percent of consumers obtain their credit reports each 

year, and that a majority of those pay a fee to get their report even though all consumers have a 

right to a free annual credit report.

68 Moreover, as several convening attendees pointed out,

many consumers continue to be confused by credit report-related information. For example,

they may not understand the difference between a credit report and a credit score or how a score 

is calculated; the difference between the “educational” scores consumers receive from the CRAs 

and the scores that lenders use in making credit decisions; the implications of negative history 

for a file; or how to build and manage credit in general.69 Consumers may also be unaware of 

the other implications of a compromised credit history. For example, many employers and 

landlords use credit reports to screen applicants.70

Other research confirms the need for more education about credit reports and scores, especially 

among low-income consumers. In 2009, researchers looked at how low- and moderate-income

consumers perceive their credit scores and how those perceptions shape financial outcomes. An 

intake survey asked nearly 1,800 participants what they thought their credit score was, and their 

 

68 See CFPB, Key Dimensions and Processes in the U.S. Credit Reporting System: A Review of How the Nation’s 

Largest Credit Bureaus Manage Consumer Data 27 (2012), available at

http://files.consumerfinance.gov/f/201212_cfpb_credit-reporting-white-paper.pdf.

69 See CFPB, Analysis of Differences Between Consumer – and Creditor – Purchased Credit Scores 8, 20 (2012), 

available at http://files.consumerfinance.gov/f/201209_Analysis_Differences_Consumer_Credit.pdf (explaining how CRAs 

offer educational credit scores to consumers that may be different than the scores used by lenders). 

70 CFPB, supra note 67, at 5 (citing a Society for Human Resources Management survey which found that “almost 

60% of its member employers used credit reports to screen applicants for at least some of their positions”).
42 CONSUMER FINANCIAL PROTECTION BUREAU

answers were compared with FICO credit scores calculated for those individuals.

71 The results of 

their survey reinforced the pressing need to build awareness and understanding of credit scores. 

Specifically: 

 35 percent of participants didn't actually know what a credit score was. 

 Of those with FICO scores, only 76 percent attempted to estimate a score.

 73 percent of participants underestimated their own credit scores. On average their 

estimates differed from their calculated credit score by 111 points. 72

Having erroneous information or no knowledge about credit scores can prove costly. 

Controlling for income and credit scores, those participants who underestimated their scores 

were less likely to comparison-shop for financial products and services and much more likely to 

pay higher interest rates than those who better understood their credit scores.

73 These findings 

were generally consistent with what we learned through our listening sessions around the 

country. Financial empowerment counselors told us that many of their clients were afraid to 

check their scores and assumed that they were worse than they actually proved to be.

LIMITED PAYMENT HISTORY AND INACCURACIES HURT VULNERABLE CONSUMERS 

The credit reports of many underserved consumers may suffer because not enough positive 

payment history is reported for them. Generally, lenders for mortgages, credit cards, student 

loans, auto and other consumer loans report payment history, both positive and negative, to

consumer reporting agencies each month.74 Reported on-time payments for these loans 

normally contribute to a positive payment history and can influence credit scores. Fewer lowincome consumers have mortgages and credit cards, for which payments are regularly reported. 

 

71 Benjamin Levinger, Marques Benton & Stephan Meier, The Cost of Not Knowing the Score: Self-Estimated Credit 

Scores and Financial Outcomes 3 (2011).

72 Id.

73 See id. at 4 (The survey results “present a mechanism that may explain why some consumers agree to suboptimal 

credit terms: an underestimation of their credit standing may lead to the acceptance of terms which are more in line 

with their incorrect self-assessment than with their actual creditworthiness.”). 

74 Federal Reserve Bank of Philadelphia, Understanding & Improving Your Credit Score 2 (2012), available at 

https://www.philadelphiafed.org/consumer-resources/publications/your-credit-score.pdf. 
43 CONSUMER FINANCIAL PROTECTION BUREAU

While low-income consumers frequently pay rent and phone bills, this type of payment history 

is less likely to be reported. The consequence may be that underserved consumers who do make 

regular monthly payments have fewer opportunities to build positive histories. 

Errors contained in credit reports can hurt consumers. A 2013 Federal Trade Commission 

(FTC) report on a decade-long study of credit-report accuracy found that 21 percent of 

consumers had a confirmed material error on at least one of their three credit reports.75

Approximately 5 percent of the consumers in the study had an error that, when corrected, 

placed them in a different credit-risk tier, which could mean paying a lower interest rate on their 

loans for automobiles, homes or credit cards.76

3.2.4 Improving accuracy and transparency 

Practitioners at the convening argued that credit reports should be made more 

transparent. Unless consumers are familiar with the specifics of a report, it may be more 

difficult for them to understand the nature of an error and how to fix it.

One suggestion from convening participants was to attach a “probability of accuracy” (or of an 

error) to each biller in a consumer’s report that reflects the frequency with which that biller’s 

tradelines have been disputed and corrected. This would be a tip-off to consumers to look 

closely at whether that tradeline is accurate on their reports and to lenders to possibly discount 

such tradelines in their credit assessments. 77 Participants suggested it would be helpful for the 

CRAs to maintain and refer to a list of creditors whose information is disputed particularly 

often. This could also foster more accurate reporting on the creditor side. Finally, one solution 

that lies with consumers is for them to regularly check their reports and dispute errors they 

discover. In doing so, they are more likely to avoid damage to their reports.

 

75 Fed. Trade Comm’n, Report to Congress Under Section 319 of the Fair and Accurate Credit Transactions Act of 

2003, at i (2012), available at http://www.ftc.gov/os/2013/02/130211factareport.pdf. A material error is defined 

as an “inaccuracy in information that is commonly used to generate a credit score”.

76 Id.

77 Tradelines are credit accounts which are reported to the credit reporting agencies. Each tradeline on a credit report 

contains detailed information about the account. Experian, Credit Advice, http://www.experian.com/askexperian/20080806-tradelines-and-your-credit-report.html (last visited Sept. 12, 2013). 
44 CONSUMER FINANCIAL PROTECTION BUREAU

3.2.5 Improving credit profiles 

ALTERNATIVE CREDIT REPORTING DATA

One possible way to help consumers build or strengthen their credit profiles -- or at least put

consumers with thin or no credit files “on the map” -- is for CRAs to incorporate additional,

alternative data such as regular telecom and rental payments. Some proposed solutions call for 

partnerships -- for example, between telecom companies and CRAs for “full-file reporting” or 

between financial counselors and financial institutions that provide a credit-building product. 

Convening participants suggested that one possible model to help consumers is similar to a pilot 

offered by Credit Builders Alliance and Experian Rent Bureau; they are working with affordablehousing organizations to report rental payments in order to build positive payment histories for 

the tenants. 

OBSTACLES TO CONSUMERS OBTAINING CREDIT REPORT INFORMATION

Some convening practitioners argued that the policies and contractual limitations of CRAs 

hinder counselors as well as the many companies trying to develop innovative web-based money 

management and educational tools. Participants observed that nonprofits providing financial 

counseling may be prohibited from sharing with their clients certain proprietary credit scores 

developed by third parties. For example, CRAs restrict FICO credit scores from being provided 

to some third parties, which has impacted credit counselors and credit builders. Contracts with 

CRAs may also prevent nonprofit financial counselors from providing the consumer with an 

actual copy of the credit report, although they are allowed to share the information contained in 

the report. Companies seeking to develop alternative scores often have a hard time acquiring 

sufficient data to build new models. 

It was clear from the discussions at the convening that there is not a uniform understanding 

regarding what information can be shared between CRAs and counselors and how that 

information can be used to assist consumers in building their credit. The CFPB may be able to 

play a constructive role in helping to bridge this information gap and provide greater 

transparency to the field. 
45 CONSUMER FINANCIAL PROTECTION BUREAU

3.2.6 Building the capacity of consumers: action and 

education

Improving access to credit does not rely solely on industry changes. Practitioners recommended 

things consumers should know and actions they should take to build or ensure an accurate 

credit file and a good score. 

CONSUMERS AND CREDIT REPORTS

Participants offered a check-list of dos and don’ts for dealing with credit reports.78 

 An important first step for consumers is to request free copies of their credit reports 

from each of the three largest CRAs each year online through annualcreditreport.com or 

via mail or phone. 

 If something in the credit report appears wrong, the consumer should dispute the error 

by writing to both the CRA and the furnisher of the information, including copies of 

supporting documents whenever possible. 

 If consumers do find negative or inaccurate information in their reports and decide to 

get help, they should avoid organizations or companies that promise to “repair” or “fix” 

their credit for an upfront fee. Consumers should also be informed that consumer 

reporting agencies do not remove accurately reported negative information such as late 

payments except with the passage of time.79

MANAGING CREDIT

Participants offered various suggestions for consumers to better manage their credit and in turn 

improve their credit scores. 

 Pay all bills on time. 

 

78 For CFPB guidance on accessing credit reports, see CFPB, Check Your Credit Report at Least Once a Year,

http://files.consumerfinance.gov/f/201207_cfpb_consumer-advisory_check-your-credit-score-every-year.pdf (last 

visited Sept. 12, 2013).

79 Consumers that have a specific issue with inaccurate information on their credit report can file a complaint with 

the CFPB by phone at (855) 411-CFPB (2372) or on the CFPB website at 

http://www.consumerfinance.gov/complaint/
46 CONSUMER FINANCIAL PROTECTION BUREAU

 If possible, identify products that are designed to build credit without substantially 

increasing debt, such as credit-builder or cash-secured loan products. Find ways to build 

a credit profile through credit products or other services that report positive as well as 

negative payments. For example, a handful of utility, telecommunications, and rental 

companies will report on-time payments. 

 Avoid maintaining high revolving balances as a percentage of revolving credit limits. 

 Avoid applying for multiple types of new credit in a short time, especially if one is 

preparing to get a mortgage or a car loan.80

THE ROLE OF FINANCIAL EDUCATORS AND COUNSELORS

Convening participants highlighted the need for financial educators to know their audience and 

respond with appropriate methods, which could include: 

 Identifying and utilizing teachable moments,

 Offering “rules of thumb” common-sense guidelines to help people manage their 

finances to reduce negative incidents reported to CRAs, 

 Supporting opportunities that use peer encouragement and positive pressure to motivate 

and hold one accountable to one’s goals, especially as relates to activities that lead to 

building credit, and

 Pairing education with a financial product such as a credit-builder loan. 

Educating consumers on how to build credit has attracted increasing attention from non-profits, 

financial institutions, government and funders. Academics have increasingly focused on the 

importance of building credit to financial capability; they have increased their research on 

practitioners who incorporate more tools and methods to help consumers establish a credit 

history and improve their credit score. Within the CFPB, the Office of Financial Education is

engaged in efforts ranging from developing and disseminating educational materials to 

exploring emerging research approaches to this specific aspect of financial education. 

 

80 According to CreditKarma, “Consumers should be informed that comparison shopping for a certain product, like a 

car loan or mortgage, which may cause multiple creditors to draw their credit record, will generally not negatively 

impact their credit profile.”CreditKarma, Hard Inquiries and Soft Inquiries, 

https://www.creditkarma.com/article/hard_inquiries_and_soft_inquiries (last visited Sept. 12, 2013).
47 CONSUMER FINANCIAL PROTECTION BUREAU

CREDIT-BUILDING PRODUCTS AND PROGRAMS

Participants cited a number of approaches and possible pathways to building credit. These 

include:

 Secured credit cards and joint credit-card applications,

 “Bundled products” such as a small loan or a secured credit card, coupled with a savings 

component, 

 A credit-building product combined with a service such as financial coaching or 

counseling, 

 “Starter” credit-builder loans that report payments,

 Payday consolidation loans,

 The Experian Rent Bureau pilot, in which affordable-housing organizations will report 

rent payment history to Experian, and

 Lending circles and peer lending.

The Office of Financial Empowerment has begun research to better understand a number of 

these products and approaches. Our project, Building Financial Capability through Product 

Design and Program Delivery (FinCap), is described in greater detail later in this paper. 
48 CONSUMER FINANCIAL PROTECTION BUREAU

4. Financial outcome metrics

4.1 The challenge: Defining, measuring, 

and increasing financial success

The CFPB is a data-driven agency. Data shapes our regulatory, supervisory, enforcement, and 

policy work; it also guides us in developing educational and informational resources for 

consumers. 

From our convening and our listening sessions, we heard consistently that achieving financial 

empowerment at scale will depend on entities that provide financial empowerment services

collecting, analyzing, and effectively incorporating outcome data into the development of service

interventions, policies, and products. It is not enough to identify approaches that work; it is 

essential to understand how they work, and in what context, if we as a society are to develop and 

expand efforts to assist low-income and economically vulnerable consumers. By engaging with 

stakeholders, we have sought to ascertain the current state of outcome and impact information

collection, and to understand the most productive role of the Bureau in advancing financial 

empowerment.

4.1.1 Uniform standards and success indicators have been 

elusive 

We have heard repeatedly about the importance of outcome metrics and the need to improve the 

standards for what information is collected by service providers to evaluate programs, and the 

need to standardize the method of collection. But perspectives and interests around collecting

and using data vary among policymakers, public and private funders, the agencies and programs 

that depend on their support, financial institutions, and consumers. Various organizations have 

recognized the dilemma for years. But the financial empowerment field is still far from 
49 CONSUMER FINANCIAL PROTECTION BUREAU

establishing uniform standards and success indicators. This is an area in which we anticipate 

that the CFPB can add value. 

4.1.2 Success for individuals, for communities, and in the 

marketplace

Assessing the success of empowerment strategies in improving the financial stability of 

individuals and families is fundamental. But some practitioners call attention to determining 

whether we as a nation are improving financial stability and economic mobility for various 

segments of the population. These macro- and micro-level perspectives are both relevant and 

related: As one researcher pointed out at the convening; “besides the measures of the individual 

financial health of a person, there are macro-level measures that would look at broader things 

like access to safe and affordable products by geography or take-up rates.” 

Between the individual and the national levels, there is the neighborhood or community level. 

Some organizations stressed the importance of incorporating the perspectives of consumers of 

empowerment services in deciding what to measure as they evaluate their programs. They 

believe that acceptance and utilization of financial empowerment strategies can be enhanced by 

working with local organizations and using participatory methods of evaluation. Moreover, 

many agree that efforts to promote financial capability and economic self-sufficiency suffer from 

operating in silos, despite their common goals. They believe that recognizing the commonality 

of goals and using a more standardized set of program performance metrics would lead to better 

measures of the quality of services and programs. 

There is an important connection between the goals of financial empowerment initiatives at the 

individual or community level and the mission of the CFPB. The Bureau is accountable to 

encourage a financial marketplace that is safe, transparent, and fair for consumers through 

research, supervision, regulation, education, innovation, and enforcement.

81 We need to know 

whether our efforts to address harmful market practices improve access to safe and transparent

financial services are reaching and helping individual consumers. If the CFPB succeeds in 

 

81 See generally, CFPB, Consumer Financial Protection Bureau Strategic Plan: FY 2013 – FY 2017 (2013), available 

at http://www.consumerfinance.gov/strategic-plan/ (detailing the CFPB’s mission, goals, and methods for 

achieving those goals). 
50 CONSUMER FINANCIAL PROTECTION BUREAU

influencing the broad marketplace, our work should become evident in increased opportunities 

for low-income, economically vulnerable, and other consumers to improve their financial wellbeing. 

4.1.3 From “Program Deliverables” to an integrated 

approach 

It is a truism that “what gets measured is what gets done.” Through our stakeholder 

engagement, we know that many social-service programs specialize in improving a single aspect 

of an individual’s economic life, such as employment or income. Typically, success is measured 

in terms of the specific outcomes defined by a program’s funder. But convening participants 

agreed that this approach does not go far enough in measuring an individual’s success; rather, a 

more holistic approach is called for. 

One presenter at the convening illustrated the disconnect between defining success in terms of a 

specific program-related outcome and a broader definition that encompasses an individual’s 

overall financial well-being. The example given was of a person in a federal workforce program 

where success may be defined by his or her obtaining steady employment at the minimum wage. 

But the limits of this perspective become clear when viewed through the lens of financial 

capability. If the newly employed worker does not know how to manage the new earnings or is 

unaware of the benefits and affordable options for basic financial services, he or she may end up

paying more fees than necessary to get cash or pay bills. High fees combined with other 

increases in expenses associated with maintaining employment (e.g., childcare or 

transportation) could leave the consumer worse off financially. An effective measure of success 

could reveal this information. 

A growing number of municipal governments and nonprofits are working to assess the value of 

integrating financial coaching and counseling into the delivery of social services. The major 

delivery systems offer many potential “touchpoints” for reaching low-income and other 

economically vulnerable people -- times and places where frontline workers can help clients or 

customers modify their financial decision-making patterns and access better options. Because 

government and private agencies provide various benefits and services for people in crisis, they 

touch many segments of the low-income and economically vulnerable population at key 

transitions in their lives. Some of the populations these programs reach include:

 New or returning entrants to the workforce who are receiving job training,
51 CONSUMER FINANCIAL PROTECTION BUREAU

 People who are homeless or facing foreclosure or eviction and need emergency food or 

shelter,

 Community college students receiving financial assistance,

 Domestic-violence survivors who need shelter and support,

 Youth aging out of foster care,

 TANF recipients, and

 People with disabilities.

These numerous life events and circumstances present important opportunities for reaching 

low-income consumers. But municipal practitioners at the convening emphasized that 

integrating financial empowerment strategies will have limited success unless agencies and case 

managers find that this approach does not simply add to their workload, but rather helps them 

achieve their own “program deliverables” and positive client outcomes. 

Financial empowerment efforts are most likely to succeed when the needs of the consumer or

client, the nature of the social service program, and the proper moment to provide education 

and financial capability services are all aligned and the client is empowered to make decisions 

regarding his or her life. That is why the financial coaching approach, which has shown early 

promise and is spreading, emphasizes the importance of helping clients to define their own 

goals and to view the role of the coach or counselor as assisting them in reaching those goals. 82 

4.1.4 Similar goals, different language 

Although there is general agreement that success in financial empowerment should be viewed 

broadly, there is no consensus about what the broader definition of success should include. A 

variety of terms are used to name the desired goal: financial stability, economic self-sufficiency, 

financial capability, economic security, financial empowerment. The range of indicators and 

measures used by various organizations is indeed broad; one organization has developed an

evaluation model using participatory methods and a set of more than 80 indicators and 240

 

82 “Financial coaching is a process whereby participants set goals, commit to taking certain actions by specific dates, 

and are then held accountable by the coach.” J. Michael Collins, Peggy Olive, & Collin M. O’Rourke, Financial 

Coaching’s Potential for Enhancing Family Financial Security, J. Extension at 1 (forthcoming), available at 

http://ssc.wisc.edu/~jmcollin/JOE_12.pdf.
52 CONSUMER FINANCIAL PROTECTION BUREAU

data collection points which are used by a number of programs.83 The table below lists some of 

the indicators cited by convening participants.

TABLE 1: FINANCIAL CAPABILITY INDICATORS

Commonly Used Financial Capability indicators

Increase in income in relation to expenses

Improved credit scores

Increased employment stability

Increase in net worth

Decrease in debt

Increase in savings

Opening and using a bank or credit union account

Opening and contributing to a retirement account

Reducing the cost of financial services

Improved budget management

Changes in financial attitudes about saving and spending

Changes in saving and spending patterns

Convening participants identified three broad measures of financial empowerment that appear 

to be the most commonly used: increase in income left over after expenses; increase in net 

 

83 Jessica Anders et al., Measuring Outcomes of Financial Capability Programs: Success Measures Tools for 

Practitioners 7 (2011), available at 

http://www.successmeasures.org/sites/all/files/FinancialCapabilityOnlineFinalOct2011.pdf.
53 CONSUMER FINANCIAL PROTECTION BUREAU

worth; and improvement of credit scores. Though these measures seem straightforward and 

easily defined, some practitioners believe that they are too limited to capture financial 

empowerment or capability – that they ignore factors such as security, vulnerability, and access 

to the financial system and to appropriate products. Moreover, some practitioners argue that 

success looks different in the context of the various life events or transitions of the consumer.

For example, success for someone on the verge of bankruptcy may look different than success 

for a new entrant to the workforce.

4.1.5 Consumer behavior and attitudes

One presenter suggested that rather than putting forth a single definition of financial 

empowerment, it may be more useful to have broad categories, based on consumer behavior and 

linked to clear, defined financial outcomes. On the other hand, some practitioners and 

researchers argue that consumer attitudes and outlook matter, even though they are less 

frequently measured. Confidence in financial decision-making, satisfaction with the services or 

products, attitudes about money, levels of stress – these and many more factors may influence a 

person’s management of his or her financial life, but are rarely captured in outcome measures. 

One concrete example offered was that of a person who had opened a bank account. While

opening the bank account may be an important first step toward economic security or mobility, 

the consumer’s change in behavior as a result of her own satisfaction in making a positive 

financial decision could be a more significant long-term outcome. This change, however, is not 

easily measured unless the consumer is part of a controlled study of changes in attitudes and 

behavior.

4.1.6 Challenges and “moving the needle”

EXTERNAL CHALLENGES: MARKETS AND POLICIES

There are numerous challenges both in collecting information about financial capability and in 

demonstrating positive impacts yielded by particular approaches, conditions, or products. 

Barriers to accessing affordable market options may make it hard to apply certain success 

measures. For example, if a consumer has limited access to a bank or credit union – whether 

because of transportation issues, disability, or financial barriers like adverse banking history or

minimum balance requirements – it may be unreasonable to use opening and maintaining a 

savings or checking account as a measure of success. In our listening sessions and at the 

convening, we heard that asset limits for recipients of Temporary Assistance for Needy Families 

(TANF), Medicaid, Supplemental Nutrition Assistance Programs (food stamps) and other
54 CONSUMER FINANCIAL PROTECTION BUREAU

income-support programs are powerful deterrents to savings accumulation, and therefore, to 

building financial capability and transitioning from assistance programs.84 In theory, informing 

clients of their right to save a modest amount can partially mitigate the obstacle; however, the 

potential consequences of losing eligibility for these programs may simply be too frightening for 

recipients to maintain a savings account. Thus, asset limits may discourage people considering 

or receiving public benefits from saving for the future.

85

CHALLENGES WITHIN THE FIELD 

Our stakeholders have told us that there is general acceptance of the need for evaluations and 

measures of outcomes and impact to advance the field. But whenever the details are discussed, 

a number of barriers to action emerge:

 Inexperience with using outcome metrics often means that an organization’s staff does 

not understand why information must be collected or why questions are asked in a 

certain way. 

 An organization’s leaders may fail to use the results of evaluations to shape program 

policy or implementation. If a social service program collects outcome data, it is 

important for the staff who are asked to collect it to understand how it may be used to 

improve the program over time. 

 Collecting evaluation data is often viewed as a drain on overcommitted staff resources, 

relevant only to funders. 

 Funding for outside evaluations or evaluation summaries is lacking. 

 Clients may be concerned that the information they disclose will be used to disqualify 

them from other sources of assistance; for example, this is a major issue within the 

disability community. 

 Caseworkers may be hesitant to ask clients certain questions recognizing that clients may 

be embarrassed about their financial decision-making, or unaware of the finances of 

others in the household or family. 

 

84 Asset limits are generally a ceiling on the amount of savings a person can hold and still remain eligible for the 

benefit. See generally CFED, Lifting Asset Limits in Public Benefits Programs (2013), available at

http://cfed.org/assets/scorecard/2013/rg_AssetLimits_2013.pdf (arguing that asset limits in public benefit 

programs are “a relic of entitlement policies that in some cases no longer exist” and should be lifted).

85 Id. at 15. 
55 CONSUMER FINANCIAL PROTECTION BUREAU

 Some organizations may be hesitant to undergo rigorous evaluation because they worry 

their established programs might be found ineffective. 

ADDRESSING THE CHALLENGES

Practitioners and researchers have offered a number of recommendations to address the 

challenges of collecting and using outcome metrics:

 Separate the funding of evaluation from service delivery. Apart from 

alleviating the financial burden on program operators, funding evaluation separately 

from service delivery allows for a more independent and useful evaluation process. 

Program managers often find it difficult to reflect, acknowledge or identify the problems, 

failings, or even successes of their programs. 

 Clarify the rationale and benefits of collecting outcome metrics. Program 

operators and caseworkers may be more willing to collect information on outcomes if it 

is made clear to them why it is being collected. Demonstrating a real connection 

between measuring outcomes and improving programs and results for clients can further 

the goal of measuring the impact and effectiveness of financial empowerment initiatives. 

 Engage clients and use results to benefit them. Improving client outcomes may be 

aided by adding client voices in information collection and usage. Both group and oneon-one techniques may be useful. 

 Know the customer, the client base, and how it is evolving. Organizations and 

evaluators need to understand who is being served and how their needs have shifted. 

They need to respond accordingly in developing their methods for collecting data and 

measuring effectiveness. 

 Information gathering should be timed appropriately. It is best to obtain 

necessary baseline information at intake, but avoid the unnecessary collection of 

information that is unlikely to change in the short term. 

 Metrics should be linked to the specific goals or help sought by the 

consumer. This can both reduce the total amount of information collected and make 

what is collected more relevant to helping the consumer improve his or her life.

CONSUMER PRIVACY

Attendees pointed out that privacy issues are especially thorny, and that they do not lend 

themselves to easy solutions. Privacy rules and laws limit the ability of organizations and 

researchers to collect, disclose, or share personal information – for good reason. In our 

listening sessions, practitioners told us how difficult it is to obtain an overall picture of their 
56 CONSUMER FINANCIAL PROTECTION BUREAU

clients’ financial situation, which means that they may not be able to provide the best possible 

advice and assistance to integrate services effectively. Developing inter-agency memoranda of 

understanding for information-sharing and establishing procedures and protocols for seeking 

permission from clients and for protecting confidentiality could help. But implementation is 

difficult and costly.

USE OF PROXY INDICATORS

In outcome evaluation it is not uncommon to use proxy indicators to measure change when 

direct data is not available. Identifying and assuring the accuracy and effectiveness of proxies is 

sometimes difficult. However, several convening participants suggested that social services 

providers, and the organizations and individuals who fund their programs, should do more to 

identify and use proxies to measure the effectiveness of empowerment interventions just as 

proxies can be used in other contexts, for example to measure product safety.

4.1.7 Advancing the field: standardizing, sharing, and 

aggregating information 

Despite – or because of – the fragmentation and diversity of efforts to collect information that 

could help to evaluate the imprint of financial empowerment programs, many practitioners have 

expressed an appetite for standardizing both how information is reported and what is reported. 

One convening attendee expressed an often-heard wish of practitioners: 
57 CONSUMER FINANCIAL PROTECTION BUREAU

For the philanthropic community or the federal agencies that are funding these 

initiatives [to] somehow build consensus on a handful of data elements that could be 

actually useful in getting to outcomes...[and] then also giving some indication of long 

term impact.86 Unless we find some way to come together and aggregate that 

information... we’re going to be fractured and fighting for really limited dollars. 

However, the issue is not simply one of competition for funds: It speaks to the utility of program 

information to improve client outcomes. It is not uncommon for organizations and agencies

with unique programs or strategies to collect different types of information about the same 

client. If these entities had the same information about the people they serve, it could help 

develop a more holistic view of client financial-stability outcomes and, possibly, reduce the costs 

of service. More broadly, standardizing data may also make it possible to accurately analyze 

conditions and changes in the market, which may inform changes in policy that would offer new 

opportunities and better protect consumers. 

One caveat emerged from these discussions at our convening. Representatives of financial 

institutions expressed mixed views on standardizing data. While they believed the concept has 

value, their support was qualified by the need to know for what purpose the information would 

be collected, how it would be used, and how it relates to their regulatory and legal obligations 

pertaining to customer or member privacy. 

RECOGNIZING CULTURAL DIVERSITY

The low-income and economically vulnerable population is extremely heterogeneous.87 The 

drive to create standardized categories and outcome data that programs collect should not 

negate the efforts to obtain more granular information that may be needed to best serve certain 

segments of the population. As participants heard from several convening presenters, there is 

 

86In this context we understand outcome data measures to describe changes for program participants, whereas 

impact data measures are the difference between outcomes for participants as compared to non-participants. In 

other words, “impact” suggests a causal effect, whereas “outcome” is an observed state of being for program 

participants. 

87 See generally Margaret C. Simms, Karina Fortuny, & Everett Henderson, Racial and Ethnic Disparities Among 

Low-Income Families (2009), available at http://www.urban.org/UploadedPDF/411936_racialandethnic.pdf

(noting the importance of acknowledging the racial and ethnic differences among low-income families). 
58 CONSUMER FINANCIAL PROTECTION BUREAU

substantial diversity within certain groups like immigrants – even those from the same country 

-- or Native Americans, reflecting distinctly different cultural, linguistic, and other 

characteristics. Current information-gathering practices may not provide the specific 

information necessary to assess problems, develop effective marketing campaigns, or determine 

outcomes or impacts within these groups. Participants observed that cultural sensitivity and 

understanding the needs of different populations are critical to defining success for these 

consumers. 

4.1.8 Potential roles for government: Consult, convene, and 

coordinate

Some practitioners argue that government should help providers of financial empowerment 

services to standardize, aggregate and, share outcome data to increase program effectiveness. 

At least one municipal government, the City of New York, is already working toward this goal, 

attempting to coordinate data across systems and agencies in order to compare client stability 

measures with program outcomes. 88 One benefit it hopes to demonstrate is a reduction in the 

cost of delivering services. 

The challenges may be greater at the federal level, but the rewards could be major advances to 

the empowerment field, as outlined below.

 Improving Data Credibility. Nonprofit practitioners expressed concern that 

public and private funders currently give limited credence to the qualitative, nonnumerical information they collect. These practitioners believe that anecdotal and 

qualitative data are important in determining outcomes; some argue specifically that 

a participatory evaluation process enhances the picture derived from metrics. 

However, they agree that is difficult to demonstrate success without accepted 

standards of accuracy, verifiability, and reliability. They noted that developing 

guidance on when and how the various types of information can be used would be 

very helpful to the empowerment field. It was suggested that the federal government 

could begin to develop minimum information-collection standards by gathering and 

analyzing information from nonprofits about their current guidelines and protocols.

 

88 New York City Dep’t of Consumer Affairs Office of Fin. Empowerment, supra note 41, at 19.
59 CONSUMER FINANCIAL PROTECTION BUREAU

 Evaluation. The evolution of projects and programs from start-up to scale-up 

presents challenges. Different stages involve different types of research and 

evaluation. One participant suggested, “If [government] can bring together expert 

voices so that they can connect people who want to have their programs evaluated 

with the people who know how to do that, that would be a really great opportunity.” 

 Creating a “Financial Health Index.” The convening reinforced a lively 

discussion in the financial empowerment field about creating a financial health index 

as a way to capture or measure consumers’ financial capability or well-being. The 

idea originated with university research on financial capability. Precisely what the 

index should be and what it would mean are not yet established in the field. 

However, many convening participants agreed that there should be a standard or a 

goal that consumers can measure themselves against. This would be useful not only 

for individuals to gauge their situation and improvement over time, but would also 

help practitioners, policymakers, and financial innovators. For example, if a certain 

set of financial characteristics were set as markers of financial well-being, programs 

and policies could be devised to drive toward those measurable goals. Setting clearly 

articulated and agreed-upon goals could also focus and spur innovation in the 

marketplace. 

Participants remarked that a financial health index could be used as both a 

diagnostic tool and as a means to provide a whole menu of outcomes and measures 

related to enhancing consumers’ financial well-being. There was agreement that the 

index should interact in some dynamic way with individual factors such as market 

choices and costs, as well as barriers and differences among consumers. 

Representatives of financial institutions offered a cautionary note. They expressed 

concern about possibly being seen as indirectly responsible for bad choices made by 

consumers who use one of their products and services but have a negative outcome. 

 Enhancing current financial information-collection surveys. Some 

financial empowerment practitioners argued that major national surveys of financial

services and needs would provide a fuller picture of the condition of consumers if 

they incorporated qualitative information. They suggested that the federal 

government could help identify and define what is missing from current data-
60 CONSUMER FINANCIAL PROTECTION BUREAU

gathering efforts like the Survey of Consumer Finances, and propose ways to add 

qualitative information to these existing sources of information.89 

 Knowledge-sharing to build the field. One suggested role for the government 

was to create a mechanism for researchers and practitioners to share and learn from 

each other’s work. This could take the form of a learning platform modeled after the 

disease information clearinghouse of the National Institutes of Health (NIH).90 

Participants stated that it would be extremely useful for the government to enable the 

field to share data and evaluations in real time. 

4.1.9 Learning from international experience

The international field of financial inclusion offers possible lessons for financial empowerment 

in the United States. One convening attendee remarked that the international field envisions “a 

world in which all households and businesses can access and use a broad range of appropriate 

financial services that increase economic opportunity and reduce vulnerability to shocks, and 

are responsibly and sustainably provided by institutions permitted to do so.” The attendee 

pointed out that, like the CFPB, international practitioners look both at the supply and demand 

sides of the financial services marketplace. From this perspective, measuring success is not only 

about increasing the financially capability of individuals, but determining whether they have 

access to a responsible market in which overall financial health can be sustained. 

Convening participants remarked on the approach taken in international microfinance, a 

primarily nongovernmental strategy to bring financial services to the poor. In this field, 

implementing an open platform to share data, research approaches, and findings has shown 

 

89 The Survey of Consumer Finances is a survey normally conducted every three years by the Federal Reserve Board 

that measures families’ balance sheets, pensions, income, and demographic characteristics. Fed. Reserve Board, 

2013 Survey of Consumer Finances, http://www.federalreserve.gov/scf/ (last visited Sept. 12, 2013). 

90 NIH offers online clearinghouses for a number of diseases and disorders such as the National Diabetes Information 

Clearinghouse. Nat’l Inst. Of Diabetes and Digestive and Kidney Diseases, National Diabetes Information 

Clearinghouse, http://diabetes.niddk.nih.gov/ (last visited Sept. 17, 2013). 
61 CONSUMER FINANCIAL PROTECTION BUREAU

promise in improving the quality, standardization and accessibility of data.91 Various

consultative groups have also developed performance indicators to measure financial inclusion 

at the macro level. One example used by the Global Partnership for Financial Inclusion is the 

number of bank accounts per 1,000 adults.

92 It was noted that establishing standards for the 

“social return” on investment by microfinance providers has advanced further than establishing 

standards for client outcomes.

One suggestion from convening participants who work internationally was to create incentives 

for organizations to improve the completeness and accuracy of their information collection 

efforts. Internationally, investors have served as the impetus behind the push for standards. In 

the U.S., public and private funders could prove to be the catalyst.

Mexico was cited as an example of a government playing a coordinating function. It has 

promoted standardization across agencies, harmonized its own reporting requirements,

assembled data from as many relevant sources as possible, and put data on an open platform. 

Before doing a national survey, the Mexican government pulled together all data relevant to

financial inclusion. 93 

It was clear from the discussion at the convening that for those working internationally in the 

financial inclusion field, there is both the incentive and the desire to be creative in measuring 

effectiveness. Stakeholders in the domestic financial inclusion field can perhaps learn from 

international colleagues and possibly replicate their efforts. 

 

91 Consultative Group to Assist the Poor, Good Practice Guidelines for Funders of Microfinance 16 (2006), available 

at http://www.cgap.org/sites/default/files/CGAP-Consensus-Guidelines-Good-Practice-Guidelines-for-Fundersof-Microfinance-Oct-2006.pdf.

92 The World Bank, Depositors with Commercial Banks (per 1,000 Adults), 

http://data.worldbank.org/indicator/FB.CBK.DPTR.P3 (last visited Sept. 12, 2013). 

93 See generally, Alliance for Financial Inclusion, Measuring financial inclusion in Mexico: CNBV’s approach to 

obtaining better data for decision makers (2011), available at http://www.afiglobal.org/sites/default/files/afi%20case%20study%20mexico_0.pdf (evaluating how effective data collection 

efforts have been in promoting financial inclusion in Mexico). 
62 CONSUMER FINANCIAL PROTECTION BUREAU

4.1.10 The role of the CFPB 

The Bureau plays multiple roles in helping to financially empower consumers. Identifying risks 

to consumers, writing rules that are effective and efficient, and enforcing federal consumer 

protection laws all contribute to leveling the playing field for consumers of both bank and 

nonbank products and services. 

Through its Consumer Response system, the CFPB receives and follows up on individual 

complaints about consumer interactions with financial service providers, offering a unique and 

responsive service to address specific consumer issues. 94 In addition, the Bureau categorizes

and publishes aggregated complaint data with an eye to protecting individual privacy. The CFPB 

also offers a platform for consumers to tell their stories, which creates an important resource for

people to share their experiences.95 Finally, the CFPB’s information-gathering enables it to shine 

a light on policies and practices that both hinder and advance financial empowerment for lowincome and other economically vulnerable people. 

 

94 To submit a complaint, visit consumerfinance.gov/complaint/. 

95 To “Tell Your Story” visit https://help.consumerfinance.gov/app/tellyourstory.
63 CONSUMER FINANCIAL PROTECTION BUREAU

5. Scale: Defining it, planning 

for it, achieving it

5.1 Defining scale

Many promising programs to build financial capability are emerging across the country. Some 

use new technologies, while others are designed around current understanding of how 

consumers make decisions. Still others focus on leveraging existing networks. All seek to create 

impact and drive change; most claim to be working to achieve scale. For the Office of Financial

Empowerment, charged with addressing the needs of tens of millions of low-income and 

economically vulnerable consumers, the issue of scale is central to our work. 

However, in the words of one presenter, “scale is in the eye of the beholder.” Scale is often 

determined by the objectives of a project or product and the number of people it targets. For 

some, achieving scale means reaching a group of consumers in one defined community or a 

certain age group within a municipality or state. Some innovators focus on lowering operating 

costs as a path to taking a program or product to consumers nationwide.

To further the discussion, convening participants agreed to a simple working definition. They 

defined scale as “the ability to develop a program or product that effectively and efficiently 

reaches its goals and positively impacts an increasing number of people.” But moving beyond 

this general definition enters more challenging territory, because program goals may be vastly 

different. Stakeholders frequently view success differently, often as a function of a particular

program or platform.
64 CONSUMER FINANCIAL PROTECTION BUREAU

5.1.1 Perspectives of government, business, and the 

nonprofit sectors 

For the nonprofit sector, scale is frequently determined by the mission of the organization.

Achieving scale could mean effectively serving a relatively small sub-section of the total 

population, but serving a significant majority of individuals most in need or hardest to reach. 

Others believe scale may be achieved by finding effective ways to bring down the cost of 

replicating services, such as through technology or partnerships. Within the private sector, scale 

may be a function of the size of the market and the market-penetration threshold at which an 

activity or product becomes profitable. Government entities have a different set of requirements 

that are centered on access and equity; because public resources are used, achieving scale

generally means providing comparable services to either all residents of a municipality, state, or 

nation, or all people within a specific subgroup based on qualification such as income level or 

disability. This presents unique challenges that most nonprofits or business entities do not face. 

Achieving scale is not an end in itself. For example, as Director Cordray noted, “during the 

financial crisis, many innovations in the mortgage market achieved scale, but at the cost of great 

harm to consumers.”96 Moreover, scale achieved through standardization may leave behind 

segments of the low-income and vulnerable populations with differing needs rooted in diverse 

cultures or circumstances.

5.1.2 Preparation and strategic planning

Regardless of the sector, size of the population or market, and type of innovation, we heard 

consensus about certain preconditions for developing a scalable initiative. 

 First, there must be a defined need among the target population for the program, 

product, or service. 

 Second, adequate institutional support and financial resources must be available for 

start-up or expansion. 

 Third, there must be strategic plans in place to address the barriers that will limit 

success. 

 

96 Cordray, supra note 15. 
65 CONSUMER FINANCIAL PROTECTION BUREAU

MAKING THE CASE FOR CONSUMER ACCEPTANCE AND INSTITUTIONAL SUPPORT

Attendees identified several important factors in meshing the interests of consumers and 

institutions in order to achieve a level of scale. 

 Make the “value proposition” clear and relevant to potential users. 

Convening attendees agreed that new users of a product or service must clearly 

perceive its value in their own lives. It is helpful when consumers see others of their 

group using the product, or when it is perceived to have become “mainstream.” This 

acceptance reinforces consumers’ confidence in the value of a product or service and 

in their decision to use it. 

 Perceptions Matter. Research shows that people of low-to-moderate means are 

more likely than the general population to base their decision-making on values such 

as belonging, respect, and trust.97 In order to build their customers’ trust and 

respect, financial institutions would do well to get to know their customers specific 

needs and goals. At least initially; convening attendees recommended that they 

should avoid using common bank practices such as up-selling products to people 

who are just getting by. They should give ample attention to the diversity and 

engagement of new customers to make sure that they feel genuine respect and a 

sense of belonging.98

 Prepare for the level of demand. Failing to anticipate and prepare for the level 

of demand can doom the expansion of a new program or product. As attendees 

pointed out, some initiatives achieve great success during the startup phase but fail 

subsequently to maintain or build upon it because, among other factors, institutional 

support and commitment did not match the potential demand. Thus, initial 

successes may not translate into long-term impact and sustainability.

 

97 Edna R. Sawady and Jennifer Tescher, Financial Decision Making Processes of Low-Income Individuals 8 (2008), 

available at http://www.jchs.harvard.edu/sites/jchs.harvard.edu/files/ucc08-2_sawady_tescher.pdf. 

98 Id.
66 CONSUMER FINANCIAL PROTECTION BUREAU

 Develop an effective communications strategy. Too often, promising 

programs and products are not well communicated to the public or target population. 

Suggested strategies included these: 

 Identify the best touch points and appropriate channels and modes of 

communication. It is especially important that the target population gets 

information about a new program from trusted sources. 

 Build public awareness throughout the deployment. It is not enough to 

communicate only at the time of launch. As a program or product moves 

from its initial stage to reach larger groups, it is important to keep “telling 

your story.” Communications and marketing at successive stages of 

implementation can help reach new populations and promote impact. 

 Identify and leverage partnerships. As several attendees observed from their 

own experience, numerous multi-sector partnerships may be required to scale up a 

project. For example, a financial institution, municipal agencies, a school system, 

and community organizations were all enrolled in the Kindergarten to College (K2C) 

savings program in San Francisco (described in more detail below). 

 Align incentives. Providing the right incentives to key stakeholders and potential 

users is a critical first step. Obviously, the users of a new product or service must 

perceive and receive a benefit. The incentives of partners must be aligned as well. 

For example, a municipal government or social service agency may want to increase 

the number of its social-service clients who are “banked” as a means to promote 

financial stability, while a participating financial institution may want to expand its 

customer base. Both objectives may be compatible. 

 Define success and establish benchmarks. Determining the benchmarks for 

success is essential to early strategic planning. Establishing milestone of success for 

every stage from proof-of-concept to major expansion will help determine the impact 

on the target population.

 Measure Program Outcomes. It is important to invest in and plan for the 

research and the development of metrics that will be needed to evaluate their 

program and research throughout implementation. This aids in analyzing potential 

costs as well as impact as the initiative is expanded. 
67 CONSUMER FINANCIAL PROTECTION BUREAU

 Consider universal design. As advocates in the disability community pointed out 

during our convening, developing a program with broad appeal allows it to reach 

people with diverse needs across a wide range of demographics. Even in programs 

that aim to reach a small community, it is important to recognize that consumers will 

have many different needs. Designing an initiative to be universally compatible 

makes it possible to reach larger numbers of people and at the same time minimize 

possible repercussions from failing to meet the needs of important consumer 

segments.99

 Incorporate insight from the science of consumer decision-making. 

Research has shown that when consumes have to decide on whether to accept a 

savings offering, they are much more likely to participate if they have to choose to opt 

out rather than opt in.100 This behavior is most prominently demonstrated in 

employer-offered retirement programs, where it has been found that the rate of 

participation is significantly higher under automatic enrollment. Moreover, the 

default contribution rate suggested by the employer can heavily influence the 

employee choice about how much to save.101 

IDENTIFYING BARRIERS AND CHALLENGES

Policy, infrastructure, and resource barriers can limit the scaling of initiatives. Practitioners 

stressed that almost all of these barriers can be addressed, but they are all interconnected, so 

that failing to address any one area could impact others. 

 

99 The term “universal design” was coined by the architect Ronald Mace, who challenged the conventional approach 

of designing for the average user and provided a design foundation for more accessible and usable products and 

environments. Mace defines universal design as "the design of products and environments to be usable to the 

greatest extent possible by people of all ages and abilities." Molly Follette Story, James L. Mueller & Ronald L. Mace,

The Universal Design File: Designing for People of All Ages and Abilities 2 (1998), available at

http://www.ncsu.edu/ncsu/design/cud/pubs_p/pudfiletoc.htm.

100 Brigitte C. Madrian & Dennis F. Shea, The Power of Suggestion: Inertia in 401(K) Participation and Savings 

Behavior 1 (2000), available at http://www.nber.org/papers/w7682.pdf.

101 Id.
68 CONSUMER FINANCIAL PROTECTION BUREAU

 Regulatory concerns. Failing to incorporate or adjust to existing policies and 

regulatory guidelines could create long delays or limit the expansion of an initiative. 

Developing a complete picture of the regulatory landscape during the research and 

planning process can make it easier to navigate hurdles and reduce unnecessary 

investment that could impede progress.

 Infrastructure. It is essential to identify infrastructure needs and systems challenges 

early in the planning process. Failing to plan for and build needed infrastructure 

typically leads to unforeseen costs or a poor end-user experience. Both outcomes could 

lead to failure.

 Resource limitations. For government, business, and nonprofit entities alike, 

identifying and planning for resource limitations always impacts the success or failure of 

an initiative. For example, when taking a program from the pilot phase to scale, it is rare 

that significant additional resources are not required. It is important to understand the 

potential costs involved in reaching growing numbers of consumers. 

5.1.3 Government initiatives 

Federal, state, and local government agencies serve millions of consumers each day, providing 

services that range from financial protection to workforce development to housing programs. 

Crafting a package of financial empowerment services that leverages these government 

programs has the potential to quickly take a promising program from serving hundreds or 

thousands of people to millions. The convening included presentations by the leaders of two 

prominent, local financial empowerment initiatives aimed at achieving scale by incorporating 

services into public programs that reach large numbers of consumers. 

CITY OF SAN FRANCISCO: KINDERGARTEN TO COLLEGE (K2C)

The City and County of San Francisco’s Kindergarten to College (K2C) program illustrates the 

application of lessons learned in the scaling process. K2C is the first publicly funded, universal 

children’s college savings account program in the United States. At the convening, the San 

Francisco City Treasurer said his city’s plan to promote savings called for reaching all children 

entering San Francisco public schools in the city. Early in the planning process, city officials

identified both the infrastructure and policy challenges they would face. There was a clear need 

to develop a platform and underlying structures that would make it possible to provide accounts

effectively and efficiently to a large target market – namely, the families of every child in the city 

entering kindergarten each year. 
69 CONSUMER FINANCIAL PROTECTION BUREAU

Officials recognized that collaborating with key partners was a critical first step. This required 

extensive programmatic changes and capacity-building within the participating schools. It 

meant collaborating with another stakeholder – in this case, a bank that could provide both 

infrastructure and capacity, and whose goals of building its customer base aligned with the city’s 

goals of helping families gain access to financial services. Equally important – in order to get 

the word out – the city partnered with local community organizations that were trusted by and 

connected with the target population.

Finally, planning for the user experience was vital. To successfully reach scale, kindergartners 

and their families had to access and use the accounts easily. The city recognized that consumer 

interaction had to be simple and appealing or else they would not use the product. The city 

invested considerable time in making the sign-up process accessible, and it structured a match 

program to encourage regular monthly saving by consumers. 

NEW YORK CITY: “SUPERVITAMINS” TO ACHIEVE SCALE

In New York City, the Department of Consumer Affairs (DCA) houses its Office of Financial 

Empowerment along with its consumer protection functions. According to the Commissioner of 

Consumer Affairs, who presented at the convening, the city has a multi-pronged approach to 

enhancing economic stability. It has created a number of Financial Empowerment Centers that 

connect consumers to safe banking opportunities and to quality financial counseling and 

education, with a goal of stimulating positive behaviors including savings and wealth-building.

It has also developed its new “Supervitamin” approach that builds financial-capability services 

into multiple city programs. Having identified effective approaches to providing basic financial 

services, the office works to incorporate financial empowerment into the primary anti-poverty 

services that many thousands of low-income people rely on, such as homeless prevention, 

housing counseling, emergency food distribution, legal services, and programs for people 

transitioning from public assistance. 

DCA emphasizes that its approach has not been to convince potential partners to “provide an 

extra seat at their table.” Instead, it has been to weave financial empowerment into the everyday 

work of these agencies. By integrating these services into the multiple streams of programs and 

resources, it is now able to scale its financial empowerment services, while helping to drive 

outcomes for other city agencies and programs that serve low-income consumers. 

Implementing the financial empowerment initiative through the Department of Consumer 

Affairs also enhances another key dimension of financial empowerment. City government 

comes into contact with many financially vulnerable consumers who have been the targets of 
70 CONSUMER FINANCIAL PROTECTION BUREAU

deceptive and other illegal consumer or financial practices. As a result, DCA is able to link its

overall consumer protection function specifically with financial empowerment. 

5.1.4 National perspectives: Federal policies and program 

opportunities 

ASSET-LIMIT POLICIES

Government policies can play a major role in facilitating or impeding financial-services 

innovations for low-income and economically vulnerable consumers. To help empower this 

population, presenters at the convening suggested focusing on changing the policies that restrict 

the amount of savings and assets individuals may have without losing eligibility for incomebased government support.102 Consumers who rely on federal public benefits such as the 

Supplemental Nutrition Assistance Program (SNAP), Medicaid, or Supplemental Security 

Income (SSI) have a difficult task navigating the various asset limits of these programs.103 

Moreover, the current policy landscape is overlaid by a web of asset rules that vary from state to 

state.104 Convening participants observed that the complexity of these policies, and the anxiety 

they cause consumers about losing eligibility, can impede scaling initiatives like Individual 

Development Accounts (IDAs). Removing or modifying these asset constraints could facilitate 

the scaling-up of new and promising asset-building programs. 

Meanwhile, there is room to educate consumers about their rights to save under current 

policies. A few federal agencies weave innovative strategies into their current service delivery 

models to help people receiving public benefits move up the economic ladder, as the examples 

below illustrate.

 

102 In his Fiscal Year 2011 budget, President Obama proposed raising asset limits to no less than $10,000 for all 

federally funded means-tested programs serving low-income adults and their families. Admin for Children and 

Families, US Dep’t of Health and Human Serv., FY 2011 President’s Budget Request for the Administration for 

Children and Families 4 (2011), available at http://www.acf.hhs.gov/sites/default/files/olab/2011_all.pdf.

103 See generally CFED, supra note 82.

104 See generally id.
71 CONSUMER FINANCIAL PROTECTION BUREAU

ADVANCING FINANCIAL EMPOWERMENT: TWO KEY FEDERAL AGENCIES 

Participants at the convening heard from senior officials in two agencies that reach millions of 

consumers during critical times in their lives – the U.S. Department of Labor (DoL) and the U.S. 

Department of Health and Human Services (HHS). Their respective programs offer valuable 

opportunities to reach consumers at important teachable moments: for example, when they are 

enrolled in job-training programs, or receive Temporary Assistance for Needy Families (TANF), 

or heating assistance. For these two agencies and others, both policy reforms and 

programmatic changes could help scale financial empowerment initiatives. 

U.S. Department of Labor

The Assistant Secretary for the Office of Disability Employment Policy (ODEP) told attendees 

that the DoL supports nearly 3,000 American Job Centers (formerly, One-Stop Centers)

nationwide that provide services to employers, employees and jobseekers. These centers are 

positioned to be hubs of innovative initiatives that could bring together financial empowerment 

with employment services.

Specifically, within the DoL, ODEP currently utilizes financial empowerment strategies to help 

improve outcomes for workers with disabilities. One example is the collaboration with the 

Employment and Training Administration (ETA), where ODEP has implemented the Disability 

Employment Initiative (DEI). DEI focuses on building the capacity of the public workforcedevelopment system in 23 States to advance employment and economic self-sufficiency for 

youth and adults with disabilities. Of these programs, 16 have added asset development as a 

priority. Additionally, ODEP established the LEAD Center (Leadership on Employment and 

Economic Advancement for Individuals with Disabilities). Among a number of functions, LEAD 

makes recommendations to shape policy and practice to improve the financial capability of 

individuals with disabilities. LEAD is working on strategies to integrate financial capability 

within selected American Job Centers.

The potential for DoL initiatives to promote financial empowerment goes beyond workers with 

disabilities. By designing services based on universal design (described earlier), DoL programs 

have the potential to impact all workers. 

U.S. Department of Health and Human Services

Within HHS, the Administration for Children and Families (ACF) has federal responsibility for 

numerous programs that impact low-income children and their families, including Head Start, 

Child Support Enforcement, Temporary Assistance for Needy Families (TANF), the Low-Income 
72 CONSUMER FINANCIAL PROTECTION BUREAU

Home Energy Assistance Program (LIHEAP), the Social Services Block Grant, and many others. 

The Director of ACF told attendees that while all of these programs work with specific 

populations and have specific objectives, they are working towards the common goal of financial 

stability. 

ACF launched the Assets Initiative to incorporate asset-building as a core component of its 

programs. This initiative identified six strategies that it considers core to financial 

empowerment: savings, credit counseling, mainstream banking, tax assistance, benefits access, 

and financial education. To implement its strategies, ACF has focused on several programs that 

serve some of the nation’s most vulnerable families.

 One set of initiatives incorporates financial education into the curriculum for both 

child and parent participants in Head Start.

 Another initiative brings asset-building experts together with participants in the 

child-support system, specifically non-custodial parents who may face major issues 

of debt management and credit. 

 In another area, ACF is working to address financial issues specific to youth who are 

in or aging out of the foster care system. A federal legislative mandate requires that 

older youth in foster care receive annual supervised reviews of their credit records in 

order to identify and resolve problems such as identity theft.105 

Across the range of ACF programs, there are a number of important questions that will help 

determine the success of future broad-scale financial empowerment programs. For example, 

there is a strong emphasis throughout ACF on preparing people for employment and increasing 

rates of retention in entry level jobs. A key task will be demonstrating that a set of financial 

empowerment services could make a significant difference in improving job retention. 

 

105 Child and Family Services Improvement and Innovation Act, 42 U.S.C. § 675(5)(I).
73 CONSUMER FINANCIAL PROTECTION BUREAU

6. Conclusion: Advancing the 

field of financial 

empowerment 

The field of financial empowerment has come far in the last decade. This is reinforced by what 

we have learned through the convening and the listening sessions we have held around the 

country. New initiatives have multiplied, fostered by non-profits, governments and social 

entrepreneurs. Technology has brought new tools; increased understanding of consumer 

decision-making has brought new insights and strategies; philanthropy has nurtured 

innovation; and many financial institutions have introduced new products and services for the 

underserved market. Perhaps most promising of all, partnerships have emerged to maximize 

the strength of all these varied approaches. 

Despite this progress, financial empowerment is still an emerging field. Research has begun to 

illuminate and validate some promising initiatives. But there is much to be learned, and much 

more to be proven to ensure that these initiatives produce tangible, measurable improvements 

in the financial lives of millions of low-income and economically vulnerable consumers. 

The Office of Financial Empowerment is a relatively new team in a still-new agency. Our 

national convening pointed to ways in which we, as a unique federal entity, can accelerate the 

positive momentum that so many in the field have contributed to. In the months ahead, we will 

direct our attention toward researching what works, developing evaluations and deploying tools,

and exploring collaborations that can bring financial empowerment to a new level. 

6.1.1 Tools for the field: training social services staff 

Various public and nonprofit initiatives have shown the value of utilizing existing social services 

touchpoints to introduce clients to financial empowerment concepts and resources. In our 

listening sessions around the country, agency staff members reported that as their clients 
74 CONSUMER FINANCIAL PROTECTION BUREAU

address budgeting, debt, and savings issues, they become better able to achieve program goals 

such as steady employment or the transition from homeless shelters to stable housing. 

However, at one session, participants reported that case managers who are not specifically 

trained in financial empowerment feel unprepared and reluctant “to have the money 

conversation with clients.”

To overcome that obstacle, we began by commissioning a scan of existing programs that provide 

financial empowerment training to case managers. The scan identified promising practices, and 

we are using that information to guide our creation of a training curriculum and a toolkit that 

case managers can use with clients. The first objective of the training is to help case managers 

understand how financial empowerment aligns with their program goals and client outcomes. 

The toolkit aims to increase case managers’ ability to assess clients’ financial situations and to 

provide the right tools or referrals at the right time. The training and toolkit will also help case 

managers understand how to link clients to the Bureau’s decision-making tools and consumer 

protection and financial education resources. 

We will test the curriculum and toolkit through community-based trainings for case managers in

2013, revising it as appropriate based on user feedback. After a second cycle of testing and 

revision, we plan to make the full toolkit available free of charge to social service agencies. With 

some customization, this resource may be useful to other professionals who work with people 

facing financial challenges, such as legal services staff and leaders of local faith communities.

6.1.2 Research 

In collaboration with the other offices of the CFPB, we are engaged in a variety of efforts to 

advance knowledge in the financial empowerment field. Our initiatives range from broad scans 

of promising products and services, to studies of consumer decision-making approaches, to 

rigorous evaluations. 

FINANCIAL CAPABILITY

Through our field research, we have learned of a number of promising approaches to building 

financial capability that combine or “bundle” financial products and/or integrate financial 

counseling or coaching in other service-delivery systems. Especially interesting are efforts that 

seek to combine “low-touch” (i.e., product-based, more readily scalable) interventions with

“high-touch” (i.e., more costly, less scalable) approaches. However, we have found little 

rigorous research that indicates what is effective for low-income and economically vulnerable 
75 CONSUMER FINANCIAL PROTECTION BUREAU

consumers. To help fill this gap, the CFPB has contracted for a three-phase informationgathering project, which began by inventorying the range of current initiatives, thereafter 

proceeding to in-depth analysis of selected projects and, ultimately, to promoting pilot projects 

that attempt to capture and build upon the best practices we have identified. Among the 

indicators of positive consumer outcomes under consideration are; a transition to safer, more 

affordable products and services, especially ones that build wealth and improve access to credit;

increased savings; and/or obtaining and improving credit scores.

ADVANCING COMMON STANDARDS AND OUTCOME MEASURES

The many public and private programs to increase financial capability use a variety of standards 

and measures to assess their success. Through our convening and listening sessions, we heard 

from many practitioners, researchers and others that it would be appropriate for government to 

facilitate information-sharing and the creation of a set of common standards for financial wellbeing that can be used throughout government and the private sector, so that stakeholders can

accurately see the aggregated effects of financial-capability programs.

The CFPB’s Office of Financial Education (OFE) in collaboration with the Office of Research, is 

working on a multi-year project to lay the foundation for measuring the financial well-being of 

all consumers and identifying the knowledge and conduct that supports financial well-being. 

We will work in tandem with our colleagues to identify relevant outcome measures for federal 

programs that integrate financial empowerment tools into services for low-income and 

economically vulnerable consumers. Our initial steps include:

 Conducting a scan of public and private programs to identify the outcome measures 

currently used to assess financial empowerment and capability,

 Determining those outcome measures that would most appropriately track success in the 

various federal programs, and

 Conducting outreach to various stakeholders, including government agencies and 

foundations, to identify strategies to advance coordination of efforts.

TAX-TIME SAVINGS AND ASSET BUILDING

Throughout the 2012 tax season, the Office of Financial Empowerment worked with the CFPB’s 

Office of Financial Education to launch an initiative to encourage consumers eligible for Earned 

Income Tax Credits (EITC) to save some portion of their refunds in qualified savings vehicles. 

We worked collaboratively with the Internal Revenue Service and with non-profits that provide 

free tax preparation services in the Tulsa, OK, and Jackson, MS metro areas, and in Durham, 
76 CONSUMER FINANCIAL PROTECTION BUREAU

NC. In 2013 our two offices will ramp up Bureau efforts by engaging more sites and providing 

communication and training tools for volunteer tax preparers and consumers.

6.1.3 Collaboration: Federal partnerships

Millions of low-income and other vulnerable populations have short- or long-term contact with 

the agencies delivering federal assistance programs. By working with federal agencies to 

integrate financial empowerment tools into these delivery systems, we see the potential to reach 

consumers at the right moment and to achieve large-scale impacts on low-income and 

economically vulnerable populations.

Our approach attempts to achieve changes in the short term in programs that serve specific 

populations -- such as persons with disabilities and youth aging out of foster care -- as well as to 

advance long-term, agency-wide policy changes. Initially, we will attempt to integrate financial 

empowerment work into programs that focus on major life-cycle transition points, such as entry 

into employment. The key strategies we will work to propagate include: 

 Consumer protection,

 Access to financial products and services,

 Money management,

 Credit management, and

 Savings and asset-building.

The Office of Financial Empowerment will collaborate with federal agencies through joint 

outreach strategies, providing training materials, identifying policy and practice reforms, and 

conducting educational webinars. We are exploring the following initiatives: 

 Developing a strategy to integrate financial-capability education and training when 

foster youth age sixteen and older receive their annual free copy of their credit reports as 

required by law, 

 Identifying opportunities to integrate financial empowerment strategies into programs 

that serve both custodial and noncustodial parents, 

 Developing a partnership to strengthen financial capability among persons with 

disabilities who receive employment-related services, and

 Partnering with our colleagues across multiple federal agencies to implement the 

“Starting Early” strategy of the Financial Literacy and Education Commission (FLEC).
77 CONSUMER FINANCIAL PROTECTION BUREAU

APPENDIX A: CFPB RESOURCES

CONTACT THE OFFICE OF FINANCIAL EMPOWERMENT: Empowerment@CFPB.GOV

TELL YOUR STORY: http://help.consumerfinance.gov/app/tellyourstory

COMPLAINTS: http://www.consumerfinance.gov/complaint/

ASK CFPB: http://www.consumerfinance.gov/askcfpb/

RULEMAKING: http://www.consumerfinance.gov/notice-and-comment

REGULATION: http://www.consumerfinance.gov/regulations/

CFPB TWITTER: @CFPB

CFPB FACEBOOK: http://www.facebook.com/CFPB

CFPB BLOG: http://www.consumerfinance.gov/blog/
78 CONSUMER FINANCIAL PROTECTION BUREAU

APPENDIX B: CONVENING AGENDA

Empowering Low-Income and Economically 

Vulnerable Consumers: Making the Case 

through Access, Data, and Scale

AGENDA

November 28 and 29, 2012

CFPB Headquarters, 1700 G Street NW, Washington DC

1:00 REGISTRATION

1:30 - 2:45 INTRODUCTIONS: WELCOME TO THE CFPB

Cliff Rosenthal, Assistant Director, Office of Financial Empowerment, CFPB

Engaging Consumers in the Right Moment

Gail Hillebrand, Associate Director, Consumer Education and Engagement, CFPB

Plenary Panel: Protecting Consumers

Moderator: Gail Hillebrand

• Patrice Ficklin, Assistant Director, Office of Fair Lending and Equal 

Opportunity

• Kent Markus, Assistant Director, Enforcement

• Scott Pluta, Assistant Director, Consumer Response

• Alice Hrdy, Acting Deputy Assistant Director, Office of Supervision Policy
79 CONSUMER FINANCIAL PROTECTION BUREAU

2:45 – 3:00 INTRODUCTION TO THEMES OF THE CONVENING

EMPOWERMENT: OUR VISION, OUR STRATEGIES

Cliff Rosenthal

3:00 – 4:00 PLENARY PANEL: SEEKING SCALE: WHAT WE MEAN AND HOW WE GET 

THERE

Moderator: Lisa Mensah, Executive Director, Initiative on Financial Security, 

Aspen Institute

• Melissa Koide, Deputy Assistant Secretar, Office of Consumer Policy, U.S. 

Department of the Treasury 

• Andrea Levere, President, CFED

• José Cisneros, Treasurer, City and County of San Francisco;

• Bob Annibale, Global Director, Citi Community Development & 

Microfinance

4:00 – 4:15 BREAK

4:15 – 5:15 PLENARY PANEL: FINANCIAL INCLUSION: BROADENING THE 

DISCUSSION

Moderator: Deyanira Del Rio, Associate Director, Neighborhood Economic 

Development Advocacy Project

• Sarah Dewees, Sr. Director of Research, Policy and Asset-Building 

Programs, First Nations Development Institute 

• Joyce Moy, Executive Director, /Asian American / Asian Research 

Institute, City University of New York

• Johnette Hartnett, Director Strategy and Research, National Disability 

Institute

• Dedrick Muhammed, Executive Director, Financial Freedom Center, 

NAACP

5:15 – 6:00 CLOSING SESSION: FINANCIAL EMERGENCY PREPAREDNESS

• Dan Rutherford, Senior Content Specialist, Office of Financial Education, 

CFPB
80 CONSUMER FINANCIAL PROTECTION BUREAU

• Cassandra McConnell, Deputy Assistant Director, Office of Financial 

Education, CFPB

• John Hope Bryant, CEO and Founder, Operation HOPE and HOPE 

Coalition America

November 29, 2012

CFPB Headquarters, 1700 G Street NW, Washington DC

8:00 BREAKFAST AMPITHEATER

8:45-9:00 OPENING REMARKS – RICHARD CORDRAY, DIRECTOR, CFPB

Introduction, Gail Hillebrand

9:00 -10:00 ACCESS TO FINANCIAL INSTITUTIONS FOR LOW-INCOME CONSUMERS: 

LANDSCAPE AND TRENDS

Moderator: Cliff Rosenthal, Assistant Director, Office of Financial 

Empowerment, CFPB 

• Jonathan Miller, Deputy Director for Policy and Research, Division of 

Depositor and Consumer Protection, FDIC 

• Barry Wides, Deputy Comptroller for Community Affairs, Office of the 

Comptroller of the Currency

• Allen Fishbein, Associate Director, Consumer & Community Affairs 

Division, Federal Reserve Board

• Bill Myers, Director, Office of Small CU Initiatives, National Credit Union 

Administration

• Jodie Harris, Senior Advisor, The CDFI Fund, U.S. Department of the 

Treasury
81 CONSUMER FINANCIAL PROTECTION BUREAU

10:00-10:15 BREAKOUT SESSIONS OVERVIEW: INTRODUCTION AND EXPECTATIONS

10:30-12:00 WORKING GROUPS

Track 1: Access: Innovative Access to Transaction Accounts and Services: Reaching 

People Where They Are

Moderator: Rachel Schneider, CFSI

• Laura Castro de Cortes, Vice President of Alternative Financial Services, 

Centris Credit Union 

• Patrick Adams, President/CEO, St. Louis Community Credit Union 

• Cecilia Frew, Senior Vice President, PNC SmartAccess 

• Laura Kelly, Senior Vice President, American Express

Track 2: Data Data Collection: Barriers and Incentives

Moderator: Camille Busette, Assistant Director of Office of Financial Education, 

CFPB

• Kevin Jordan, Vice-President, National Programs, LISC 

• Jessica Anders, Research and Evaluation Manager, Success Measures, 

NeighborWorks 

• Kim Manturuk, Senior Research Associate in Financial Services, UNC 

Center for Community CapitalKate McKee, Senior Adviser, CGAP, World 

Bank

Track 3: Pathways to Scale: Integration as a Path to Scale: Case Studies

Moderator: Annika Little, Strategic Program Manager, 

• Mae Watson Grote, Executive Director, Financial Clinic 

• Mary Dupont, Director of Financial Empowerment, State of Delaware 

• Michal Grinstein-Weiss, Associate Director, Center for Social 

Development, Turbo Tax PiloJoanna Smith-Ramani, Director of Strategy, 

D2D Savings

12:00- 1:15 LUNCH PLENARY SESSION: INTEGRATING FINANCIAL EMPOWERMENT: 

OPPORTUNITIES AND CHALLENGES AT THE FEDERAL LEVEL

Moderator: Jonathan Mintz, Commissioner of Consumer Affairs, New York City
82 CONSUMER FINANCIAL PROTECTION BUREAU

• Mark Greenberg, Deputy Assistant Secretary for Policy, U.S. Department 

of Health and Human Services

• Kathy Martinez, Office of Disability Employment Policy, Assistant 

Secretary, U.S. Department of Labor 

• Louisa Quittman, Director of the Office of Financial Education, Office of 

Consumer Policy, U.S. Department. of the Treasury

1:30 - 3:00 WORKING GROUPS (CONT’D)

Track 1: Access: Focus on Credit 

Moderator: Corey Stone, Assistant Director, Office of Credit Information, 

Collections, and Deposits Markets, CFPB

• Vikki Frank, Executive Director, Credit Builders Alliance

• Paul Panichelli, Principal Scientist, Scoring Analytics, FICO

• Anna Steiger, Director of Community Development, Federal Reserve Bank 

of Boston

• Odysseas Papadimitriou, CEO & Founder, Evolution Finance, Inc.

Moderated Discussion

Track 2: Data (cont’d) 

Toward National Standards for Data Collection – Barriers, Incentives, and the 

Role of Federal Government

Moderator-led working group

Track 3: Scale Initiatives (cont’d) 

What is Needed to Take an Initiative to Scale

Moderator-led working group

3:15- 4:00 WORKING GROUPS PRESENT REPORTS & WRAP-UP

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