JULY 2019

U . S . D E P A R T M E N T O F T H E T R E A S U R Y 

Federal Financial Literacy Reform

Coordinating and Improving

Financial Literacy Efforts
THE

D

EPARTMENT OF THE TREA

S

URY

1789
U . S . D E P A R T M E N T O F T H E T R E A S U R Y 

Steven T. Mnuchin

Secretary

Jovita Carranza

Treasurer of the United States

Federal Financial Literacy Reform

Coordinating and Improving

Financial Literacy Efforts
Staff Acknowledgments

Secretary Mnuchin and Treasurer Carranza would like to thank Treasury staff members for their contributions to this report. The staff ’s work on the report was led by 

Christopher Weaver and Louisa Quittman, and included contributions from James Gatz, 

William Girardo, Danielle Johnson-Kutch, Kelsey Kats, Nancy Montoya, Chris Soares 

and Neal Stolleman. 
Table of Contents iii

Table of Contents

Executive Summary 1

Introduction 1

The Scope of This Report 3

Review of the Process for This Report 3

Summary of Issues and Recommendations 3

Section 1:

Governance of Federal Financial Literacy

and Education Efforts 12

Introduction 12

Federal Role in Financial Literacy and Education 13

Leadership and Accountability for

Federal Financial Literacy and Education 15

Coordination of FLEC Efforts 17

Section 2:

Coordination of Programs and Policy Proposals

for High Impact 18

Introduction 18

Basic Financial Capability 18

Access to Financial Services 20

Saving and Credit 25

Retirement Savings and Investor Education 30

Housing Counseling 37

Postsecondary Education 42

Military 48

Other Areas for Coordination 52

Websites and Outreach 52

Research Agenda 52

Budget and Allocation of Resources 53
iv Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Section 3:

Best Practices for Delivery of Financial Literacy

and Education 54

Introduction 54

Know the Individuals and Families to be Served 54

Provide Actionable, Relevant, and Timely Information 55

Improve Key Financial Skills 55

Build on Motivation 56

Make It Easy to Make Good Decisions and Follow Through 56

Develop Standards for Professional Educators 56

Provide Ongoing Support 57

Evaluate for Impact 58

Section 4:

Technology and the Future of Financial Education 60

Exhibits 62

Exhibit A: Participants in the Engagement Process 62

Exhibit B: Summary of Recommendations 66

Exhibit C: Proposed Sample Outcome Measures 74
Executive Summary 1

Executive Summary

1. Financial literacy, as used in this report, describes the skills, knowledge and tools that equip people to make individual financial 

decisions and actions to attain their goals; this may also be known as financial capability, especially when paired with access to 

financial products and services. Financial education is the process by which people gain this information, skills, confidence and 

motivation to act, through various means, including classroom education, but also one-on-one, technology-based interventions, 

and self–study. 

2. U.S. Government Accountability Office, “Financial Literacy: Overlap of Programs Suggests There May Be Opportunities 

for Consolidation”, Report to Congressional Committees, GAO-12-588, July 2012, available at https://www.gao.gov/

assets/600/592849.pdf. A 2014 GAO testimony said: “Because of the crosscutting nature of financial literacy, it would be difficult, 

if not impossible, for one agency alone to address the issue, but coordination among agencies is clearly essential.” Cackley, Alicia 

Puente, “Financial Literacy: Overview of Federal Activities, Programs, and Challenges”, Testimony Before the Subcommittee on 

Financial Institutions and Consumer Credit, House Committee on Financial Services, U.S. Government Accountability Office, 

April, 2014, GAO-14-556T, available at: https://www.gao.gov/assets/670/662833.pdf.

3. Consumer Financial Protection Bureau, “Navigating the Market: A comparison of spending on financial education and financial 

marketing,” November 18, 2013, available at: https://files.consumerfinance.gov/f/201311_cfpb_navigating-the-market-final.pdf. 

4. 20 U.S.C. § 9702(b).

Introduction

The federal government spends an estimated $273 million annually on financial literacy1

 and education programs and activities across 23 federal agencies and entities. 

These programs are designed to educate Americans about a wide array of financial 

literacy and education topics. However, in 2012, the Government Accountability 

Office (GAO) issued a report (GAO Report) that found that federal financial literacy efforts lacked meaningful coordination with multiple programs with similar goals 

and activities.2 Furthermore, very few federal agencies appear to monitor the effectiveness of their programs and only a handful of these programs have been formally 

assessed or evaluated for impact. 

Many non-federal organizations also provide financial literacy services and resources, 

including nonprofit organizations, consumer advocacy organizations, financial services companies, employers, educational institutions, and state and local governments. 

In 2013, the Consumer Financial Protection Bureau (CFPB) estimated that the public and private sector spends approximately $670 million on financial education, with 

non-federal government entities accounting for almost two-thirds of that amount.3

To coordinate the federal government’s financial literacy efforts, the Financial Literacy 

and Education Commission (FLEC) was established by law in 2003. The FLEC is 

made up of the heads of 22 federal agencies and the White House Domestic Policy 

Council. Chaired by the Secretary of the Treasury, the FLEC is tasked with improving “the financial literacy and education of persons in the United States through the 

development of a national strategy” that promotes participation by the public and 

private sectors.4 However, the FLEC has historically acted as an information-sharing body among federal agencies with limited success advancing a national strategy 

to promote access to quality financial education for all Americans.
2 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

The Department of the Treasury (Treasury) prepared this report, in part in response to 

the June 2018 plan by the Office of Management and Budget (OMB) to reform and 

reorganize the executive branch entitled “Delivering Government Solutions in the 

21st Century” (OMB report).5 The OMB report included a proposal requesting that 

Treasury develop recommendations for consolidating and streamlining federal financial literacy and education activities (OMB Proposal). The OMB Proposal was part 

of a comprehensive plan for reorganizing the executive branch set forth by President 

Donald J. Trump in Executive Order 13781 on March 13, 2017.6 The President’s 

Executive Order outlined his vision for improving the “efficiency, effectiveness, and 

accountability of the executive branch” by directing the Director of the OMB to “propose a plan to reorganize governmental functions and eliminate unnecessary agencies... components of agencies, and agency programs.” The recommendations in this 

report are also in response to the GAO Report, which recommended that Treasury 

identify options to consolidate federal financial literacy efforts and address an appropriate allocation of resources among programs and agencies.7

Concurrently with the OMB report, Secretary Mnuchin asked the Treasurer of the 

United States to review the work of the FLEC, and make recommendations for 

aligning its mission and activities with the core principles set forth by the President 

in Executive Order 13772, including to “empower Americans to make independent 

financial decisions and informed choices in the marketplace, save for retirement, and 

build individual wealth” (First Core Principle).8 This report provides Treasury’s proposed recommendations to better align the FLEC’s work with the President’s core 

principles while streamlining and strengthening the federal investments in this area.

This report does not contain recommendations for statutory changes or other 

Congressional action. Accordingly, the recommendations contained herein should 

not be understood to modify or constrain the statutory authorities or responsibilities 

of FLEC members or other government agencies.9 Administrative action alone, however, will not be sufficient to completely reduce overlapping and unnecessary activities. 

Congress may need to address these issues through appropriations, revising agency 

requirements, and considering existing agency functions as it considers new financial education tasks. 

5. Office of Management and Budget, “Delivering Government Solutions in the 21st Century: Reform Plan and Reorganization 

Recommendations,” June 2018, available at: https://www.whitehouse.gov/wp-content/uploads/2018/06/Government-Reform-andReorg-Plan.pdf.

6. “Comprehensive Plan for Reorganizing the Executive Branch” Executive Order 13781, March 13, 2017, available at: https://www.

federalregister.gov/documents/2017/03/16/2017-05399/comprehensive-plan-for-reorganizing-the-executive-branch.

7. GAO, July 2012. 

8. “Presidential Executive Order on Core Principles for Regulating the United States Financial System”, 

Executive Order 13772, February 3, 2017, available at: https://www.whitehouse.gov/presidential-actions/

presidential-executive-order-core-principles-regulating-united-states-financial-system/.

9. For example, the Consumer Financial Protection Bureau (CFPB), is required to establish Offices of Financial Education, 

Community Affairs, Service Member Affairs, and Older Americans, and is directed by Congress to develop strategies, establish 

metrics, conduct research, issue reports, provide guidance and technical assistance, and carry out other activities relating to 

financial education and literacy, both in general and with respect to specific identified populations. 
Executive Summary 3

The Scope of This Report

The scope of this report addresses the issues, requirements, recommendations, and 

other items raised in the OMB proposal, the GAO Report, and the First Core 

Principle.

Review of the Process for This Report

For this report on financial literacy and education, Treasury consulted extensively with 

a wide range of stakeholders, including academics, nonprofit financial education providers, private sector financial services firms, state and local governments, and others 

with relevant knowledge. Treasury also reviewed a wide range of data, research, and 

published material from both public and private sector sources. Additionally, Treasury, 

with the assistance of OMB, collected information on current and proposed activities 

and performance measures from FLEC member agencies, and asked member agencies to self-assess their activities based on factors including the degree of targeting and 

responsiveness to its audience, evidence of effectiveness, sustainability and innovation. 

Member agencies also answered questions and provided insights into their activities. 

Treasury incorporated the widest possible range of perspectives in evaluating 

approaches to financial literacy and education. A list of organizations and individuals who provided input to Treasury in connection with the preparation of this report 

is set forth as Exhibit A and is followed by a summary of the report’s recommendations in Exhibit B.

Summary of Issues and Recommendations

Treasury’s recommendations in this report can be summarized in the following four 

categories:

• A governance structure, as permitted by the FLEC’s enabling statute, for federal 

financial literacy efforts that articulates the proper role of government, and 

where possible, avoids duplicative activities, and leverages the work of nonprofit 

organizations, the private sector and state and local government. 

• Coordination of existing federal financial literacy and education programs and 

policy proposals for basic financial capability (including access to financial services, 

saving and credit), retirement savings and investor education, housing counseling, 

postsecondary education, and military and their families. 

• Identification of best practices and potential metrics for evidence-based, effective 

financial education programs that will allow responsible agencies to consider 

elimination or modification of programs that do not lead to greater financial 

capability and changes in financial behavior.

• Identification of the future challenges and opportunities associated with technology 

and financial education.
4 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Governance of Federal Financial Literacy and Education Efforts

To coordinate the federal government’s financial literacy efforts, the FLEC was established by law in 2003 and is made up of the heads of 22 federal agencies and the 

White House Domestic Policy Council. However, the FLEC lacks a clear vision of 

the role of the federal government in financial literacy and education and an effective 

organizational structure to facilitate goal-setting and decision-making. In addition, 

although a majority of financial literacy and education is provided by entities outside 

of the federal government, the FLEC has not formally collaborated and communicated with non-federal entities and intermediaries who provide financial education. 

Treasury recommends that the primary federal role for financial literacy and education should be to empower financial education providers as opposed to trying to 

directly reach every American household. This federal role could include developing 

and implementing policy, encouraging research, and other activities, including conducting financial education programs, and developing educational resources as needed 

to advance best practices and standards to equip Americans with the skills, knowledge, and tools to confidently make informed financial decisions and improve their 

financial well-being. The federal government should also consider the impact of the 

lack of financial literacy on households and the risk to the economy from negative 

externalities and market failures. 

In order to advance the federal role in financial literacy and education, Treasury also 

recommends that the FLEC establish bylaws to set clear expectations for FLEC decision-making and roles, including establishing a six-member Executive Committee 

and working groups focused on basic financial capability, retirement savings and investor education, housing counseling, postsecondary education, and the military community. The Executive Committee will be responsible for crafting, with input from 

other FLEC members, a shared agenda for action and priorities, and be accountable 

to report on achieving that agenda. 

Coordination of Programs and Proposals for High Impact

Treasury is proposing a number of coordination recommendations related to the key 

areas of financial activity and decision-making, including:

Basic Financial Capability 

The FLEC and member agencies have activities that address basic financial capability 

activities on a range of topics, including access to financial services, saving and credit. In 

some cases these activities are duplicative or could be better coordinated. Although the 

Dodd-Frank Act established the onsumer Financial Protection Bureau (CFPB) Office 

of Financial Education, the law does not address the consolidation of existing programs 

and the authority of the various agencies engaged in this area. However, the Dodd-Frank 

Act does require the CFPB Office of Financial Education to “develop and implement 

a strategy to improve the financial literacy of consumers that includes measurable goals 
Executive Summary 5

and objectives, in consultation with the Financial Literacy and Education Commission, 

consistent with the National Strategy for Financial Literacy.”10

Treasury recommends that the CFPB serve as the primary federal agency responsible for programs and initiatives related to basic financial capability. The CFPB in its 

lead role would have the responsibility for coordinating the FLEC’s activities related 

to basic financial capability as well as adopting metrics to measure the impact of these 

efforts.

Treasury recommends that FLEC designate the Money Smart curriculum and the 

Your Money, Your Goals program as the core resources for use by federal agencies with 

initiatives targeted to civilians, and that the CFPB and Federal Deposit Insurance 

Corporation (FDIC) collaborate to align recommended uses of the Your Money, 

Your Goals Toolkit and the Money Smart curriculum to create a comprehensive set 

of materials to be considered the core federal financial education product for adults, 

especially low-income adults. 

Access to Financial Services

An inclusive banking system is important to expanding access for American households to safe, secure, and affordable financial services. However, a significant percentage of Americans conduct some or all of their financial transactions outside of 

the mainstream banking system. In 2017, 6.5 percent of U.S. households (8.4 million) were “unbanked,” meaning no one in the household had a checking or savings 

account, while 18.7 percent of U.S. households (24.2 million) were “underbanked” 

because they relied on products from a nonbank alternative financial services provider in the past 12 months.11

Some of the reasons cited by households for being unbanked, including lack of trust 

and concerns with privacy, may have a connection to a lack of financial literacy and 

education. However, unbanked consumers sometimes are unable to access banking 

services because of negative information in bank account screening consumer reporting agencies (“account screening CRAs”). Some state and local governments have 

established public-private partnerships to work with banks and credit unions to offer 

low-cost “second chance accounts” for consumers who have been rejected due to a 

negative history with an account screening CRA. 

Treasury recommends that financial institutions and educators incorporate into their 

curricula and programs information about account screening CRAs. The curricula 

and programs should discuss how account screening CRAs are a potential barrier to 

accessing the banking system, ways to avoid negative information on bank account 

screening reports, and the dispute process to resolve incorrect information. Treasury 

10. Dodd-Frank Act §1013(d)(2); 20 U.S.C. §§ 9702(c)(1)(C).

11. Federal Deposit Insurance Corporation (FDIC), “FDIC National Survey of Unbanked and Underbanked Households”, 2017, 

available at: https://www.fdic.gov/householdsurvey/2017/2017report.pdf.
6 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

also recommends that the FLEC collaborate with public-private partnerships to 

develop best practices for building financial capability by connecting consumers to 

suitable financial products and education. 

Saving and Credit

Consumers save for a wide variety of short-and long-term needs, including starting a business, paying for higher education for themselves or their children, and 

for large expenses such as the purchase, lease or repair of an automobile or home. 

Unfortunately, forty percent (40 percent) of American families do not have $400 in 

available savings to pay for unplanned or emergency expenses without borrowing or 

selling a possession.12 In order to strengthen savings, Treasury recommends employers 

pilot employer-based emergency savings programs that would be funded from automatic withdrawals from an employee’s paycheck. 

Savings are also a critical component of disaster preparedness. In 2017, Hurricanes 

Harvey, Irma, and Maria caused a combined $265 billion in damage, with at least 

three-quarters of the residential flood damage uninsured.13 According to the Federal 

Emergency Management Agency (FEMA), of the estimated $55 billion in losses 

expected annually due to natural disasters, more than half will be uninsured.14 When 

individuals, households and communities are not financially prepared for emergencies, the burden of response falls on society. 

Treasury recommends that the CFPB lead on disaster financial preparedness education content and effective delivery, especially regarding emergency savings, working closely with FEMA and other agencies on other related issues such as insurance. 

Treasury also recommends that federal, state and local disaster planning should 

include household financial preparedness and recovery as part of mitigation strategies.

Retirement Savings and Investor Education

For more than 80 years, Social Security, employer-sponsored pensions or retirement 

plans, and individual savings have represented the three main pillars of our retirement system. However, over the last 40 years, employers have shifted towards offering defined contribution plans, like 401(k)s, and away from defined benefit plans. This 

shift has placed more personal responsibility on individuals to plan for their retirement and increased the need for quality financial literacy and education. 

The primary agency responsible for educating workers and employers about workplace 

retirement plans (both pensions and defined contribution plans) is the Department 

12. Federal Reserve Board of Governors, “Report on the Economic Well-Being of U.S. Households in 2017”, May 22, 2018, available 

at: https://www.federalreserve.gov/publications/files/2017-report-economic-well-being-us-households-201805.pdf.

13. Federal Emergency Management Agency, “2017 Hurricane Season FEMA After-Action Report”, July 12, 2018, available at: 

https://www.fema.gov/media-library-data/1531743865541-d16794d43d3082544435e1471da07880/2017FEMAHurricaneAAR.pdf

14. Kanewski, Daniel, Federal Emergency Management Administration, at the Public Meeting of the Financial 

Literacy and Education Commission, October 4, 2018, available at: http://treas.yorkcast.com/webcast/

Play/18005c91af8546dfb0dc071afa8bdb2b1d?autostart=true.
Executive Summary 7

of Labor’s Employee Benefits Security Administration (DOL/EBSA). As required 

by federal law, DOL/EBSA provides information, outreach, and answers questions 

from employers and employees about all aspects of workplace retirement savings plans. 

The Department of Health and Human Services (HHS) also has a retirement program that serves primarily lower-income seniors, especially women, through a grant 

to the National Education and Resource Center on Women and Retirement. The 

HHS grant provides education, skills building and retirement planning tools particularly to low-income women to enhance their financial security in retirement. “The 

mission of the Center is to provide women with access to a one-stop gateway that 

integrates financial information and retirement planning, health, and long-term care 

resources through Older Americans Act (OAA) supported programs.”15 The impact 

of the program has not been widely measured. 

Treasury recommends that HHS and DOL/EBSA continue to collaborate on 

ensuring their resources are consumer-friendly and effective in reaching their target populations and enhance the resources of the National Education and Resource 

Center on Women and Retirement with the retirement plan resources developed 

by DOL/EBSA.

Helping Americans understand Social Security is also an important piece of the federal effort around retirement planning. The Social Security Administration (SSA) 

promotes a number of initiatives to make sure Americans understand how Social 

Security works. To ensure that Americans view Social Security as only one of the 

pillars of the retirement system, it is important that agencies coordinate with SSA 

to capitalize on opportunities to inform Americans about the other two legs of the 

stool—especially the importance of their own retirement savings.

The U.S. government comprises one of the country’s largest workforces, with approximately 2 million civilian employees dispersed across the U.S. and around the world.16

Federal employees participate in the Thrift Savings Plan (TSP), a defined contribution plan for civil service employees, retirees and some military service members. The 

Department of Defense (DoD) also provides retirement education for military service members under the Blended Retirement System (BRS). Currently, there are more 

than 500,000 service members enrolled in the BRS.17

Treasury recommends DOL serve as the lead agency responsible for programs and 

initiatives related to basic retirement saving. The DOL in its lead role would have the 

responsibility for coordinating the FLEC’s activities related to retirement saving and 

15. U.S. Department of Health and Human Services, Administration for Community Living, “National Education and Resource 

Center on Women and Retirement Planning”, webpage, available at: https://www.acl.gov/programs/retirement-planning-support/

national-education-and-resource-center-women-and-retirement-0.

16. Office of Personnel Management, “Historical Federal Workforce Tables: Executive Branch Civilian Employment Since 1940, 

Data, Analysis & Documentation,” website, available at: https://www.opm.gov/policy-data17. U.S. Department of Defense, “Defense Department Successfully Closes Blended Retirement System Opt-In Window”, 

January 14, 2019, available at: https://dod.defense.gov/News/News-Releases/News-Release-View/Article/1731168/

defense-department-successfully-closes-blended-retirement-system-opt-in-window/.
8 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

planning and investor education as well as adopting metrics to measure the impact 

of these efforts. Treasury also recommends that the Office of Personnel Management 

(OPM) and DoD coordinate with DOL to improve the quality of financial education on retirement savings and related topics provided to federal employees and military service members.

Housing Counseling

Housing counselors play a key role in helping consumers make sound decisions about 

sustainable home buying and contribute to foreclosure prevention. The Department 

of Housing and Urban Development (HUD) is the leading federal agency supporting the availability of housing counseling. Through its Housing Counseling Program 

(HCP), HUD provides grants that support a nationwide network of HUD-approved 

Housing Counseling Agencies (HCAs) and HUD-certified counselors. HUD and 

others have conducted research that shows the benefits of pre-purchase and post-purchase housing counseling. 

Treasury recommends that HUD serve as the primary federal agency responsible for 

programs and initiatives related to housing counseling. HUD in its lead role would 

have the responsibility for coordinating the FLEC’s activities related to housing issues 

as well as adopting metrics to measure the impact of these efforts. Treasury supports 

the use of online counseling, telephone hotlines, applications and other technologies 

to “meet consumers where they are” and to provide quality assistance to more people, 

in addition to face-to-face counseling. 

Resources can be better leveraged to expand the reach of housing counseling beyond 

HUD’s funding. Treasury encourages the private sector to support housing counseling for homebuyers. Treasury also recommends that HUD and affordable rental housing providers continue to integrate financial education into the services provided to 

their residents, either directly or through partnerships, as feasible.

Postsecondary Education

There are at least six agencies with programs or resources geared to youth and students, including Department of Education (ED) and CFPB. However, ED is the primary agency with responsibility for postsecondary education and student loan issues 

under the Higher Education Act. ED tracks information on its activities, including 

using website analytics such as user surveys, social media followers and the percentage 

of high school seniors who file a Free Application for Federal Student Aid (FAFSA) 

form (both the first time, and in subsequent years). On the other end of the borrowing process, ED tracks higher education institutions’ cohort default rates (measuring 

the success of students in loan repayment). 

While ED and CFPB have resources available, helping students and their families 

avoid the pitfalls associated with financing higher education should also be a priority for institutions of higher education. The cost of higher education can be difficult to understand due to the lack of consistency and transparency and the inherent 
Executive Summary 9

challenge to comprehend long-term implications of borrowing. The difficulty may be 

compounded due to lack of relevant, transparent, and timely information. Notably, 

financial aid offer letters (sometimes known as award letters) and annual debt notification letters (debt letters) are effective tools in communicating an individual’s cost of 

college and financing options, so that students and families are empowered to make 

comprehensive and informed decisions. 

Treasury recommends that ED serve as the primary federal agency responsible for 

programs and initiatives related to higher education. ED in its lead role would have 

the responsibility for coordinating the FLEC’s activities related to postsecondary education as well as adopting metrics for measuring impact of these activities. 

Treasury also recommends that institutions of higher education adopt best practices 

to ensure that their financial aid offer letters are clear, timely, and customized, and 

provide students with a clear sense of their investment and borrowing obligations. 

Further, institutions of higher education should provide students with annual debt 

letters, to ensure that students have a clear sense of their total borrowing obligations. 

State lawmakers should consider broader adoption of debt letters to improve students’ 

comprehension of their future financial debt burden. 

The FLEC has released additional recommendations and best practices for institutions of higher education in a report required by Title VI, section 603, of the Economic 

Growth, Regulatory Relief, and Consumer Protection Act.18

Military 

Both DoD and Department of Veterans Affairs (VA) provide customized education 

and assistance at key times and places for their audience, and focus on delivering service through trusted providers who are trained and familiar to their audience. Each 

of the military services have developed, or are currently developing, financial literacy curricula for training their members. Further, they collaborate with other federal departments and agencies on a number of financial literacy efforts. For example, 

the Transition Assistance Program ensures a transition for the estimated 200,000 

people a year who transition from military to civilian life. In addition to DoD and 

VA programs, a number of other agencies also report activities to serve the military 

community. 

Treasury recommends DoD lead the financial education activities focused on Service 

members and their families. Other agencies should increase their coordination with 

DoD with an intent to find opportunities for improvement through integrating 

through DoD’s Financial Readiness Network or other appropriate channels. Treasury 

also recommends that DoD consider how to reduce, consolidate or eliminate seemingly duplicative financial education activities among the military services, including 

18. Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, Pub. L. No. 115-174, 132 Stat. 1296 (2018), 

section 603 as codified at 20 U.S.C. § 9703(a)(3) available at: http://uscode.house.gov/view.xhtml?req=(title:20%20section:9703%20

edition:prelim.
10 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

duplicative curricula. The Transition Assistance Program includes close coordination 

between DoD and VA and other relevant agencies on a range of topics, including 

financial knowledge. This coordination should continue, and draw on other members of the FLEC for subject matter expertise as needed, such as the Securities and 

Exchange Commission (SEC) and CFPB. 

Websites and Outreach

Currently federal agencies have more than 40 public-facing websites on financial education topics, resulting in a fragmented and confusing system for providing information to the public. Agencies also promote their financial education activities through 

public events, social media, and in partnership with organizations, state and local 

governments and others. While serving different audiences with similar content, or 

providing overlapping audiences with agency-specific content and information may 

sometimes be necessary with outreach, the FLEC does not have an outreach agenda 

to ensure a shared approach that is efficient and consistent with its national strategy. 

Treasury recommends that the FLEC members collaborate to share their best educational materials for use on websites already maintained by federal agencies. The 

FLEC should also enhance its website to be a highly interactive website that includes 

the best, most consumer-friendly resources from member agencies on key topics. 

Treasury also recommends that the FLEC develop a shared outreach agenda and 

strategy so that agencies can work together to inform the public about available financial education.

Research Agenda 

A number of agencies conduct or support research to inform their programs or policies, or otherwise address national interests. Treasury recommends the FLEC develop 

and promote a shared research agenda that identifies priorities for all federally-supported research on financial literacy and education. To ensure coordination among 

FLEC agencies, Treasury recommends that each agency align their financial literacy 

research plans with FLEC’s shared agenda. Such an agenda would promote research 

supported by agencies that is responsive to, and informs, the FLEC’s priorities and is 

more efficient, by avoiding duplication of effort. 

Budget and Allocation of Resources

Treasury recommends that appropriated FLEC agencies recommend the allocation 

of resources to support the high impact areas in financial literacy, consistent with the 

Administration’s priorities. 
Executive Summary 11

Best Practices for Delivery of Financial Literacy and Education

Treasury recommends the adoption by financial education providers of the CFPB’s 

“Five Principles of Effective Financial Education,” which include:

• Know the Individuals and Families to be Served. Financial education, information 

and delivery methods must be tailored to the circumstances and needs of the user. 

• Provide Actionable, Relevant, and Timely Information. Financial information 

that is delivered in an actionable, relevant, and timely manner results in greater 

likelihood of retention and action. 

• Improve Key Financial Skills. Financial literacy and education can be more 

effective when they help develop skills, rather than transmitting knowledge of 

particular facts about financial products and services. 

• Build on Motivation. Effective financial literacy and education programs capitalize 

on people’s motivations. 

• Make It Easy to Make Good Decisions and Follow Through. The environment 

or context can make it easier for people to carry out their intentions. For example, 

changing the options presented, removing hassles and barriers, and adding supports 

can help people bridge the gap between intentions and actions. 

Treasury also recommends the adoption by financial education providers of three 

additional best practices based on Treasury’s outreach to stakeholders. 

• Develop Standards for Professional Educators. Financial literacy and education 

providers should demonstrate a high level of quality, including knowledge of the 

content and how to deliver it effectively. 

• Provide Ongoing Support. Financial literacy and education should provide 

ongoing support, including one-on-one financial coaching. 

• Evaluate for Impact. Financial literacy and education providers should evaluate 

their programs for impact and develop a culture of continuous improvement by 

establishing methodologies, procedures, reporting and metrics for measuring 

program effectiveness. 
12 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Section 1:

19. 20 U.S.C. § 9702(a). 

20. 20 U.S.C. § 9702(c).

21. 20 U.S.C § 9702 (c)(1)(D) states that the FLEC shall also include, “at the discretion of the President, not more than 5 individuals 

appointed by the President from among the administrative heads of any other Federal agencies, departments, or other Federal 

Government entities, whom the President determines to be engaged in a serious effort to improve financial literacy and 

education.”

22. Pub. L. No. 111-203, 124 Stat. 1376-2223 (2010).

23. Dodd-Frank Act §1013(d)(5),(6); 20 U.S.C. §§ 9702(c)(1)(C),(d).

24. Financial Literacy and Education Commission (FLEC), “National Strategy for Financial Literacy: Taking Ownership of 

the Future”, 2006, available at: https://www.treasury.gov/about/organizational-structure/offices/Domestic-Finance/Documents/

Strategyeng.pdf; Financial Literacy and Education Commission, “Promoting Financial Success in the United States: National 

Strategy for Financial Literacy 2011”, available at: https://www.treasury.gov/resource-center/financial-education/Documents/

NationalStrategyBook_12310%20(2).pdf; 

25. Financial Literacy and Education Commission, “Promoting Financial Success in the United States: National Strategy for 

Financial Literacy 2016 Update,” available at: https://www.treasury.gov/resource-center/financial-education/Documents/National%20

Strategy%202016%20Update.pdf. 

Governance of Federal Financial 

Literacy and Education Efforts

Introduction

The FLEC was established in 2003 pursuant to the Financial Literacy and Education 

Improvement Act19 (FLEC statute) to improve the financial literacy and education of 

persons in the United States by coordinating numerous federal programs that already 

existed as well as leveraging the resources of non-federal government entities. The 

statute named the Secretary of the Treasury as Chair of the FLEC, and named 19 

other agencies as members.20 Over the last decade, one member agency was absorbed 

into another (the Office of Thrift Supervision into the Office of the Comptroller of 

the Currency), and three additional members were added by the President, as permitted by the FLEC statute.21 The Dodd-Frank Wall Street Reform and Consumer 

Protection Act (Dodd-Frank Act),22 which created the CFPB, also added the CFPB 

to the FLEC and named its Director as FLEC Vice Chair.23 However, neither the 

original FLEC statute nor the Dodd-Frank Act provided clear roles for FLEC leadership and its members. 

The FLEC statute requires the FLEC to create a national strategy for financial literacy and education, and the FLEC produced national strategies in 2006 and 201124

(updated in 2016).25 The FLEC has historically been primarily an information-sharing body among federal agencies and a forum to facilitate informal interagency 

collaboration. To date, many FLEC agencies have separately developed programs 

and activities based on agency mandates, Congressional requirements, or their own 

agency interpretations of their functions. Thus, many of the existing federal activities lack meaningful coordination and sometimes may be overlapping or duplicative. 
Section 1: Governance of Federal Financial Literacy and Education Efforts 13

Furthermore, the impact and effectiveness of these activities have generally not been 

measured, since very few agencies monitor the impact of their programs on changes 

in financial decision-making. 

Federal agencies are just one part of the larger ecosystem interested in promoting 

financial education for Americans. Many private sector entities, including financial 

service providers and employers, state, tribal and local leaders, community and faithbased organizations, and educators at all levels are focused on improving Americans’ 

financial outcomes. Similar to the federal government, financial education programs 

in the nonprofit and private sector are fragmented with highly variable quality and 

lack of assessment of outcomes.

In some cases, different federal agencies interact closely with specific players in the 

ecosystem. A number of agencies provide funding to state and local governments and 

nonprofit organizations, which can be used, in part, to support local financial education initiatives. These collaborations are critical for achieving outcomes in our large 

and diverse nation. The GAO noted in 2014 that “given the wide array of state, local, 

nonprofit, and private organizations providing financial literacy programs, it is essential to leverage private-sector resources and coordinate federal activities with resources 

at the community level.”26 To date, the FLEC has not formally coordinated with entities outside of the federal government. 

Federal Role in Financial Literacy and Education

A lack of information is sometimes the cause of poor financial decisions. When one 

party has more information than the other party, economists describe this imbalance 

as “asymmetric information.” In the market for financial services, where the provider often knows more about the product, there is a potential risk to the consumer 

and the economy. Financial education is a tool for helping individuals manage and 

mitigate risk. Individuals who are better financially prepared can avoid unexpected 

expenses, steer away from frauds and scams, and avoid taking on risks that they do 

not understand or cannot afford to bear. By improving financial literacy and education, the federal government can play an important role in facilitating a vibrant and 

efficient marketplace, which in turn empowers individuals to make informed financial decisions. 

In supporting financial literacy and education, the government can create positive 

spillovers (or positive externalities) from a more financially literate population. A more 

informed population tends to be more productive and thus boosts economic activity. 

A stronger economy can result in more jobs and higher wages for others. 

Financial education can also help avoid negative spillovers (or negative externalities) from a less financially literate population. A negative externality is an economic 

26. GAO, April 2014.
14 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

activity that imposes a cost or negative impact on an unrelated third party. These negative externalities cause inefficiencies in the market.27 For example, when a borrower 

with low financial literacy defaults on an ill-advised loan, the lender will bear some 

of these costs. On the other hand, friends and family members, the government and 

others may also bear the cost of that decision. Family members may directly help pay 

off a loan, or cosign on future loans, increasing their own debt-to-income ratios. Thus, 

the original two parties to the loan do not bear the entire cost of the transaction. 

The financial crisis of 2007-2008 demonstrated how individuals and families with 

limited financial literacy can be among those most dramatically affected by downturns 

in the economy. Since Treasury’s mission includes a mandate to maintain a strong 

economy “by promoting the conditions that enable economic growth and stability at 

home and abroad,”28 it is important to keep in mind the role that individual financial 

capability has in the prosperity and financial health of the nation. 

The federal government cannot, and should not, bear the sole responsibility for ensuring the financial capability of individuals and households. Since the creation of the 

FLEC, it has been clear that federal agencies are not solely, or even predominantly, 

responsible for providing financial education to Americans. State and local governments, nonprofits and the private sector rightly have interests in promoting better 

financial decision-making. For example, some employers view financial health similar to physical health and include this as part of their benefits package because of its 

impact on their bottom line. These non-government entities are able to respond to 

needs more quickly, develop customized strategies to deliver financial education, and 

remain engaged and follow up with those served over time. 

Given the substantial accomplishments and opportunities for improved financial education provided by various stakeholders outside of the federal government, it is appropriate to consider the suitable federal role. Treasury’s outreach to stakeholders has 

revealed the desire for the federal government to play an overarching leadership and 

guidance role, rather than trying to directly reach all Americans with financial education lessons. By embracing this role, the federal government can improve the quality 

and reach of financial education activities by promoting best practices, sharing evidence, creating specific resources where appropriate, and deploying policy solutions 

to support the U.S. financial education infrastructure. The federal government, then, 

can be a partner, a source of trusted information and tools, and a leader to the many 

financial education providers striving to improve financial literacy and capability of 

their nation.

27. See, for example: Hastings, Justine S., Madrian, Brigitte C. and Skimmyhorn,William L. “Financial Literacy, Financial 

Education and Economic Outcomes,” Annu Rev Econom. 2013 May 1; 5: 347–373, 2013, available at: https://dx.doi.

org/10.1146%2Fannurev-economics-082312-125807; Lusardi, Annamaria and Mitchell, Olivia S. “The Economic Importance of 

Financial Literacy: Theory and Evidence”, Journal of Economic Literature 2014, 52(1), 5-44, 2014, available at: https://www.

aeaweb.org/articles?id=10.1257/jel.52.1.5.

28. U.S. Department of the Treasury, “Role of the Treasury”, webpage, available at: https://home.treasury.gov/about/general-information/

role-of-the-treasury.
Section 1: Governance of Federal Financial Literacy and Education Efforts 15

Recommendation

Treasury recommends that the primary federal role for financial literacy and education should be to empower financial education providers as opposed to trying to 

directly reach every American household. This federal role could include developing 

and implementing policy, encouraging research, and other activities, including conducting financial education programs, and developing educational resources as needed 

to advance best practices and standards to equip Americans with the skills, knowledge, and tools to confidently make informed financial decisions and improve their 

financial well-being. The federal government should also consider the impact of the 

lack of financial literacy on households and the risk to the economy from negative 

externalities and market failures. Financial literacy and education should be seen as a 

vehicle to guard against market failures and foster competitive markets. 

Leadership and Accountability for Federal 

Financial Literacy and Education

The FLEC’s structure and operations have been informal, with the Treasury providing staff support and management, including organizing public meetings, scheduling informal briefings, and managing reports to Congress and the public. While it 

is clear that there is an important federal role in financial education, the structure of 

financial education across the federal government has not been conducive to both 

attaining measurable outcomes and coordinating activities in order to maximize the 

government’s return on investment. As noted by the OMB Report and the GAO 

report, financial education activities exist in many different agencies, often without a 

requirement that they use or build on programs or resources already paid for by taxpayers. Congress created the FLEC with a purpose to coordinate these activities, yet 

the authorities of the FLEC, as well as its structure, do not provide it with the ability to hold members accountable for coordination, efficiency or outcomes. As GAO 

noted, “We acknowledge that the governance structure of the Commission presents 

challenges in addressing resource issues: it relies on the consensus of multiple agencies, has no independent budget, and no legal authority to compel members to act.”29

The FLEC’s lack of clear decision-making processes and defined roles and responsibilities has impeded its ability to effectively carry out its national strategy for financial literacy, and its statutory mandates of both improving financial education, and 

streamlining and improving federal financial education activities. As a result, the 

FLEC lacks an effective organizational structure to facilitate goal-setting and decision-making and accountability for outcomes. A more clear and focused leadership 

structure is needed to guide the work of the FLEC.

In addition to structural impediments to coordination, performance and outcome 

data have not been used systematically to assess the effectiveness of federal activities 

29. GAO, April 2014.
16 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

and provide a basis to streamline, augment or improve them. Outcomes should reflect 

the ability of Americans to attain improved financial decision-making as opposed 

to being activity driven. The GAO has noted that “financial literacy program evaluations are most reliable and effective when they measure the programs’ impact on 

consumers’ behavior.”30 By adopting measures that member agencies directly impact 

(performance measures), and indirectly affect (outcome measures), the FLEC will be 

able to better assess the effectiveness of financial education activities and thus make 

improvements in the future. 

Recommendations

Treasury recommends the FLEC establish bylaws to set clear expectations for its decision-making and roles, including establishing a six-member Executive Committee 

comprised of Treasury (chair), CFPB (vice chair), and ED, HUD, DOL and DoD. 

The Executive Committee will be responsible for crafting, with input from other 

FLEC members, a shared agenda for action and priorities, and be accountable to 

report on achievement of that agenda. The agenda would be voted on and approved 

by a majority of the members. 

To ensure the FLEC is accountable for the agenda and improving Americans’ financial decision-making, Treasury recommends the Executive Committee develop and 

implement outcome measures for federal financial education activities. These measures, and the actions toward attaining them, would be reported in the FLEC’s report 

to Congress31 and used to recommend future actions. Exhibit C includes potential 

outcome measures recommended by Treasury. 

Finally, Treasury recommends all other FLEC members would provide information 

and input to the FLEC Executive Committee and serve on one or more working 

groups (below) based on their areas of expertise. 

Treasury also recommends that the FLEC form the following five working groups, 

with the member of the Executive Committee identified below leading each working group by taking responsibility for developing an agenda for programs, research 

and outreach: 

• Basic Financial Capability (CFPB)

• Retirement Savings and Investor Education (DOL) 

• Housing Counseling (HUD)

• Postsecondary Education (ED)

• Military (DoD) 

30. GAO, July 2012.

31. 20 U.S.C. §9703(h).
Section 1: Governance of Federal Financial Literacy and Education Efforts 17

Coordination of FLEC Efforts

The majority of financial literacy and education is provided by entities outside of the 

federal government. As a result, the FLEC statute requires the Commission to “take 

such steps as are necessary to coordinate and promote financial literacy and education efforts at the State and local level, including promoting partnerships among 

Federal, State, and local governments, nonprofit organizations, and private enterprises.”32 However, the FLEC has not had a formal mechanism for collaboration and 

communication with entities and intermediaries who provide financial education. This 

type of collaboration and communication is necessary to leverage these non-government resources. 

Recommendations 

Treasury recommends that the FLEC should determine a structure to liaise in a more 

consistent and ongoing way with intermediaries or populations that are critical to 

financial education, such as: 

• State, tribal and local governments

• Nonprofit organizations

• Employers 

• Financial institutions and financial services industry

• Federal Reserve Banks and Federal Home Loan Banks and Government Sponsored 

Enterprises (GSEs)

• Youth and families and state and local education agencies

• Older Americans

• People with disabilities 

• Low and moderate-income individuals 

• Minority populations

32. 20 U.S.C. § 9703(e).
18 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Section 2:

33. 20 U.S.C. § 9703(a)(2).

34. These activities include access to financial counseling; information to assist in the evaluation of credit products and credit histories 

and scores; savings, borrowing, and other services found at mainstream financial institutions; activities intended to prepare the 

consumer for educational expenses, reducing debt, and improving the consumer’s financial situation; assistance with long-term 

savings strategies; and wealth building and financial services to claim earned income tax credits. 12 U.S.C. § 5493(d)(2)(A)-(F). 

Coordination of Programs and 

Policy Proposals for High Impact

Introduction

Treasury is proposing a number of coordination recommendations related to the 

key areas of financial activity and decision-making that we have identified. Basic 

Financial Capability addresses basic money management and planning skills, as well 

as access to financial services, saving and credit. Housing, Retirement Savings, and 

Postsecondary Education address the primary household balance sheet items. Because 

of the importance and distinctiveness of their issues, we separately address recommendations regarding the Military community. 

In these recommendations, we define coordination activities as those recommendations that seek to improve efficiency and outcomes, by avoiding overlapping activities or sharing expertise or abilities. The coordination recommendations all propose 

a lead agency for the activity, with the understanding that other agencies (as well as 

external experts), will often be needed to provide specialized expertise, networks or 

other assistance. It is also noted that these broad categories are not intended to eliminate the necessary interaction across subject matters. We expect that the FLEC 

Executive Committee will be mindful of these interactions including circumstances 

where some programmatic overlap may be appropriate, and consider them in their 

working group strategies. 

Basic Financial Capability 

The FLEC statute requires the Commission to emphasize “basic personal income 

and household money management and planning skills,” which include, for example, saving and using credit wisely, understanding credit scores and credit reports, and 

accessing and using financial products and services.33 Similarly, the Dodd-Frank Act 

established the CFPB Office of Financial Education and required it “to develop and 

implement a strategy to improve the financial literacy of consumers that includes 

measurable goals and objectives, in consultation with the Financial Literacy and 

Education Commission, [and] consistent with the National Strategy for Financial 

Literacy” through a range of activities.34
Section 2: Coordination of Programs and Policy Proposals for High Impact 19

In addition to the CFPB, several other federal agencies are engaged in basic financial 

capability, including the FDIC, HUD and the Federal Trade Commission (FTC). For 

example, the FDIC and the CFPB manage two separate resources on general financial literacy and education topics including savings and credit, particularly geared to 

lower-income individuals with less formal financial education. The FDIC’s Money 

Smart Financial Education Program (“Money Smart”) is a comprehensive multi-part 

curriculum to use in group settings that covers core topics including personal money 

management and using financial services effectively. Money Smart was designed to be 

used by financial institutions and other organizations interested in sponsoring financial education workshops.35 The FDIC offers several versions of the Money Smart 

curriculum with modules modified to address the particular needs of different populations, including adults, young people, older consumers, consumers with disabilities, 

and small businesses.36 The general purpose version of the curriculum is also available online and via podcast. There is some evidence to suggest that completing the 

Money Smart curriculum increases a participant’s likelihood of planning to open a 

new account.37

The CFPB’s Your Money, Your Goals program is a toolkit with action booklets to use 

by social services providers in a one-on-one setting with the people who they serve. 

It includes a train-the-trainer program element (including materials and guides) 

designed to help social workers and other practitioners learn to integrate basic financial literacy concepts into social service programs such as Head Start, workforce development programs, and others.38 In addition, HUD’s Housing Counseling Program 

establishes standards for HUD HCP grantees that provide consumers with rental 

and homeownership counseling on housing issues, which often includes content on 

basic financial literacy and education topics.39

Issues and Recommendations

Metrics and Accountability for Basic Financial Capability 

The FLEC and member agencies have activities that address basic financial capability. 

In some cases these activities are duplicative or could be better coordinated. Although 

the Dodd-Frank Act established the CFPB Office of Financial Education, the law 

does not address the consolidation of existing programs and the authority of the various agencies engaged in this area. However, the Dodd-Frank Act does require the 

35. Federal Deposit Insurance Corporation, (FDIC) “Money Smart – A Financial Education Program, “webpage, available at: https://

www.fdic.gov/consumers/consumer/moneysmart/.

36. Id.

37. Lyons, Angela and Scherph, Erik, “Moving from Unbanked to Banked: Evidence from the Money Smart Program”, Financial 

Services Review, 2004, available at: https://pdfs.semanticscholar.org/e05c/0394bd36d5ad19eb0ad1ad6ecc6bfed575c6.pdf.

38. Consumer Financial Protection Bureau, “Your Money, Your Goals”, webpage, available at: https://www.consumerfinance.gov/

practitioner-resources/your-money-your-goals./

39. U.S. Department of Housing and Urban Development, “Housing Counseling Program Description” webpage, available at: https://

www.hudexchange.info/programs/housing-counseling/program-description/.
20 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

CFPB Office of Financial Education to “develop and implement a strategy to improve 

the financial literacy of consumers that includes measurable goals and objectives, in 

consultation with the Financial Literacy and Education Commission, consistent with 

the National Strategy for Financial Literacy.”

Recommendation

The CFPB in its role on the FLEC Executive Committee and leading the Basic 

Financial Capability Working Group should have the responsibility for coordinating the FLEC’s activities related to basic financial capability and have accountability 

for reporting on those activities. Treasury also recommends that the outcome measures such as those in Exhibit C be considered for adoption to measure the impact of 

financial literacy and education efforts on basic financial capability.

Basic Financial Capability Curriculum

Both CFPB and FDIC provide resources to organizations wishing to deliver basic 

financial capability education and counseling, especially geared toward lower-education and lower income individuals. 

Recommendation

Treasury recommends that FLEC designate the Money Smart curriculum and the 

Your Money Your Goals program as the core resources for use by federal agencies with 

initiatives targeted to civilians, and that the CFPB and FDIC collaborate to align the 

recommended uses of the Your Money, Your Goals Toolkit and the Money Smart 

curriculum to create a comprehensive set of materials to be considered the core federal financial education product for adults, especially low-income adults. 

Access to Financial Services

An inclusive banking system is important to expanding access for American households to safe, secure, and affordable financial services. However, a significant percentage of Americans conduct some or all of their financial transactions outside of 

the mainstream banking system. Public and private financial education programs 

that focus on financial inclusion are designed to develop a foundation that provides 

opportunities for Americans to deposit funds, make payments, access credit and accumulate savings. Access to these banking services is one of the first steps in the journey toward financial stability. Although financial education is not the only hurdle to 

households entering the financial mainstream, it is still a critical component of financial inclusion programs. 

Since 2009, the FDIC has conducted, on a biennial basis, the National Survey of 

Unbanked and Underbanked Households (“FDIC Survey”).40 The FDIC Survey 

tracks the estimated percentage of U.S. households without an account at an insured 

40. Id. at 11.
Section 2: Coordination of Programs and Policy Proposals for High Impact 21

financial institution, and the percentage that have an account but also relied on financial services and products outside of the mainstream banking system. According to 

the 2017 FDIC Survey, 6.5 percent of U.S. households (8.4 million), comprised of 

14.1 million adults and 6.4 million children, were “unbanked,” meaning no one in the 

household had a checking or savings account.41

Since the first FDIC Survey in 2009, the demographic characteristics of the unbanked 

have remained consistent. The FDIC Survey notes that the unbanked have been, and 

continue to be, lower-income, less educated, not born in the United States, younger 

and disproportionately minority. Specifically, the 2017 FDIC report shows that 16.9 

percent of Black and 14 percent of Hispanic households are unbanked while 25 percent of households earning less than $15,000 are unbanked.42 In addition, the survey shows persons with disabilities, those who do not own a home, and unmarried 

female-headed households are also more likely to be unbanked.43

The Federal Reserve Bank of Boston noted that there are direct and indirect costs of 

being unbanked that may, in total, be more expensive compared with having a bank 

account.44 Examples of direct costs include fees related to check cashing and money 

orders, while examples of indirect costs include lack of interest accrued from savings accounts. In terms of indirect costs, the FDIC has determined that one in five 

unbanked households save for unexpected emergencies, but typically outside of an 

insured financial institution. If these unbanked households were brought into the 

banking system it could allow the formation of “relationships that help them safeguard funds, enhance access to credit, and increase financial security.”45

In the FDIC Survey, the top four reasons cited by U.S. households for not having a 

bank account include: inadequate funds to keep an account; lack of trust in banks; 

concerns with privacy; and high account fees.46 Some of the reasons cited by households for being unbanked, including lack of trust and concerns with privacy, may have 

a connection to a lack of financial literacy and education. For example in the 2015 

FDIC survey, 55.8 percent of unbanked households indicated that banks are “not 

at all” interested in serving households like theirs, which may be another education 

opportunity for bankers and consumers.47

41. Federal Deposit Insurance Corporation, “FDIC National Survey of Unbanked and Underbanked Households: Appendix Tables”, 

2017, available at: https://www.fdic.gov/householdsurvey/2017/2017appendix.pdf.

42. Id.

43. Id.

44. Federal Reserve Bank of Boston, “Estimating the Cost of Being Unbanked”, 2007, available at: https://www.bostonfed.org/-/media/

Documents/cb/PDF/article9.pdf.

45. Federal Deposit Insurance Corporation, “FDIC National Survey of Unbanked and Underbanked Households” (2015 Report), 

2016, available at: https://www.economicinclusion.gov/surveys/2015household/documents/2015_FDIC_Unbanked_HH_Survey_

Report.pdf.

46. Id at 11.

47. Id at 45.
22 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

In addition to the unbanked population, the 2017 FDIC Survey noted that 18.7 percent of U.S. households (24.2 million) are “underbanked” because they have a checking or savings account but also used products or services from a nonbank alternative 

financial services provider in the past 12 months. Products from alternative financial 

service providers that identify a household as “underbanked” in this model include 

money orders, check cashing, international remittances, payday loans, refund anticipation loans, rent-to-own services, pawn shop loans or auto title loans.48

The FDIC definition of underbanked is linked to a household’s relationship to nonbank financial institutions. Underbanked does not mean that a person’s access to the 

banking system is impaired. The FDIC’s rationale for adopting this definition was “to 

highlight the opportunities for banks to keep consumers inside the banking system.”49

According to the FDIC survey, the primary reason stated for consumers not having 

an account is that they lack sufficient funds for a bank account.50 Many of these consumers are concerned that fees associated with an account are too high for consumers 

48. Id. at 11.

49. Wack, Kevin, “Ditch the Word ‘Underbanked,’ It’s Confusing and Misleading”, American Banker, 2013, available at: https://www.

americanbanker.com/opinion/ditch-the-word-underbanked-its-confusing-and-misleading.

50. Id. at 11. Percentage of Respondents

Not enough 

money to 

keep in 

account

Don’t

trust

banks

Avoiding 

banks 

gives more 

privacy

Inconvenient

hours

Inconvenient

locations Other

Account

fees too

high

Account

fees are

unpredictable

ID, credit, 

or former 

bank 

account 

problems

Banks 

don’t offer 

needed 

products/

services

Reasons for Not Having a Bank Account (Percent, 2017)

34.0%

12.6%

8.6%

3.0% 4.9% 4.1%

52.7%

30.2%

24.7%

28.2%

14.4%

9.4% 9.2%

13.1%

20.2%

Cited as the main reason why they didn’t have a bank account

Cited as a reason why they didn’t have a bank account

1.6% 2.1%

60

50

40

30

10

0

Source: FDIC National Survey of Unbanked and 

Underbanked Households, Appendix Tables (2017) 

14.9%

12.3%

1.3%
Section 2: Coordination of Programs and Policy Proposals for High Impact 23

who maintain low balances. There is a need for low cost accounts that will allow consumers to avoid fees and overdrafts. In the past the CFPB sent letters to the 25 largest retail banks encouraging them to make available and widely market lower-risk 

deposit accounts.51

Although the federal government is focused on bringing more Americans into the 

financial mainstream, a significant amount of this work is being done by state and 

local governments. Many of these governments are engaging in public-private partnerships with financial institutions and community organizations to open accounts 

for the unbanked and improve their financial stability. One of the more successful programs is the Bank On program that was originally started by the city of San 

Francisco in 2006.52 Bank On has since been adopted by more than 74 regional coalitions across the country, representing more than 20,000 bank branches offering safe 

51. Consumer Financial Protection Bureau, “CFPB Takes Steps to Improve Checking Account Access,” blog post, February 3, 2016, 

available at: https://www.consumerfinance.gov/about-us/newsroom/cfpb-takes-steps-to-improve-checking-account-access/.

52. San Francisco Office of Financial Empowerment, website, available at: https://sfgov.org/ofe/history-innovation; see also National 

League of Cities Institute for Youth, Education and Families, “Banking on Opportunity: A Scan of the Evolving Field of Bank 

On Initiatives,” U.S. Department of the Treasury, 2011, available at: https://www.treasury.gov/resource-center/financial-education/

Documents/Banking%20On%20Opportunity%20Nov%2011.pdf.

Income Categories

Underbanked Unbanked

Percentage of Households that are Unbanked and Underbanked

Total

Annual 

Income 

Less than 

$15,000

Annual 

Income 

$15,000–

$30,000

African

American Asian Hispanic White Other

35

30

25

20

15

10

5

0

Unbanked & Underbanked Households

(Percent by Income, Race, and Language Spoken, 2017)

Source: FDIC National Survey 

of Unbanked and Underbanked 

Households, Appendix Tables (2017) 
24 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

and affordable accounts.53 The goal of the Bank On program is to ensure that everyone has access to a safe and affordable bank account by working with financial institutions to provide low-cost or no-cost accounts combined with financial education. 

These programs address both access and suitability of accounts and allow financial 

institutions to reach new customers.

Issues and Recommendations

Bank Account Screening Credit Reporting Agencies

Unbanked consumers sometimes are unable to access banking services because of negative information in bank account screening consumer reporting agencies (“account 

screening CRAs”). Account screening CRAs, used by the vast majority of U.S.-based 

banks and some credit unions, are a means for financial institutions to warn and be 

warned by industry colleagues about fraudulent bank clients. Over 80 percent of banks 

use reports produced by an account screening CRA to decide whether to allow a consumer to open a checking or savings account.”54 In some cases, these account screening CRAs can be a substantial barrier to mainstream banking access.

Recommendations

Treasury recommends that financial institutions and educators incorporate into their 

curriculum and programs information about account screening CRAs. The curriculum 

and programs should discuss how account screening CRAs are a potential barrier to 

accessing the banking system, ways to avoid negative information on bank account 

screening reports, and the error resolution process to resolve incorrect information. 

Low Cost and Second Chance Bank Accounts

Many local and state governments have established public-private partnerships to 

work with banks and credit unions, nonprofits and other organizations to expose 

more people to the banking system. One example of public private partnerships is 

the Bank On initiative. Bank On customers, for example, get a safe and affordable 

account that is insured, banks and credit unions receive additional deposits, and state 

and local governments may benefit in both operational efficiency and improved community financial health.55 Many banks and credit unions also offer low cost “second 

chance accounts” for consumers who have been rejected due to a negative history with 

an account screening CRA. Second chance checking accounts have many of the same 

53. Join Bank On.org, website, available at: http://joinbankon.org/coalitionmap/.

54. Wu, Chi Chi and Plat, Katie, “Account Screening Consumer Reporting Agencies: a Banking Access Perspective”, National 

Consumer Law Center and Cities for Financial Empowerment Fund, available at: http://cfefund.org/wp-content/uploads/2016/08/

Account-Screening-CRA-Agencies-Banking-Access-report.pdf.

55. See, for example, Cities for Financial Empowerment Fund, “Bank on Coalition Playbook: Equipping Bank On coalitions for local 

banking access success,” January, 2019, available at: https://issuu.com/cfefund/docs/bank_on_playbook_jan_2017. For background, see: 

Wiedrich, Kasey et al., “Financial Counseling & Access for the Financially Vulnerable: Findings from the Assessing Financial 

Capability Outcomes Adult Pilot,” Corporation for Enterprise Development, April 2014, available at: https://www.treasury.

gov/resource-center/financial-education/Documents/Financial%20Counseling%20and%20Access%20for%20the%20Financially%20

Vulnerable%20-%20Findings%20from%20the%20Assessing%20Financial%20Capability%20Outcomes%20%E2%80%A6.pdf. 
Section 2: Coordination of Programs and Policy Proposals for High Impact 25

features as Bank On accounts but carry more requirements than standard checking 

accounts, including setting up direct deposit or completing financial education.56

Recommendations

Treasury recommends that the FLEC collaborate with public-private partnerships 

between state and local governments and financial institutions to develop best practices for building financial capability by connecting consumers to suitable financial 

products and education. 

Saving and Credit

In addition to access to financial services, saving and credit are also fundamental 

components of basic financial capability. Consumers save for a wide variety of needs, 

including short term and everyday issues such as groceries, day care services, transportation, utilities and rent or mortgage payments. Consumers also plan, budget and 

save to pay for more expensive mid-term needs such as health care prevention and 

treatment and big-ticket purchases such as appliances. Consumers save for long-term 

goals as well, including starting a business, paying for higher education for themselves or their children, and for large expenses such as the purchase, lease or repair of 

an automobile or home. Saving is also a key ingredient of planning for retirement. 

Despite the clear needs and benefits of saving, American households have difficulty 

with saving. Research has found that many households of all income levels are not saving enough.57 A recent national survey found that more than 80 percent of American 

consumers believe they lack enough savings, and a full one-third (33 percent) of respondents have no savings whatsoever.58 Recent surveys also show that a large percentage of 

consumers have insufficient available funds to cover unplanned expenses. Experts estimate that families in the U.S. typically experience financial shocks of at least $2,000 

annually.59 Unfortunately, forty percent (40 percent) of American families do not have 

$400 in available savings to pay for unplanned or emergency expenses without borrowing or selling a possession.60 The CFPB’s Start Small, Save Up initiative, announced in 

2019, offers tips, tools, and information to help consumers build a basic savings cushion of at least $400, develop a savings habit as a foundation for securing their financial 

futures and be better prepared to meet a financial shock or emergency.

Consumer savings is a complex issue that involves individual situations and particular 

decision-making skills and circumstances. As noted in the 2006 National Strategy for 

Financial Literacy, some consumers require assistance with careful planning to begin 

56. “Second Chance Checking Accounts Across the U.S.”, Nerdwallet, available at: https://www.nerdwallet.com/blog/banking/

second-chance-checking/.

57. Currier, Erin and Elmi,Sheida “The State of American Family Finances”, The Pew Charitable Trusts, January 7, 2016, available at: 

http://www.pewtrusts.org/en/research-and-analysis/articles/2016/01/07/the-state-of-american-family-finances.

58. Id. 

59. Id. 

60. Id at 12.
26 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

to save, while others simply need a light touch nudge in the direction toward saving, 

along with information and access to products and services that can help them save 

to meet their needs and goals.61

One proposed means to strengthen emergency savings is to enable workers to save for 

unplanned needs via workplace savings programs, similar to proposals that would add 

a short-term savings option to workplace retirement savings plans, such as 401(k)s. 

Another proposed option would involve employers providing their workers access to 

stand-alone emergency savings accounts, such as with a bank or credit union, which 

would be funded by paycheck allocations. While workplace savings programs may 

hold promise, very few have been implemented in the U.S., and there are many unanswered questions on implementation, including questions about tax implications and 

the impact on retirement savings.62

61. Id. at 24 (FLEC, 2006).

62. Mitchell, David S. and Lynne, Gracie, “Driving Retirement Innovation: Can Sidecar Accounts Meet Consumers’ Short- and 

Long-Term Financial Needs”, Aspen Institute, June 2017, available at: https://assets.aspeninstitute.org/content/uploads/2017/06/

FSP-Sidecar-Accounts-Brief.pdf; Beshears, John, et. al., “Building Emergency Savings Through Employer-Sponsored Rainy 

Day Savings Accounts”, Working Paper, Harvard University, October 2017, available at: https://scholar.harvard.edu/files/laibson/

files/2017-10-25_rainy_day_paper_final_2.pdf .

Source: “Report on the Economic Well-Being of U.S. Households in 

2017”, Federal Reserve Board of Governors, May 22, 2018, available at: https://www.federalreserve.gov/publications/files/2017-

report-economic-well-being-us-households-201805.pdf

Response

Percent

Borrowing 

from a friend 

or family 

member

Put it on a 

credit card 

and pay it off 

over time

Selling 

something

Using a bank 

loan or line of 

credit

Using a payday 

loan, deposit 

advance, or 

overdraft

Other

Would not be 

able to pay for 

the expense 

right now

45

40

35

30

25

20

15

10

5

0

Other Ways Individuals Would Cover a $400 Emergency Expense (Percent, 2017)
Section 2: Coordination of Programs and Policy Proposals for High Impact 27

Savings are also a critical component of disaster preparedness. When individuals, 

households and communities are not financially prepared for emergencies, the burden of response falls on society. In 2017, Hurricanes Harvey, Irma, and Maria caused 

a combined $265 billion in damage,63 with at least three-quarters of the residential 

flood damage uninsured.64 According to the Federal Emergency Management Agency 

(FEMA), of the estimated $55 billion in losses expected annually due to natural disasters, more than half will be uninsured.65 Consumers having adequate and appropriate forms of insurance is an important component of disaster preparedness, yet many 

consumers may not understand insurance products and coverage, and may underestimate their risk.66

When last surveyed in 2017, Americans showed a significant lack of preparedness 

for natural disasters. Having adequate insurance, emergency savings, retaining financial records, knowing how to manage finances after an emergency and avoiding fraud 

and scams are critical financial preparedness activities. Just over one-third of respondents reported having stored financial, insurance, medical or other records and only 

35 percent of homeowners in a flood region reported purchasing flood insurance.67

As noted earlier, over 40 percent of Americans could not find $400 in the case of an 

emergency. And, while renters are three times more likely to need assistance evacuating than homeowners, 39 percent of the 44 million Americans who rent do not have 

$2,000 to cover evacuation expenses.68

Communities do not often include household financial preparedness as part of 

their disaster planning. For example, the National Mitigation Investment Strategy 

(NMIS),69 which guides federal, state and local preparation in order to mitigate disaster risks and reduce reliance on federal funding, does not specifically address household 

financial preparedness, even though these actions are likely to improve resilience.70

In order to reduce this gap, FEMA, in its 2018-22 Strategic Plan includes a goal of 

“build(ing) a culture of preparedness.” This includes closing the insurance gap and 

63. Id at 13.

64. Jeffrey, Tom, “CoreLogic Identifies Flood and Wildfire as the Two Most Destructive Natural Hazards in 2017”, CoreLogic 

Insights, February 2018, available at: https://www.corelogic.com/blog/2018/02/corelogic-identifies-flood-and-wildfire-as-the-twomost-destructive-natural-hazards-in-2017.aspx .

65. Id at 14.

66. Kunreuther, Howard, McMorrow, Stacy, and Pauly, Mark, “Insurance and Behavioral Economics: Improving Decisions in 

the Most Misunderstood Industry”, Risk Management and Decision Process Center, The Wharton School, University of 

Pennsylvania, August 2012, available at: http://www.naic.org/documents/cipr_events_2012_cipr_summit_presentations.pdf.

67. Federal Emergency Management Agency, “2017 National Household Survey Results: Preparedness in America”, available at: 

https://community.fema.gov/AP_Survey_Story_PDF.

68. Id at 14.

69. The federal National Mitigation Investment Strategy (NMIS) provides a national approach to investments in mitigation 

activities and risk management across the United States for federal departments and agencies; state, territorial, tribal, and local 

governments and private and nonprofit sector entities such as businesses, philanthropies, universities, and other non-governmental 

organizations. It considers and recommends actions reflecting input and involvement from, and benefits for, all national 

stakeholders involved in disaster resilience, including federal, state, tribal, territorial, local and private organizations, and the 

public. Available at: https://www.fema.gov/national-mitigation-framework . 

70. Edmiston, Kelly, “Financial Vulnerability and Personal Finance Outcomes of Natural Disasters”, Federal Reserve Bank of Kansas 

City, September 2017, available at: https://www.kansascityfed.org/~/media/files/publicat/reswkpap/pdf/rwp17-09.pdf?la=en.
28 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

helping people financially prepare for disasters. As part of this goal, FEMA’s Federal 

Insurance and Mitigation Administration has a goal of doubling the coverage under 

the National Flood Insurance Program by 2023.71

Basic financial capability also includes consumer debt. When used judiciously, debt 

is a convenient and helpful tool to help consumers manage their everyday financial 

lives. In the United States, consumers of all income levels borrow for both short-and 

long-term needs. Upwards of 77 percent of American families hold debt of some 

type,72 with the national total consumer debt totaling more than $13 trillion.73 Credit 

cards are a primary form of consumer borrowing in the United States.74 As of the end 

of 2017, a full 83 percent of American adults (181 million consumers) had at least 

one credit card,75 representing the highest number of account holders since 2005.76

According to a recent report by Experian, the “average” U.S. consumer has 3.1 credit 

cards, with an average balance due of $6,354, representing an increase of 2.7 percent 

from the previous year.77 Approximately 44 percent of households with credit cards 

carry debt on their cards – that is, they maintain a balance on their card account from 

month to month.78 According to research by NerdWallet, the households that carry 

credit card balances in this way pay $904 in interest annually, on average.79

Credit scores and credit reports are an important factor with respect to a household’s 

ability to access consumer credit. A low credit score could limit a consumer’s access to 

credit or make credit more expensive. However, in our current economy credit scores 

have been climbing.80 As of April 2018, the average FICO score was 704, with less 

than 20 percent of consumers with a score of less than 600.81

Efforts have been made to educate people about their credit reports and credit scores. 

For example, the Fair Credit Reporting Act (FCRA) requires each of the nationwide credit reporting companies — Equifax, Experian, and TransUnion — to provide 

71. Federal Emergency Management Agency, “FEMA’s Strategic Direction for the National Flood Insurance Program (NFIP) 

and National Mitigation Investment Strategy (NMIS),” February 2018, available at: https://www.treasury.gov/initiatives/fio/

Documents/FACIFebruary2018_FEMA.pdf.

72. Board of Governors of the Federal Reserve System, “Changes in U.S. Family Finances from 2013 to 2016: Evidence from the 

Survey of Consumer Finances.” Federal Reserve Bulletin, September 2017, Vol 103, p. 22.

73. Dowdy, Daniel, “Are Plummeting Savings and Rising Debt Red Flags for Household Finances?”, Aspen Institute, May 4, 2018, 

available at: https://www.aspeninstitute.org/blog-posts/plummeting-savings-rising-debt-red-flags-household-finances/

74. Id. at 72.

75. Sullivan, Bob, “State of Credit: 2017,” Experian, January 11, 2018, available at: https://www.experian.com/blogs/ask-experian/

state-of-credit/.

76. Id. 

77. Id.

78. American Bankers Association, “Credit Card Market Monitor” April 2018, available at: https://www.aba.com/Press/

Documents/2017Q4CreditCardMonitor.pdf.

79. El Issa, Erin, “NerdWallet’s 2017 American Household Credit Card Debt Study,” NerdWallet, December 2017, https://www.

nerdwallet.com/blog/average-credit-card-debt-household/.

80. FICO, “Average U.S. FICO Score Hits New High”, September 24, 2018, available at: https://www.fico.com/blogs/risk-compliance/

average-u-s-fico-score-hits-new-high/.

81. Id.
Section 2: Coordination of Programs and Policy Proposals for High Impact 29

consumers with a free copy of their credit report, at their request, once every 12 

months.82 An increasing number of U.S. consumers are also receiving free access to 

their credit score from their bank or financial institution, thanks to a major initiative 

sponsored by the FICO organization and national financial services firms to provide 

FICO scores directly to their customers.83 But even with these initiatives from the 

private sector, only 36 percent of American consumers obtained their credit report in 

2018, and the percentage of consumers who say it is important to check these reports 

has declined in recent years.84 The CFPB has also found that consumers are confused 

about credit scores and credit reports and many are not certain how to obtain their 

credit report.85

In addition, a large portion of the U.S. population cannot access consumer credit at 

all. CFPB estimates that about 20 percent of Americans (45 million adults) do not 

have access to credit because they do not have either a complete credit file or have 

no file at all. Upwards of 30 percent of residents of low-income neighborhoods have 

insufficient information in their credit file, with another 15 percent of these residents 

more having no credit score. The CFPB research also found that Black and Hispanic 

consumers are more likely to lack a thorough credit file and to have unscored credit 

records than are White or Asian consumers.86

To address credit invisibility, there are strategies that can help thin- and no-file consumers build a positive credit history. The CFPB has shared information with the 

public about strategies to address credit invisibility, such as secured credit cards, credit 

builder loans, and alternative data and modeling techniques that can help consumers, 

regulators, and industry expand access to credit. The federal government administers 

numerous programs that provide the public with basic financial literacy information and services related to saving and credit. Several agencies provide the public 

with information on these core topics via agency websites and public outreach; formal financial literacy curricula; and financial coaching for low-to-moderate income 

individuals. Two agencies, FTC and CFPB, administer web-based public awareness 

information specifically about the importance of credit scores and credit reports, as 

well as identity theft and protecting one’s credit profile. Finally, numerous agencies, 

including CFPB, HUD and the Federal Reserve Board, administer research on trends 

in consumer savings and effective practices for encouraging savings. These federal 

82. “Fair and Accurate Credit Transactions Act of 2003, P.L. 108-159; 15 U.S.C. 1681j, available at: https://www.congress.gov/108/

plaws/publ159/PLAW-108publ159.pdf.

83. Gaskin, Joanne, “How FICO Score Open Access Can Help Credit Counsellors,” FICO, August 8, 2016, available at: https://

www.fico.com/blogs/?s=FICO+Score+Open+Access.

84. Consumer Federation of America, “Survey Shows An Increasing Number of Consumers Have obtained Their 

Credit Scores and Know Much More About Credit Scores”, 2018, available at: https://consumerfed.org/press_release/

survey-shows-an-increasing-number-of-consumers-have-obtained-their-credit-scores-and-know-much-more-about-credit-scores/.

85. Consumer Financial Protection Bureau, “Consumer Voices on Credit Reports and Scores”, February 2015, available at: https://files.

consumerfinance.gov/f/201502_cfpb_report_consumer-voices-on-credit-reports-and-scores.pdf.

86. Consumer Financial Protection Bureau, “Data Point: Credit Invisibles”, 2015, available at: https://files.consumerfinance.

gov/f/201505_cfpb_data-point-credit-invisibles.pdf.
30 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

programs and initiatives on saving and credit do not appear to be coordinated across 

agencies, and the agencies do not appear to have shared goals or output or outcome 

metrics for these topics.

Issues and Recommendations 

Emergency Savings

According to the Federal Reserve, 40 percent of Americans are not financially prepared for a $400 emergency expense. Some consumers require assistance with careful planning to begin to save, while others simply need a light touch nudge in the 

direction toward saving, along with information and access to products and services. 

The CFPB’s Start Small, Save Up initiative, announced in 2019, offers tips, tools, 

and information to help consumers build a basic savings cushion of at least $400 and 

develop a savings habit as a foundation for securing their financial futures and be better prepared to meet a financial shock or emergency.

Recommendations

Treasury recommends that the CFPB and the FLEC work with employers to promote emergency savings. 

Financial Disaster Preparedness

A lack of savings and insurance leaves many Americans more vulnerable during a 

natural disaster. When individuals, households and communities are not financially 

prepared for emergencies, the burden of response falls on society. 

Recommendations

Treasury recommends that the CFPB lead on disaster financial preparedness education content and effective delivery, such as education about emergency savings and 

insurance, working closely with FEMA and other agencies. Metrics and methodology for evaluating and measuring impact should be established, building on the financial preparedness questions in FEMA’s Annual Survey of Household Preparedness. 

Treasury also recommends the Federal National Mitigation Investment Strategy and 

state and local disaster planning should include household financial preparedness and 

recovery as part of their mitigation strategies.

Retirement Savings and Investor Education

For more than 80 years, Social Security, employer sponsored pensions or retirement 

plans, and individual savings have represented the three main pillars of our retirement 

system. This model, which enables financial security in later life, has guided the popular conception of retirement.87 However, over the last 40 years, employers have shifted 

87. U.S. Government Accountability Office, “The Nation’s Retirement System: A Comprehensive Re-evaluation Is Needed to Better 

Promote Future Retirement Security GAO-18-111SP”, 2018, available at: https://www.gao.gov/assets/690/687797.pdf .
Section 2: Coordination of Programs and Policy Proposals for High Impact 31

Source: “Report on the Economic Well-Being of U.S. Households in 2017”, Federal Reserve Board of Governors, May 22, 2018, available at: https://www.federalreserve.gov/publications/files/2017-reporteconomic-well-being-us-households-201805.pdf

Lack of Retirement Savings and Perception of Preparedness

(Percent by Age and Race/Ethnicity, 2017)

Response

Percent

Percent

No savings No savings

Perceive 

retirement savings 

as being on track

Perceive 

retirement savings 

as being on track

50

45

40

35

30

25

20

15

10

5

0

18–29 30–39 40–49 50–59 60+ White Black Hispanic

0 5 10 15 20 25 30 35 40 45 50 55

Source: “Report on the Economic Well-Being of U.S. Households in 

2017”, Federal Reserve Board of Governors, May 22, 2018, available at: https://www.federalreserve.gov/publications/files/2017-report-economic-well-being-us-households-201805.pdf

Defined contribution plan

Savings not in

retirement accounts

IRA

Defined benefit pension

Real estate

Business

Other

None

Forms of Retirement Savings Among Non-Retirees (2017)
32 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

towards offering defined contribution plans, like 401(k)s, and away from defined benefit plans. This shift has fundamentally changed one of the three main pillars, placing 

more personal responsibility on individuals to plan for their retirement and increasing the need for quality financial literacy and education.

Many Americans worry about retirement but according to the Federal Reserve, 25 

percent of Americans have no retirement savings.88 In addition, of those non-retired 

American adults, less than 40 percent believe their savings plan is on track for a secure 

retirement.89 Factors such as health, disability and work skills relative to workforce 

demands are all likely to play a role in retirement preparedness, as well as financial 

choices, such as greater prevalence of household debt (including mortgages and student debt, as well as other forms of debt) during retirement. 

The primary agency responsible for educating workers and employers about workplace 

retirement plans (both pensions and defined contribution plans) is the Department 

of Labor’s Employee Benefits Security Administration (DOL/EBSA). As required 

by law, DOL/EBSA provides information and outreach, and answers questions from 

employers and employees about all aspects of workplace retirement savings plans.90

DOL/EBSA reports hosting approximately 1,800 events per year and attracting 4 

million visits to its website.91

DOL/EBSA’s Consumer Assistance Benefit Advisors help consumers with workplace benefit issues through more than 100 Benefit Advisors located at DOL’s 13 

field offices, where they educate employees and employers about their rights and 

obligations under employee benefit laws. The Benefit Advisors also assist individuals in obtaining retirement and health benefits that have been improperly denied. In 

FY 2017, the Benefits Advisors recovered over $418.7 million in benefits for participants that had been improperly denied.92 The Benefit Advisors also responded to 

more than 182,000 inquiries and complaints from employers, employees and others 

about workplace plans.93

The HHS also has a retirement program that serves primarily lower-income seniors, 

especially women, through a grant to the National Education and Resource Center 

on Women and Retirement.94 The HHS grant provides education, skills building and 

retirement planning tools particularly to low-income women to enhance their financial security in retirement. “The mission of the Center is to provide women with access 

88. Id. at 12. 

89. Id.

90. Employee Retirement Income Security Act of 1974 (ERISA), Pub. L. No. 93–406, 88 Stat. 829, (1974), codified in part at 29 U.S.C. 

ch. 18; Savings Are Vital to Everyone’s Retirement Act of 1997, Pub. L. No. 105-92, 111 Stat. 2139 (1997), 29 U.S.C. § 1131 et 

seq. 

91. U.S. Department of Labor, Employee Benefits Security Administration, “FY 2019 Congressional Budget Justification”, 2018, 

available at: https://www.dol.gov/sites/dolgov/files/legacy-files/budget/2019/CBJ-2019-V2-01.pdf.

92. Id.

93. Id. Inquiries and complaints includes both health and retirement topics.

94. Id. at 15. 
Section 2: Coordination of Programs and Policy Proposals for High Impact 33

to a one-stop gateway that integrates financial information and retirement planning, 

health, and long-term care resources through Older Americans Act (OAA) supported 

programs.”95 The impact of the program has not been widely measured.96

Helping Americans understand Social Security is also an important piece of the federal effort around retirement planning. The SSA promotes a number of initiatives to 

make sure Americans understand how Social Security works. These include outreach 

through in-person events with community organizations and interest groups, as well as 

websites and mass media. These include, for example, Benefits Planner97 and Retirement 

Estimator.98 SSA encourages Americans to open a my Social Security account99 in 

which they can receive personalized benefit estimates, verify their earnings history and 

see their Social Security Statement. SSA’s Social Security Statement provides workers 

with information on their estimated monthly benefits and what individuals can expect 

to receive if they claim benefits at full retirement age and earlier and later ages (currently 

67, 62 and 70). The Statement also provides information on family and survivor benefits. Research has shown that the Statement can help people make informed decisions 

about retirement claiming,100 and receipt of the Statement corresponds to claiming at 

later ages, as well as greater employment for those aged 62 through 70.101

The U.S. government comprises one of the country’s largest workforces, with approximately 2 million civilian employees dispersed across the U.S. and around the world.102

Federal employees participate in the Thrift Savings Plan (TSP), a defined contribution plan for civil service employees, retirees and some military service members.103

The Thrift Savings Plan Open Elections Act of 2004104 required that the OPM support retirement financial literacy and education for federal employees and that each 

federal agency submit to OPM an annual financial literacy and education strategy for 

its staff. The strategy is intended to educate federal employees on the need for retirement savings and investment, provide information on how to plan for retirement, and 

how to calculate the retirement investment needed to meet their retirement goals. 

95. Id. 

96. Id.

97. Social Security Administration, “Benefits Planner: Retirement,” website, available at: https://www.ssa.gov/planners/retire/.

98. Social Security Administration, “Retirement Estimator,” website, available at: https://www.ssa.gov/planners/retire/.

99. See, for example; Borland, Jim, “my Social Security Saves You Time for the Important Things,” blog, Social Security Matters, 

April 30, 2018, available at: https://blog.ssa.gov/my-social-security-saves-you-time-for-the-important-things/.

100. Smith, Barbara A. and Couch, Kenneth A. “How Effective Is the Social Security Statement? Informing Younger Workers about 

Social Security”, Vol. 74, No. 4, Social Security Bulletin, 2014, available at: https://www.ssa.gov/policy/docs/ssb/v74n4/v74n4p1.html.

101. Smith, Barbara A and Couch, Kenneth A. “Can Informational Interventions Be Effective Policy Tools? The Example of the 

Social Security Statement Consumer Interests Annual” Vol. 64, 2018, available at: https://www.consumerinterests.org/assets/docs/

CIA/CIA2018/SmithCIA2018.pdf.

102. Id at 16.

103. Thrift Savings Plan, “What is the Thrift Savings Plan (TSP)?” website, available at: https://www.tsp.gov/PlanParticipation/

AboutTheTSP/index.html#whoAdministers.

104. 5 U.S.C. § 8350.
34 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

The DoD provides retirement education for military service members, who historically have participated in a defined benefit plan. Recently, the National Defense 

Authorization Act for Fiscal Year 2016 created a new Blended Retirement System 

(BRS) for military service members that combines the traditional military defined 

benefit retirement pension plan with a defined contribution plan through the federal 

government’s TSP.105 In 2018, eligible service members were given the choice of opting into the BRS, while all service members joining the military on or after January 

1, 2018, will automatically be enrolled in the BRS.106 The DoD offered educational 

courses and a comparison calculator to service members eligible to opt-in to the BRS 

and continues to educate new service members on retirement. Currently, there are 

more than 500,000 service members enrolled in the BRS.107

While there is widespread agreement that many Americans are not adequately saving for retirement, there is not agreement in how to measure readiness. However, data 

indicates that many Americans have little or no money set aside for retirement.108 To 

date, four agencies—DOL/EBSA, SSA, HHS, and OPM—have dedicated activities on retirement savings, which include informational and outreach resources, online 

tools, and some direct education. The most broad-reaching of these programs through 

DOL, while intended to increase retirement savings, planning and being prepared for 

retirement, currently only track usage and distribution of resources. One small program at HHS reports outcomes from pilots – namely increases in knowledge and confidence, and plans to take financial actions.109 Without common measures for these 

activities, agencies cannot determine their true impact on their intended purpose and 

whether their strategies are effective and cost-effective. 

Helping Americans prepare for retirement will also require a focus on investor education. 

In August 2012, the SEC completed a report required by the Dodd-Frank Act, which 

found that U.S. retail investors lack basic financial literacy (“SEC Study”).110 In the SEC 

Study, the lack of financial literacy among investors was even more pronounced among 

women, African-Americans, Hispanics, seniors and those with less formal education.111

The FINRA Investor Education Foundation’s 2016 study of investors in the United States 

also had similar findings where the average score of investors who took an investor literacy 

105. National Defense Authorization Act for Fiscal Year 2016, Pub. L. No. 114-92, 129 Stat. 726, sections 631-635; available at: 

U.S. Department of Defense, Uniformed Services Blended Retirement System website, available at: https://militarypay.defense.gov/

blendedretirement/. 

106. U.S. Department of Defense, Uniformed Services Blended Retirement System website, available at: https://militarypay.

defense.gov/blendedretirement/.

107. Id at 17.

108. Brown, Jennifer Erin, Saad-Lessler, Joelle, and Oakley, Diane, “Retirement in America: Out of Reach for Working 

Americans?”, National Institute on Retirement Security, September 2018, available at: https://www.nirsonline.org/wp-content/

uploads/2018/09/SavingsCrisis_Final.pdf.

109. Id at 15.

110. U.S. Securities and Exchange Commission, “Study Regarding Financial Literacy Among Investors”, e 2012, available at: 

https://www.sec.gov/news/studies/2012/917-financial-literacy-study-part1.pdf.

111. Id. 
Section 2: Coordination of Programs and Policy Proposals for High Impact 35

quiz could correctly answer only 4.4 out of 10 questions.112 These findings highlight the 

need for investor education programs that address basic concepts, including interest and 

inflation, the difference between stocks and bonds, and diversification. 

The SEC Study also looked at research indicating that investors have a “lack of critical 

knowledge of ways to avoid investment fraud.” Financial losses associated with investment fraud topped $47 million dollars in losses in 2017, with over 15,000 complaints.113

Thirty-five percent of fraud victims responding to a 2017 FINRA Investor Education 

Foundation study reported that it was “hard or somewhat hard” for them to meet their 

obligations as a result of the fraud.114 The FINRA Study also found that only 14 percent of victims reported the incident to a federal, state or local authority. In fact, 39.3 

percent of victims did not tell anyone about the fraud, with the most common reason 

stated being that they “didn’t think it would do any good.”115 It should be noted that 

there are a considerable number of federal agencies performing intake of actual or suspected fraudulent activity, including the CFPB, FTC, Internal Revenue Service (IRS), 

SEC, FDIC, Office of the Comptroller of the Currency (OCC), Department of Justice 

(DOJ), DOL and the Commodity Futures Trading Commission (CFTC). 

The SEC is the primary federal agency responsible for providing information on 

understanding investments and the operation of the securities markets and avoiding 

investment fraud. The SEC’s Office of Investor Education and Advocacy produces 

educational materials, conducts seminars and other events, and partners with state 

and federal agencies, consumer groups and investor education providers. The CFTC’s 

Office of Customer Education and Outreach administers the CFTC’s education initiatives and focuses on fraud involving commodities, which include foreign exchange 

and digital assets, or other violations of the Commodity Exchange Act. The SEC and 

the CFTC each enable investors to check the background of an investment or financial professional and file complaints. Neither agency provides advice but can distribute information to empower investors to make informed decisions and avoid fraud. 

Many Americans do not have confidence investing in financial markets, particularly after the Great Recession.116 Investor education may help address these concerns by building knowledge about how to invest soundly. Researchers have found 

that major market events can impact people’s perceptions and financial behaviors for 

years to come, especially for people who are young adults at the time. Thus, those who 

112. FINRA Investor Education Foundation, “Investors in the United States 2016”, 2016, available at: https://www.

finrafoundation.org/sites/default/files/NFCS_2015_Inv_Survey_Full_Report_0_0_0.pdf.

113. Federal Trade Commission, Consumer Sentinel Data Book 2017, available at: https://www.ftc.gov/policy/reports/

policy-reports/commission-staff-reports/consumer-sentinel-network-data-book-2017/main.

114. DeLiema, Marguerite; Mottola, Gary, Deevy, Martha. “Findings from a Pilot Study to Measure Financial Fraud in the 

United States”, Stanford Center on Longevity and the FINRA Investor Education Foundation, February 2017, available at: 

http://162.144.124.243/~longevl0/wp-content/uploads/2017/02/SCL-Fraud-Report-Feb-2017_Draft2.pdf .

115. Id.

116. Palmer, Kimberly, “Why Millennials are Scared to Invest,” US News & World Report, October 31, 2014, available at: https://

money.usnews.com/money/blogs/alpha-consumer/2014/10/31/why-millennials-are-scared-to-invest.
36 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

witness a stock market crash are more likely to avoid investing in the future. 117 This 

seems to be the case for the Great Recession of 2008. For example, a recent survey 

by BlackRock found that more than 30 percent of Americans who were not investing were “afraid of losing everything.”118 A 2014 survey found that one-third of Baby 

Boomers and 40 percent of Millennials did not think the stock market was the best 

place to invest for retirement.119 Similarly, a 2018 survey of Millennials (born 1981-

1996) found that only 17 percent were “optimistic about the financial markets.”120

Investor education can help more people understand the risks and advantages of 

investing, and how to take steps to invest in ways that are informed and appropriate.121

The SEC and CFTC both have outreach programs focused on reducing the amount 

of investment fraud. According to the self-assessment conducted by the SEC and 

CFTC of their programs they did not indicate any performance metrics used by their 

agencies to measure the impact of their investor education programs on changing 

investor behavior or reducing the amount of investment fraud. 

Issues and Recommendations

Metrics and Accountability for Retirement Savings and Investor Education

The DOL, SEC, CFTC and a number of other agencies have activities that help 

Americans plan, save and invest for retirement, and also avoid frauds and scams with 

their investments. However, given its importance, better coordination could improve 

the outcomes for federal activities in this area. 

Recommendation

Treasury recommends the DOL in its role on the FLEC Executive Committee and 

leading the Retirement Savings and Investor Education Working Group should have 

the responsibility for coordinating the FLEC’s activities related to retirement planning, savings and investor education and have accountability for reporting on those 

activities. Treasury also recommends that the outcome measures such as those in 

Exhibit C be considered for adoption to measure the impact of financial literacy and 

education efforts on basic retirement savings and investor education.

117. Malmendier, Ulrike and Nagel, Stefan , “Depression Babies: Do Macroeconomic Experiences Affect Risk Taking?”, 

The Quarterly Journal of Economics, Vol. 126, No. 1, February 2011, pp. 373-416, available at: https://www.jstor.org/

stable/23015670?seq=1#metadata_info_tab_contents; for a summary, see: LaPlante, Alice, “Stefan Nagel: How Personal Experience 

Affects Investment Behavior”, Insights by Stanford Business, February 1, 2011, available at: https://www.gsb.stanford.edu/insights/

stefan-nagel-how-personal-experience-affects-investment-behavior.

118. BlackRock, Inc., “BlackRock Global Investor Pulse: The World’s Largest Study on the Relationship Between Wealth and 

Well-Being,” website, 2019, https://www.blackrock.com/corporate/insights/investor-pulse#barrier-losing-everything). 

119. Wells Fargo Bank N.A., “2014 Wells Fargo Millennial Study,” 2014, available at: https://www.myirionline.org/docs/defaultsource/research/click-here.pdf?sfvrsn=0). 

120. FINRA Investor Education Foundation, “Uncertain Futures: 7 Myths about Millennials and Investing”, October 2018, 

available at: https://www.finrafoundation.org/sites/default/files/Uncertain-Futures-Issue-Brief-7-Myths-about-Millennials-andInvesting_1_0.pdf.

121. U.S. Securities and Exchange Commission, “Five Questions to Ask Before You Invest,” available at: https://www.investor.

gov/research-before-you-invest/research/five-questions-ask-before-you-invest.
Section 2: Coordination of Programs and Policy Proposals for High Impact 37

Coordination among Agencies

A critical aspect of the federal government’s work in preparing people for retirement 

is the SSA’s Old Age Insurance Program,122 and SSA should continue to encourage 

Americans to understand their benefits, ensure that reporting is accurate and engage 

with SSA through my Social Security123 and the Social Security Statement.124 To ensure 

that Americans view SSA as only one of the pillars of the retirement system,125 it is 

important that agencies coordinate to capitalize on opportunities to inform Americans 

about the other two legs of the stool—especially the importance of their own retirement savings. Cross training of staff and shared materials and messages on my Social 

Security can help Americans have a more complete view of planning for retirement.126

OPM and DoD also support retirement education related to the TSP and the BRS, and 

HHS has a retirement program that serves primarily lower-income seniors, especially 

women, through a grant to the National Education and Resource Center on Women 

and Retirement. Coordination among agencies could enhance consistency, efficiency and 

effectiveness of their retirement savings programs, especially as they relate to the TSP. 

Recommendations

Treasury recommends SSA coordinate with other agencies on retirement matters 

related to Social Security, with an emphasis on ways to capitalize on SSA’s established 

networks with specific populations or intermediaries. Treasury also recommends that 

OPM and DoD coordinate with other agencies to improve the quality of financial 

education on retirement savings and related topics provided to federal employees and 

military service members. Finally, Treasury recommends that HHS and DOL/EBSA 

continue to collaborate on ensuring their resources are consumer-friendly and effective in reaching their target populations.

Housing Counseling

For most Americans, housing related financial decisions are among the most consequential and complex that they will make in their lives. These decisions include, but 

are not limited to: whether to rent or to buy, geographic location, and affordability. 

Buying a home consists of additional decisions, such as how to finance a purchase, 

122. Social Security Administration, “Social Insurance Programs”, available at: https://www.ssa.gov/policy/docs/progdesc/sspus/oasdi.pdf.

123. Social Security Administration, “Create your personal my Social Security account today,” available at: https://www.ssa.gov/

myaccount/?utm_source=offsite&utm_medium=referral&utm_campaign=ocomm-eservices-fy19&utm_content=eservice.

124. Social Security Administration, Your Social Security Statement, available at: https://www.ssa.gov/myaccount/assets/materials/

SSA-7005-SM-SI%20Wanda%20Worker%20Near%20retirement.pdf.

125. Traditionally, the three pillars are described Social Security, employer-sponsored plans, and individuals’ savings and 

investments. See, for example Dodaro, Gene L. “The Nation’s Retirement System: A Comprehensive Re-evaluation Needed to 

Better Promote Future Retirement Security,”Testimony Before the Special Committee on Aging, U.S. Senate, US Government 

Accountability Office, February 6, 2019, available at: https://www.gao.gov/assets/700/696766.pdf. Increasingly, continuing to work 

is seen as a “fourth pillar,” see for example: Baily, Martin Neil and Harris, Benjamin H., “Working Longer Policies: Framing the 

Issues,” Economic Studies and Brookings and Northwestern Kellogg School of Management, January 2019, available at: https://

www.brookings.edu/wp-content/uploads/2019/01/ES_20180124_Harris-Baily-Retirement-Proposals1.pdf.

126. See for example: Consumer Financial Protection Bureau, “Planning for Social Security claiming tool, “ webpage, available at: 

https://www.consumerfinance.gov/consumer-tools/retirement.
38 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

what down payment to provide, how to cover taxes and required insurance, and other 

insurance or resources needed to protect against future expenses. Further, homeowners face financial decisions in their ownership like whether and when to refinance, or 

whether and how to use their home equity. 

Housing counselors play a key role in supporting consumers throughout the home 

buying and foreclosure prevention processes. Housing counselors assist consumers by reviewing the consumer’s entire income, expense, credit and debt profile, and 

providing them with information to make sound decisions about sustainable home 

buying and foreclosure prevention options. HUD is the leading federal agency supporting the availability of housing counseling. Through the HCP, HUD provides 

grants that support a nationwide network of approved housing counseling agencies 

(HCAs). The HCP enables potential and current renters and homeowners to get 

the counseling they need to be informed about making responsible housing choices.127 Eligible housing counseling activities can include rental, default, homeownership, homeless and reverse mortgage counseling for senior homeowners. Under 

the HCP, HUD approves HCAs who then employ HUD-certified counselors who 

provide counseling to almost 1.2 million households annually.128

There is consistent and increasing evidence that suggests that housing counseling can be 

beneficial in many ways. Pre-purchase housing counseling can help a potential homebuyer to, among other things, increase savings, reduce debt, and improve credit scores. 

In 2012, HUD presented a seminal report on the effectiveness of pre-purchase housing 

counseling.129 Most participants in the study were planning to purchase a home within 

one year and were actively seeking homebuyer assistance programs and counseling. The 

study tracked those participants about a year after they received pre-purchase housing 

counseling. Results of the study strongly suggest that pre-purchase housing counseling 

helped a relatively diverse group of low- to moderate-income consumers obtain useful information about how to find a home, finance a home, help with budgeting, and 

improve credit scores. Following up on the 2012 study, HUD launched a long-term randomized research demonstration130 in 2014 to assess the impact of homebuyer education and counseling to more than 5,800 low and moderate income, and middle-income 

prospective first-time homebuyers in 28 U.S. metropolitan areas. Currently in progress, 

127. U.S. Department of Housing and Urban Development, “Housing Counseling Assistance Program Description”, webpage, 

available at: https://www.hudexchange.info/programs/housing-counseling/program-description/.

128. U.S. Department of Housing and Urban Development, “Housing Counseling Assistance 2018 Summary Statement and 

Initiatives”, available at: https://www.hud.gov/sites/documents/28-HSNGCASSIST.PDF.

129. U.S. Department of Housing and Urban Development, Office of Policy Development and Research, “Pre-Purchase 

Counseling Outcome Study: Research Brief, Housing Counseling Outcome Evaluation”, 2012, available at: https://www.huduser.

gov/publications/pdf/pre_purchase_counseling.pdf.

130. U.S. Department of Housing and Urban Development, Office of Policy Development and Research “The First-Time 

Homebuyer Education and Counseling Demonstration Baseline Report”, 2017, available at: https://www.huduser.gov/portal//

portal/sites/default/files/pdf/First-Time-Homebuyer-BaselineReport.pdf.
Section 2: Coordination of Programs and Policy Proposals for High Impact 39

the early insights from the demonstration indicated that it will add to the research that 

housing counseling does provide a positive benefit to the homebuyer.131

Post-purchase mortgage default or foreclosure prevention counseling has also shown 

positive effects by helping homebuyers avoid being delinquent in payments and providing assistance and remedies should they become delinquent. In an evaluation of a 

national counseling program aimed at preventing foreclosure, researchers found that 

struggling homeowners who received housing counseling were more likely to receive 

a mortgage loan modification and to keep their homes than a matched comparison 

group of similar non-counseled homeowners.132

Housing counseling has been shown to help homebuyers make successful decisions to 

buy and keep their home and avoid scams.133 The availability of housing counseling is 

especially valuable to lower income, minority and first-time homebuyers. Studies have 

shown that pre-purchase housing counseling bolsters a consumer’s long-term housing 

and financial success by increasing savings, reducing debt, and raising credit scores.134

HUD-approved HCAs also provide counseling to homeowners in post-foreclosure 

scenarios to assist the consumer in repairing and rebuilding their financial well-being. For example, in default and foreclosure prevention, homeowners working with 

housing counselors are more engaged and have a better understanding of the options 

available to them, which therefore leads to more sustainable outcomes for all and a 

better understanding of the terms of the assistance provided.135

HUD-approved HCAs receiving grant funding report limited data to HUD on their 

education and counseling activities including demographic characteristics, income 

level, counseling type, and counseling income. HCAs do not report post-counseling 

outcomes, thus, HUD is unable to determine if there are demonstrable year-overyear effects. For example, the data collected from HCAs receiving grant funding could 

show if a client successfully purchased a home, but not if the client was able to sustain homeownership. Without that long-term, year-over-year data, it is difficult for 

HUD to assess whether any particular HCA, let alone a specific counselor, is effective. 

131. Per Gerecke, Sarah S. and Myhre,Marina L., “HUD’s Housing Counseling Program: The Importance of Research and 

Metrics,” Presentation to the Financial Literacy and Education Commission, October 4, 2018, available at: https://home.treasury.

gov/system/files/231/HUD%20Presentation.pdf.pptx. 

132. Temkin, Kenneth M., Mayer, Neil S., Calhoun, Charles A. and Tatian, Peter A., “National Foreclosure Mitigation Counseling 

Program Evaluation: Final Report”, The Urban Institute, September 2014, available at: http://www.neighborworks.org/Documents/

HomeandFinance_Docs/Foreclosure_Docs/ForeclosureCounseling%28NFMC%29_Docs/2014_NFMC_UrbanInstituteReport.aspx. 

133. Temkin, Kenneth M., Mayer, Neil S. Calhoun, Charles A. and Tatian, Peter A. “National Foreclosure Mitigation 

Counseling Program Evaluation: Final Report, Rounds 3 through 5,” prepared for NeighborWorks America, The Urban 

Institute, September 2014, available at http://www.neighborworks.org/Documents/HomeandFinance_Docs/Foreclosure_Docs/

ForeclosureCounseling%28NFMC%29_Docs/2014_NFMC_UrbanInstituteReport.aspx; U.S. Department of Housing and Urban 

Development, Office of Policy Development and Research, “Foreclosure Counseling Outcome Study: Final Report, Housing 

Counseling Outcome Evaluation,” 2012, available at: https://www.huduser.gov/portal//publications/pdf/foreclosure_counseling_v2.pdf. 

134. Li, Wei, Bai, Bing, Goodman, Laurie, and Zhu, Jun, “Neighborworks America’s Homeownership Education and 

Counseling: Who Receives It and Is It Effective?”, The Urban Institute, September 2016, available at: http://www.urban.org/sites/

default/files/2000950-neighborworks-americas-homeownership-education-and-counseling-who-receives-it-and-is-it-effective.pdf.

135. Collins, J. Michael and Schmeiser, M. D, “The effects of foreclosure counseling for distressed homeowners”, Journal of Policy 

Analysis and Management 32, no.1, 83-106, 2013, available at: http://onlinelibrary.wiley.com/doi/10.1002/pam.21670/epdf.
40 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Despite these limitations on data, HUD is one of the few agencies that has made 

rigorous attempts to study the impact of its programs. HUD’s longitudinal study, 

described above, is expected to provide data and information that can guide future 

housing counseling efforts. By conducting a long-term study, the data should be able 

to indicate if the current housing counseling efforts have provided a lasting positive 

effect on the clients such as a reduction in mortgage defaults. 

Resources can be better leveraged to expand the reach of housing counseling beyond 

HUD’s funding. Mortgage lenders, servicers, and investors have demonstrated a willingness to support housing counseling through the adoption of pilot programs that 

fund foreclosure prevention counseling or provide incentives for the use of pre-purchase counseling. Examples of pilots for pre-purchase housing counseling include the 

use of incentives such as an interest rate discount for homebuyers who receive housing 

counseling on low-down payment loans or a $500 loan-level price adjustment credit 

for lenders whose buyers received customized assistance from HCAs.136

Financial education can also be delivered through rental housing. Affordable rental 

housing providers have long focused on wrap-around social services for their residents, such as basic education, job readiness, or physical wellness.137 However, integrating financial education into housing programs provides consumers with a more 

holistic approach to improving their overall financial health. Consumers are able to 

develop an approach that meets their specific and immediate concerns (just-in-time 

counseling) and take action based on their financial education.138

Affordable rental housing programs continue to use a variety of tools to help their 

households set goals and stick with a course to obtain those goals, including providing credit-building payments, setting up direct deposit and automatic bill pay, and 

free tax preparation.139 In addition, by setting up and maintaining regular payments, 

consumers are more likely to avoid late payments and possibly eviction.140

Issues and Recommendations

Metrics and Accountability for Housing Counseling

Housing counselors play a key role in helping consumers make sound decisions about 

sustainable home buying and contribute to foreclosure prevention. HUD is the leading federal agency supporting the availability housing counseling. Through its HCP, 

136. Fannie Mae, “HomeReady Mortgage: Built for Today’s Home Buyers”, available at: https://www.fanniemae.com/content/fact_

sheet/homeready-overview.pdf.

137. Stewards of Affordable Housing for the Future, “Housing as a Platform for Improving Financial Capability”, 2014, available 

at: https://www.sahfnet.org/sites/default/files/uploads/housing_as_a_platform_for_financial_capability_-_final_report.pdf.

138. Id.

139. Garrison, Sonia and Gorman, Lucy, “Building a Strong Foundation: A Field Scan on Integrating Financial Capability 

and Affordable Housing”, Center for Community Capital, 2017, available at: https://communitycapital.unc.edu/files/2018/01/

UNC_CCC_Field-Scan_Layout_R4.pdf. 

140. Id. at 137.
Section 2: Coordination of Programs and Policy Proposals for High Impact 41

HUD provides grant funding that supports a nationwide network of HUD-approved 

HCAs. HUD and others have conducted research that shows the benefits of pre-purchase and post-purchase housing counseling. 

Recommendations

Treasury recommends that HUD in its role on the FLEC Executive Committee and 

leading the Housing Counseling Working Group should have the responsibility for 

coordinating the FLEC’s activities related to housing issues and have accountability 

for reporting on those activities. Treasury also recommends that the outcome measures such as those in Exhibit C be considered for adoption to measure the impact of 

financial literacy and education efforts.

Access to Housing Counseling

In addition to the traditional in-person housing counseling, technology can be used to 

expand the reach of housing counseling, including reaching speakers of English as a 

second language and people in remote rural areas. In one example, a telephone hotline 

provides foreclosure prevention and homebuyer assistance to address the needs of large 

numbers of consumers.141 Other means such as online education modules or mobile apps 

may also bridge the access gap. While such models can expand access to housing counseling, it is important to ensure that the quality of 

service is not impaired by remote delivery. 

Another way to expand access to housing counseling, and expand the reach beyond HUD’s 

funding, is to better leverage private sector and 

state and local governments. For example, some 

first time buyer programs have a requirement 

for housing counseling. 

Recommendations

In addition to face-to-face housing counseling, 

Treasury supports the use of online counseling, 

telephone hotlines, applications and other technologies to “meet consumers where they are” 

and to provide assistance to more people. 

Treasury recommends that mortgage lenders, servicers, investors and state and local governments continue to explore opportunities to 

incorporate housing counseling into their lending and servicing strategies. 

141. Homeownership Preservation Foundation, “Hope, home and homeownership in changing times: Community 

Report 2017”, available at: https://ik9b13uto1f418ubu13ibds9-wpengine.netdna-ssl.com/wp-content/uploads/2018/08/

GP112214HPFannualreport2017.pdf.

Source: “The First-Time Homebuyer Education and Counseling Demonstration 

Baseline Report”, Department of Housing and Urban Development, Office of 

Policy Development and Research, 2017, available at: https://www.huduser.gov/

portal//portal/sites/default/files/pdf/First-Time-Homebuyer-BaselineReport.pdf

Expressed Preference 

of Counseling Type 

for Participants 

Given an Option

Remote Counseling

In-Person

Counseling
42 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Financial Education and Affordable Rental Housing

Integrating financial education into housing programs provides households with a 

more holistic approach to improving their overall financial health. Households are 

able to develop an approach that meets their specific and immediate concerns (justin-time counseling) and take action based on their financial education.142

Recommendations

Treasury recommends that HUD and affordable rental housing providers continue 

to integrate financial education into the services provided to their residents, either 

directly or through partnerships, as feasible. 

Postsecondary Education

Experts and stakeholders agree that building financial knowledge and skills early in 

life is an important step toward greater financial ability in adulthood. There are key 

opportunities to help children and youth build financial skills through school, through 

after school and community programs (including jobs), and through postsecondary 

education. Adults seeking postsecondary education should also be given an opportunity to improve their financial capability. 

Over the last few decades more and more Americans have sought a postsecondary 

degree as a pathway to higher income and greater financial stability.143 As the cost of 

college continues to rise, students and their families have increasingly relied on debt 

to finance a postsecondary education. This means that millions of students take on 

substantial obligations each year, sometimes without understanding the loan products and their repayment responsibilities. 

ED’s Federal Student Aid (FSA) office provides financial education resources related 

to financial decisions about a postsecondary education.144 The studentaid.gov website 

topics include understanding the cost of postsecondary education, understanding and 

taking action around federal student aid (loans and grants), and managing student aid 

(including loan repayment). FSA’s resources provide comprehensive information, tools, 

and links about colleges and how to prepare for college (financially and academically), 

types of aid, and loan repayment. The site also serves as portal for the Free Application 

for Federal Student Aid (FAFSA) and loan management websites. Users include students, their families and others who help students, such as high school guidance counselors. FSA reports approximately 19 million FAFSA applicants annually. In addition 

to the website, resources are available through social media, including Twitter, Facebook 

and YouTube. FSA has recently released a mobile version of the FAFSA form. 

142. Id. at 137. 

143. In 2016–2017, higher education institutions enrolled full-time-equivalent enrollment totaling about 16.3 million students: 

roughly 14.2 million undergraduates and approximately 2.0 million graduate students. See: U.S. Department of Education, 

National Center on Education Statistics, “Postsecondary Institutions and Cost of Attendance in 2016–17; Degrees and Other 

Awards Conferred, 2015–16; and 12-Month Enrollment, 2015–16”, available at: https://nces.ed.gov/pubs2017/2017075rev.pdf.

144. U.S. Department of Education, “Office of Federal Student Aid”, website available at: https://studentaid.ed.gov.
Section 2: Coordination of Programs and Policy Proposals for High Impact 43

FSA also offers resources for guidance counselors and others that help students prepare for postsecondary education. These include FinancialAidToolkit.ed.gov, which 

includes a variety of documents such as financial aid event materials, presentations, 

brochures, videos, and sample tweets and Facebook posts. Outreach on these resources 

is conducted to key groups such as minority-serving postsecondary institutions and 

ED grantees that serve low-income high school students. 

Pursuant to the Higher Education Opportunity Act,145 FSA requires that federal 

student loan borrowers receive entrance counseling and exit counseling. Entrance 

counseling is for first time student loan borrowers and can be delivered in person, by 

audiovisual presentation or by interactive electronic means, but a financial aid expert 

must be available for questions. Exit counseling is required when a student graduates, 

leaves school, or drops below half-time enrollment. Exit counseling may be delivered 

in person, online, and in some cases, by mail. In 2017 nearly 3.8 million students completed entrance counseling and 5.5 million completed exit counseling.146 However, 

FSA does not have data on the effectiveness of this counseling. 

In addition to ED, CFPB’s Section for Students and Young Consumers currently has 

a function of empowering students, young people and their families to make more 

informed financial decisions about saving and paying for college, accessing safer and 

more affordable financial products, and repaying student loan debt. These functions are 

currently under the CFPB’s Office of Financial Education, which is required under the 

Dodd-Frank Act to implement a strategy, in consultation with the FLEC, to “prepare 

the consumer for educational expenses and the submission of financial aid applications, 

and other major purchases.”147 The CFPB, per the Dodd-Frank Act, also has a Private 

Education Loan Ombudsman whose responsibility it is to provide timely assistance to 

borrowers and potential borrowers to resolve complaints involving private education 

loans, and compile and analyze data on borrower complaints regarding private education loans.148 CFPB and ED collaborated to develop a number of online informational 

resources about student loans and related topics, including CFPB’s Paying for College 

tools and student financial guides.149 Additionally, some activities of federal student loan 

servicers and private student lenders (and their servicers) are supervised by the CFPB. 

While ED and CFPB have resources available, helping students and their families 

avoid the pitfalls associated with financing higher education should be a priority for 

institutions of higher education. The cost of higher education can be difficult to understand due to the lack of transparency, confusion regarding loan repayment options and 

responsibilities, and the failure of borrowers to comprehend long-term implications of 

145. 20 U.S.C. § 1092.

146. Information provided by U.S. Department of Education, Federal Student Aid as part of data collection for this report. 

147. Dodd-Frank Act § 1013(d)(2)(D)(i).

148. Dodd-Frank Act § 1035.

149. See Consumer Financial Protection Bureau, “Paying for College”, website, available at: https://www.consumerfinance.gov/

paying-for-college/.
44 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

borrowing. The difficulty may be compounded due to lack of relevant, transparent and 

timely information. Notably, financial aid offer letters (sometimes known as award letters) and annual debt notification letters (debt letters) are effective tools in communicating an individual’s cost of college and financing options, so that students and families 

are empowered to make comprehensive and informed decisions. 

Despite a number of efforts to improve clarity in recent years, colleges and universities 

have been found to provide unclear information to students and families about the cost 

of college and aid available in their “financial aid award letters,” including failing to distinguish between grants and loans that need to be repaid.150 This makes it hard for students to compare offers from different institutions and may contribute to their lack of 

understanding about loan obligations. Based on expert research and analysis, a number of best practices have been identified to improve this information. These include: 

presenting an itemized and sub-totaled cost of attendance; differentiating aid offers 

by type; highlighting critical details and distinctions per aid type; calculating the cost 

after grants and scholarships are applied; not including Parent PLUS loans as part of 

student’s loan package; and providing actionable next steps.151 ED’s FSA has recently 

issued an announcement to financial aid offices on such practices to avoid.152

Debt letters are issued annually to students by some institutions of higher education to 

summarize what students have borrowed to date and how much they can expect to pay 

once they graduate. Although there is no requirement under federal law to provide debt 

letters to students, twelve states have passed legislation to create mandates for student debt 

letters.153 Debt letters were created based on a growing body of research that suggests that 

students do not receive or digest a sufficient amount of information regarding their student 

loans. For example, since Indiana University introduced debt letters along with other financial literacy strategies, the institution has seen the student loan volume for undergraduates 

decrease by 24.6 percent, or $99.2 million.154 Other tests of debt letters have demonstrated 

other useful outcomes, even when reducing debt is not the primary concern.155

150. Keane, Laura, “Reauthorizing the Higher Education Act: Financial Aid Simplification and Transparency, ” Testimony to 

U.S. Senate Committee on Health, Education, Labor and Pensions, January 18, 2018; Burd, Stephen, Fishman, Rachel, Habbert, 

Julie, Keane, Laura, Barret, Ben, Dancy, Kim, Nguyen, Sophie, and Williams, Brendan, “Decoding the Cost of College: The Case 

for Transparent Award Letters”, New America and uAspire, 2018, available at: https://www.uaspire.org/BlankSite/media/uaspire/

Decoding-the-Cost-of-College.pdf; National Association of Student Financial Aid Administrators, “Issue Brief: Financial Aid 

Award Notifications”, September 2018, available at: https://www.nasfaa.org/issue_brief_award_notifications.

151. Taylor, Z. W., & Bicak, I., “What is the FAFSA? An adult learner knowledge survey of student financial aid jargon,” Journal 

of Adult and Continuing Education, 1-19, 2019, available at: https://doi.org/10.1177/1477971418824607.

152. Federal Student Aid, “Recommendations” What Postsecondary Institutions Should Work to Avoid When Issuing Financial 

Aid Offers,” April 15, 2019, available at: https://ifap.ed.gov/eannouncements/041519RecWhatPostInstShouldWork2Avoid.html.

153. Attigo, “Student Debt Letter Requirements Panorama”, January 2019, available at: https://cdn2.hubspot.net/hubfs/4289644/

Debt%20Letter%20Resources/Student-Debt-Letter-Requirements-Panorama-handout.pdf.

154. Indiana University, “Amounts and numbers of student loans at Indiana University continue to fall”, October 2018, available 

at: https://news.iu.edu/stories/2018/10/iu/releases/11-amounts-numbers-student-loans-indiana-university-continue-to-fall.html.

155. Marx, Benjamin M. and Turner, Lesley J., “The Benefits of Borrowing: Evidence on Student Loan Debt and Community 

College Attainment,” EducationNext, Winter 2019, vol. 19, no.1, available at: https://www.educationnext.org/benefits-ofborrowing-evidence-student-loan-debt-community-college-attainment/; Darolia, Rajeev, et al., “The (false) promise of college 

student loan debt letters,” Brown Center Chalkboard, Brookings, December 5, 2017, available at: https://www.brookings.edu/blog/

brown-center-chalkboard/2017/12/05/the-false-promise-of-college-student-loan-debt-letters/.
Section 2: Coordination of Programs and Policy Proposals for High Impact 45

Youth Financial Capability

156. Consumer Financial Protection Bureau, “Building blocks to help youth achieve financial capability”, September 2016, available at: https://www.

consumerfinance.gov/data-research/research-reports/building-blocks-help-youth-achieve-financial-capability/.

157. Urban, Carly, et al., “State Financial Education Mandates: It’s All in the Implementation”, FINRA Investor Education Foundation, Insights: Financial 

Capability, January, 2015, available at: https://www.finra.org/sites/default/files/investoreducationfoundation.pdf.

158. Kasman, Matt, Heubeger, Benjamin, and Hammond, Ross A., “A Review of Large-Scale Youth Financial Literacy Education Policies and Programs”, 

The Brookings Institution, October 2018, available at: https://www.brookings.edu/wp-content/uploads/2018/10/ES_20181001_Financial-Literacy-Review.pdf.

159. Next Gen Personal Finance, “Who has access to financial education in America today? A nationwide study of 13 million students across 11,000 high schools”, 

2017, available at: https://www.ngpf.org/blog/personal-finance/ngpf-research-report-finds-that-only-1-in-6-high-school-students-nationwide-required-to-takepersonal-finance-course-to-graduate/.

160. Id at 156.

161. Wiedrich, Kasey, Collins, J. Michael, et al., “Financial Education & Account Access Among Elementary Students: Findings from the Assessing 

Financial Capability Outcomes (AFCO) Youth Pilot,” CFED, April 2014, available at: https://www.treasury.gov/resource-center/financial-education/Documents/

Financial%20Education%20%20Account%20Access%20Among%20Elementary%20Students%20Findings%20from%20the%20Assessing%20Financial%20

Capability%20Outcomes%20You....pdf.

162. Consumer Financial Protection Bureau, “Youth Financial Education”, website,available at: https://www.consumerfinance.gov/practitioner-resources/

youth-financial-education/.

163. Federal Deposit Insurance Corporation, “Teacher Online Resource Center”, website, available at: https://www.fdic.gov/consumers/education/torc/.

164. National Credit Union Administration, “Test Your Financial Knowledge!” My Credit Union, website, available at: https://www.mycreditunion.gov/

financial-resources/activities-apps.

165. 20 U.S.C. §§7171-7176; see also “Programs”, U.S. Department of Education, available at: https://www2.ed.gov/programs/21stcclc/index.html.

Building the financial decision-making knowledge 

and skills of youth before they finish high school 

enables them to make informed choices about 

their postsecondary choices and throughout their 

lives.156 For example, a recent study found that 

three states that rigorously implemented high 

school financial education mandates had higher 

credit scores and had lower delinquency rates 

on consumer credit among young adults past 

graduation compared to similar states without 

mandates.157 Despite this evidence, just over 16 

percent of high school students were required to 

take financial education courses and only 65 percent of high schools have a course available.158

Low-income students were half as likely to attend 

school with a personal finance mandate.159

In addition to courses, hands-on learning 

opportunities help youth build skills and confidence in financial decision making.160 For example, an assessment of financial education and 

access to a school bank or credit union in elementary school was found to improve financial 

knowledge and positive attitudes toward financial behavior.161

Education of children and youth is the primary 

responsibility of families and communities, often 

implemented through state and local governments. The federal government’s role is generally to provide resources and support that can be 

used at the discretion of these parties. A number 

of agencies include general resources on these 

topics on their websites, including the following:

• CFPB provides tools to parents, including consumer-friendly explanations and activities for 

parents and children. 162

• The FDIC hosts a teacher resource center, which provides Money Smart for Young 

People curriculum and lesson plans for students in Kindergarten to Grade 12 and complementary Parent/Caregiver Guides.163

• The National Credit Union Administration’s 

(NCUA) website has two games for youth, one 

for young children and another for older youth.164

• ED may provide support to financial education through its programs that support educational outcomes more generally, for example, 

through the 21st Century Community Learning 

Centers program grants to states, which can 

be used for financial literacy programs.165

However, ED can only estimate and not specifically track these uses. 
46 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Issues and Recommendations

Metrics and Accountability for Postsecondary Education

There are at least six166 agencies with programs or resources geared to youth and students; however, ED is the primary agency with responsibility for post-secondary 

education and student loan issues under the Higher Education Act. ED tracks additional information, including using website analytics such as user surveys, social media 

followers and the percentage of high school seniors who file a FAFSA form (both 

the first time, and in subsequent years). On the other end of the borrowing process, 

ED tracks colleges’ cohort default rates (measuring the success of students in loan 

repayment). 

Recommendations

Treasury recommends that ED in its role on the FLEC Executive Committee and 

leading the Postsecondary Education Working Group, should have the responsibility 

for coordinating the FLEC’s activities related to postsecondary education and have 

accountability for reporting on those activities. Treasury also recommends that the 

outcome measures such as those in Exhibit C be considered for adoption to measure 

the impact of these efforts. 

Financial Aid Offers

Financial aid offers can be a powerful tool to promote financial literacy and skill development for students when they clearly communicate the consumer information to 

enable them to make a college investment decision.167 Additionally, the information 

can serve as a financial literacy tool that can assist students and families with planning and paying for college and beyond. 

Recommendations 

Institutions of higher education should ensure that their financial aid offer letters are 

clear, timely and customized, and provide students with a clear sense of their investment and borrowing obligations.168 Higher education institutions should consider 

developing and testing additional interventions to improve students’ comprehension 

of options for paying for college.

166. ED, CFPB, FDIC, NCUA, HHS, and DOL, at a minimum, based on information provided by agencies in the preparation 

of this report. 

167. National Association of Student Financial Aid Administrators, “Issue Brief: Financial Aid Award Notifications”, September 

2018, available at: https://www.nasfaa.org/issue_brief_award_notifications.

168. See, Consumer Financial Protection Bureau, Paying for College, available at https://www.consumerfinance.gov/

paying-for-college/
Section 2: Coordination of Programs and Policy Proposals for High Impact 47

Youth and Adults Involved With the Criminal Justice System

169. U.S. Department of Justice, “Returning Citizens & Reentry” website, available at: https://www.justice.gov/usao-ndwv/returning-citizens-reentry.

170. McClean, Rachel L., and Thompson, Michael D., “Repaying Debts Report”, Council of State Governments Justice Center, 2007, available at: https://

csgjusticecenter.org/nrrc/publications/repaying-debts-summary/.

171. U.S. Department of Justice Office of Juvenile Justice and Delinquency Prevention, “Data Snapshot: Arrest Characteristics of Older Juveniles and Young 

Adults”, January 2019, available at: https://www.ojjdp.gov/ojstatbb/snapshots/DataSnapshot_UCR2017.pdf.

172. “Points of Intervention”, website, available at: https://youth.gov/youth-topics/juvenile-justice/points-intervention.

173. Wetzel, John E. and Wiessmann, Robin L., “Finances After Prison: A Collaborative Approach”, Pennsylvania Department of Corrections and 

Department of Banking and Securities, 2018, available at: https://www.dobs.pa.gov/For%20Media/Pages/Successful-Reentry.aspx; Hoover, Sarah, “Pa. banking 

on program providing former inmates with financial literacy”, WITF News, October 3, 2018, available at: http://www.witf.org/news/2018/10/pa-banking-onnew-program-providing-former-inmates-with-financial-savvy-to-succeed.php.

174. Consumer Financial Protection Bureau, “Companion Guides”, webpage, available at: https://www.consumerfinance.gov/practitioner-resources/

your-money-your-goals/companion-guides/.

Many states are embracing financial education of 

incarcerated individuals as a way to help people 

successfully reintegrate into society and avoid 

further incarceration. The approximately 700,000 

people a year released from prisons and jails169

face an array of financial challenges, including 

court costs, restitution and legal fees, and child 

support, as well as having to make a living and 

provide for basic needs and rebuilding a credit 

score. Financial education can help people avoid 

participation in underground economies and 

instead encourage employment,170 thus decreasing the possibility of returning to the criminal justice system and re-incarceration. Additionally, 

approximately 30 percent of arrests made in 

2017 involved youth.171Interactions with youth 

involved in juvenile justice, including detention 

and detention alternatives, such as community-based programs172 could be used to connect 

youth with financial education, as well as assistance on education and jobs. 

The Pennsylvania Departments of Banking and 

Securities and Corrections are collaborating to 

provide financial education to inmates, in order 

to help them prepare for reentry into society and 

avoid re-incarceration. As of 2018 the project 

reports reaching 4,300 inmates in 26 facilities, 

focusing on the basics of transactions and 

credit. The state believes that connecting prisoners with financial education and basic financial services will reduce recidivism and increase 

employment for the 20,000 people that return to 

communities each year, noting that 73 percent of 

successful reentrants had a bank or credit union 

account compared to 39 percent of unsuccessful reentrants.173

The CFPB has developed a Companion Guide174

for its “Your Money, Your Goals” financial education series that focuses on helping returning 

citizens address financial barriers to a successful transition into society. The documents help 

people identify financial challenges to successful transition; obtain documents related to identification to help ease the transition process; 

identify and prioritize debt, including criminal justice debt; and understand individual 

rights to obtain and review background screening reports during the employment application process. The CFPB’s “Focus on Reentry” 

can be used during incarceration, while awaiting trial or sentencing, in jail or prison, or following release, along with CFPB’s other Your 

Money, Your Goals tools. The CFPB also provides assistance to organizations, such as the 

Pennsylvania Department of Corrections, to use 

the tools with their populations.
48 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Debt Letters

In addition to helping students understand how much they will have to repay, debt 

letters can be used to encourage students to seek financial counseling and prepare 

for post-college financial decisions. For example, letters can compare the student’s 

expected monthly payment with the expected monthly salary for a person with their 

degree and major. Debt letters are low-cost to deliver and can reach every student. 

Recommendations 

Institutions of higher education should provide students with annual debt letters, to 

ensure that students have a clear sense of their total borrowing obligations. State lawmakers should consider broader adoption of debt letters and a standardization of requirements. 

The FLEC has released additional recommendations and best practices for institutions of higher education in a report required by Title VI, section 603, of the Economic 

Growth, Regulatory Relief, and Consumer Protection Act (S.2155).175

Military 

By law, each Military Department is required to provide members of the armed 

forces comprehensive financial literacy training, financial counseling for members 

and spouses, and conduct an annual evaluation of the financial literacy and preparedness of the force.176 Financial education provided throughout DoD include financial 

readiness training at various points across the military lifecycle beginning with initial entry training. Training includes education on BRS with an introductory course 

in initial entry training for service members planning retirement and ending with the 

Transition Assistance Program for those preparing to leave military service. DoD also 

provides financial counseling to Service members and their families through accredited Personal Financial Managers (PFMs) and Personal Financial Counselors (PFCs), 

located DoD-wide and through on-line and telephone resources. These financial 

counselors provide one-on-one and group education. 

The DoD views financial literacy and preparedness as part of military readiness. 

To meet statutory requirements, DoD conducts an annual Status of Forces Survey 

of active duty and Reserve Component members, which includes questions on 

financial literacy and preparedness. The survey provides measures of self-assessed 

financial situation, financial goals, savings habits, financial problems, use of financial products, and knowledge of basic financial literacy concepts. The most recent 

Status of Forces Survey shows some evidence that the federal government’s investment in military financial readiness is effective, with 72 percent of active duty members considering their financial condition comfortable, and generally demonstrating 

175. Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018, Pub. L. No. 115-174, 132 Stat. 1296 (2018), 

section 603 as codified at 20 U.S.C. § 9703(a)(3) available at:https://www.congress.gov/115/bills/s2155/BILLS-115s2155enr.pdf. 

176. 10 U.S.C. § 992.
Section 2: Coordination of Programs and Policy Proposals for High Impact 49

fewer financial problems and more constructive financial habits than the population as a whole.177 Additional research has shown that military households generally have greater financial security and better financial habits than non-military 

households.178 Notably, in comparing service members to other American adults, 

the most recent Status of Forces Survey finds military members (both active duty 

and Reserve Component) to have a higher average level of “financial well-being,” 

using a metric developed by the CFPB.179 Nevertheless, recruits to the military tend 

to be younger and are in need of financial education similar to the civilian population of comparable age.

Service members receive regular financial education during their military career, culminating at separation from service. At that point, they complete the Transition to Veterans 

Financial Planning training, a four-hour DoD course designed to provide transitioning service members the knowledge necessary to complete a 12-month post-transition 

budget, as part of a larger transition assistance curriculum. Should transitioning Service 

members require additional assistance, a “warm handover” is provided to the installation PFM as an additional resource. The VA provides more than 300 Benefits Advisors 

available at all military installations180 to facilitate the transition to civilian life and help 

navigate VA benefits. VA Benefit Advisors provide 6-hour mandatory benefits briefings 

177. U.S. Department of Defense, Office of the Undersecretary of Defense for Personnel and Readiness “Annual Report on the 

Financial Literacy and Preparedness of Members of the Armed Forces: Results from the 2017 Status of Forces Survey,” January 2019.

178. Skimmyhorn, William, “FINRA Investor Education Foundation, Insights: Financial Capability”, The Financial Welfare of 

Military Households, November 2014, available at: https://www.finrafoundation.org/sites/default/files/p601704_1_0_0_0_0.pdf.

179. Id at 177. See also, Consumer Financial Protection Bureau, “Financial Well-Being in America.” September 2017, available 

at: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201709_cfpb_financial-well-being-in-America.pdf.

180. U.S. Department of Veterans Affairs, “Congressional Budget Submission, FY 2019, Volume III, VBA-162”, 2018, available 

at: https://www.va.gov/budget/docs/summary/archive/FY-2019-VA-BudgetSubmission.zip.

U.S. Adults

0 10 20 30 40 50 60 70 80 90 100

Source: Department of Defense, Office of the 

Undersecretary of Defense for Personnel and 

Readiness, Department of Defense Annual Report 

on the Financial Literacy and Preparedness of 

Members of the Armed Forces: Results from the 

2017 Status of Forces Survey. January 2019.

Distribution of Financial Well-Being Scale Scores

(Percent for Each Score by Military Status, 2017)

51–60 61–70 71–100

13% 21% 30% 22% 14%

Reserve 6% 18% 31% 24% 21%

Active Duty 4% 15% 31% 26% 24%

11–40 41–50

Well-being Score Range

Percent
50 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

and optional one-on-one assistance. The briefings cover education and training assistance, life insurance, home loans, and disability compensation while DOL provides a 

mandatory employment workshop. As part of the Individual Transition Plan, VA and 

DOD collaborate with ED, Department of Homeland Security, DOL, Small Business 

Administration and OPM to help veterans successfully transition to civilian life. 

The nation’s approximately 20 million veterans181 are a diverse group. Similar to DoD’s 

findings about the financial readiness of service members compared to the civilian population, veterans have somewhat better financial standing than the population as a whole, 

especially in regard to employment and savings.182 However, veterans face somewhat 

greater challenges with credit and housing expenses. Overall, veterans were 5 percent 

more likely than non-veterans to be satisfied with their financial condition and 4 percent less likely to have difficulty covering their expenses.183 While veterans appear to 

develop some sound behaviors (such as a household budget and an emergency fund), 

there are other challenges, especially in managing credit. A study found these trends to 

generally be consistent across the different military services, although there was a clear 

distinction between those who retired with full benefits and those who did not.184

Both DoD and VA provide customized assistance at key times and places for their 

audience, and focus on delivering service through trusted providers who are trained 

and familiar to their audience. Each of the military services have developed, or are 

currently developing financial literacy curricula for training their members. Further, 

they collaborate with five other agencies, through the Transition Assistance Program, 

to ensure a transition between military and civilian life, for the estimated 200,000 

people a year who transition from military to civilian life.185

However, in addition to DoD and VA programs, a number of agencies report activities to serve the military community. Although DoD has used some of these products and programs from other agencies, and relied upon their subject matter experts 

when preparing and presenting training curriculum, the federal government’s military financial literacy efforts outside of DoD could be better coordinated. These efforts 

include the Military Lifecycle website of CFPB, FTC’s militaryconsumer.gov website (which provides information on common financial topics) and a financial literacy 

campaign and publications from SEC (including “Financial Readiness: Saving and 

Investing for Military Personnel”186). CFPB has developed Misadventures in Money 

181. U.S. Department of Veterans Affairs, “FY 2018 − 2024 Strategic Plan”, February 2018, available at: https://www.va.gov/oei/

docs/VA2018-2024strategicPlan.pdf.

182. Skimmyhorn, William, “The Financial Welfare of Military Veterans: Descriptive Evidence from a National Survey”, August 

8, 2017, available at: https://www.saveandinvest.org/sites/default/files/NFCS-Veteran-Analysis.pdf.

183. Id.

184. Id. 

185. U.S. Department of Veterans Affairs, “Congressional Budget Submission, FY 2019, Volume III, VBA-161”, 2018, available 

at: https://www.va.gov/budget/docs/summary/archive/FY-2019-VA-BudgetSubmission.zip.

186. U.S. Securities and Exchange Commission, Office of Investor Education and Advocacy, “Financial Readiness: Saving 

and Investing for Military Personnel,” 2019, Available at: https://www.investor.gov/sites/investorgov/files/2019-02/SEC%20

Financial%20Readiness%20Brochure_0.pdf
Section 2: Coordination of Programs and Policy Proposals for High Impact 51

Management, an online training game for new service members.187 Additionally, DoD 

and USDA provide the Military Families Learning Network, which offers professional development and training for Personal Financial Managers and others that 

support military families. Finally, CFPB along with DOL have delivered coaching to 

veterans through American Job Centers, in a program ending in FY 2019. This lack 

of coordination is in some cases based on “legacy” outreach activities that predate the 

DoD’s current financial readiness mandate and focus.

Issues and Recommendations

Metrics and Accountability for Military 

DoD’s annual Status of Forces Survey gathers information on the financial literacy and preparedness of members of the armed forces and the agency is beginning 

to implement evaluations, using this data, on the effectiveness of its financial literacy and education programs. DoD plans to continue to use this to track the financial well-being of service members over time and measure the impact of programs. 

Recommendations

Treasury recommends DoD lead the financial education activities focused on Service 

members and their families). Other agencies should increase their coordination with 

DoD with an intent to find opportunities for improvement through coordination 

through DoD’s Financial Readiness Network or other appropriate channels. 

Coordination of Programs for Military 

Both DOD and VA provide customized assistance at key times and places for their 

audience, and focus on delivering service through trusted providers who are trained 

and familiar to their audience. Each of the military services have developed, or are currently developing financial literacy curricula for training their members. Further, they 

collaborate with five other agencies, through the Transition Assistance Program, to 

ensure a transition between military and civilian life, for the estimated 200,000 people 

a year who transition from military to civilian life. However, in addition to DoD and 

VA programs, a number of agencies report activities to serve the military community. 

Recommendations 

Treasury recommends that DoD consider how to reduce, consolidate or eliminate seemingly duplicative financial education activities among the military services, including 

duplicative curricula. The Transition Assistance Program includes close coordination 

between DoD and VA and other relevant agencies on a range of topics, including financial knowledge. This coordination should continue, and draw on other members of the 

FLEC for subject matter expertise as needed, such as SEC and CFPB.

187. 1013(e)(1)(A) of the CFPA established an Office of Service Member Affairs at the CFPB, and mandates that, among 

other duties, it “educate and empower service members and their families to make better informed decisions regarding consumer 

financial products and services.” 12 U.S.C. § 5493(e)(1)(A). 
52 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Other Areas for Coordination

Websites and Outreach

Currently federal agencies have more than 40 public-facing websites on financial education topics, providing a fragmented and potentially confusing system for providing 

information to the public. Many experts and stakeholders consulted during Treasury’s 

outreach process noted that an improved site for federal resources would be a useful 

contribution to the field. However, most agencies that offer financial education content offer it as part of an integrated agency website that serves their constituencies in 

a variety of ways. As a first step, FLEC working groups can identify specific content 

or tools that federal agencies could be encouraged to cross-offer to their audiences on 

their sites, to make it easier for people to find what they are seeking. 

Agencies also promote their financial education activities through public events, social 

media, and in partnership with organizations, state and local governments and others. 

While duplication of efforts may sometimes be necessary with outreach, the FLEC 

does not have an outreach agenda to ensure a shared approach that is efficient and 

consistent with the national strategy. 

Recommendation

Treasury recommends that the FLEC members collaborate to identify modern, highly 

interactive web information and tools that include the best, most consumer-friendly 

resources from member agencies on key topics. Agencies are encouraged to cross-offer 

and showcase both general purpose financial education materials even as they also offer 

specialized or topical content that is developed and maintained on federal agency websites. 

Treasury recommends that the FLEC develop a shared outreach agenda and strategy 

for the FLEC so that agencies can work together to inform the public about available financial education.

Research Agenda 

Research on financial education is conducted directly by agency staff or indirectly 

through grants and contracts. Often this research is intended to inform federal policies and improve programs. It can also be valuable to other stakeholders in the financial education ecosystem. Research helps identify the approaches that are effective and 

best matched to different situations and needs. A number of agencies conduct or support research to inform their programs, policies, or otherwise address national interests. Further, federal agencies already collect data that could be better used to inform 

policies and programs about consumer financial decision-making. 

Many stakeholders have noted that agencies should develop a more coherent strategy 

to share research in the planning stage to enhance efforts and avoid possible duplication, and consider other data sets and research that may inform financial education. As well, the FLEC can do better to help use existing research to inform policy 
Section 2: Coordination of Programs and Policy Proposals for High Impact 53

and practice. Additionally, improved coordination could make better use of data collected by federal agencies in order to understand financial behaviors and actions (and 

thus make more informed policy and practice to address those behaviors) and develop 

education that meets people’s needs. This enhanced coordination would also help 

non-governmental researchers and research funders assess gaps to be filled, and thus 

more efficiently use their own research resources. 

Recommendations

Treasury recommends that the FLEC develop and promote a shared research agenda 

that identifies priorities and goals for all federally-supported research on financial literacy and education. To ensure coordination responsiveness, and efficiency, and avoid 

duplication, each agency will be expected to align their financial literacy research 

plans and priorities with the FLEC research agenda. The research agenda could also 

be developed in consultation with non-federal researchers and funders. 

Budget and Allocation of Resources 

Treasury worked with OMB to collect 2017 spending estimates from the FLEC 

member agencies in 2018. Based on the data collected, Treasury determined the current allocation of funds (below) to federal financial literacy efforts.

Recommendations

Treasury recommends that appropriated FLEC agencies recommend the allocation 

of resources to support the high impact areas in financial literacy, consistent with the 

Administration’s priorities. 

Federal Government Spending on Financial Literacy and Education

(In dollars, 2017)

Military and Veterans

$125m

Housing

$56.8m

Investor

Education

$26.4m

Post Secondary Education

$18.3m

K-12 Education

$4.7m

Social Security Education

$3.5m

Non-SSA Retirement Education

$2.2m

Basic Financial 

Capability

$36.7m
54 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Section 3:

188. Consumer Financial Protection Bureau, “Effective Financial Education: Five Principles and How to Use Them”, June 2017, 

available at: https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/201706_cfpb_five-principles-financial-well-being.pdf .

189. Consumer Financial Protection Bureau, “Measuring financial well-being: A guide to using the CFPB Financial Well-Being 

Scale”, December 2015, available at: https://www.consumerfinance.gov/data-research/research-reports/financial-well-being-scale/.

Best Practices for Delivery of 

Financial Literacy and Education

Introduction

Based on extensive review of the research, consultations with experts, and discussions 

with members of the FLEC, Treasury has noted a number of themes regarding effective financial literacy and education. These themes point to best practices for incorporating financial education into diverse situations, with various populations, covering 

a number of key topics. They are cross-cutting, rather than subject specific, and thus 

can be used to inform financial education policy and practice whether at home, in a 

community program, or when setting national policy. 

Treasury has identified the following eight best practices for effective financial literacy and education programs. The first five best practices are consistent with the 

principles identified by CFPB in its study entitled the “Five Principles of Effective 

Financial Education.”188 The additional three best practices have been added based 

on Treasury’s outreach to stakeholders. 

Know the Individuals and Families to be Served

Financial education, information and delivery methods must be tailored to the circumstances and needs of the user. “Knowing the population” happens at two levels: 

understanding the demographic context of the individual, and assessing the individual’s own needs, barriers, skills and motivation.

Several studies are already produced by government agencies to help understand different populations. Some examples include the FDIC’s National Survey of Unbanked 

and Underbanked Households and the Federal Reserve Board’s Survey of Household 

Economics and Decisionmaking and Survey of Consumer Finances. Other organizations provide more specialized understanding of distinct populations, such as the 

DoD’s Status of Forces Surveys of Active Duty Members.

The effective educator must also understand the individual and his or her unique situation and mindset. Attitude and needs assessments can help the educator and consumer identify gaps and motivations in order to customize the financial education 

approach. For example, CFPB developed a Financial Well-being Scale189 which helps 

assess a person’s perceptions about their financial well-being. 
Section 3: Best Practices for Delivery of Financial Literacy and Education 55

Provide Actionable, Relevant, 

and Timely Information 

Although the academic community has an ongoing debate on the effectiveness of 

financial education alone, there is agreement that when financial information is delivered in an actionable, relevant and timely manner, people are more likely to retain the 

information and act on it. For example, a body of evidence indicates that financial 

education alone has had a small impact on financial behaviors, in part because financial knowledge decays within two years of the lesson.190 On the other hand, some academics point to the need for behaviorally based strategies such as nudges or designed 

choice architecture,191 and information provided in close time proximity to when consumers are making financial decisions, known as “just in time financial education.” 

This type of relevant, timely and actionable information should include concrete steps 

for the consumer and be directly applicable to a financial decision about to be made. 

For example, pre-purchase housing counseling takes advantage of what is important 

to the person seeking information and is typically delivered close to the purchase of 

a home. In another example, the benefit estimates in the Social Security Statement 

provided to individuals near to retirement age have been found to help people make 

more informed decisions about when to claim Social Security benefits, thus impacting their income in retirement.192

Improve Key Financial Skills

Financial literacy and education can be more effective when it helps develop skills 

in knowing how to achieve their specific goals, rather than transmitting knowledge 

of particular facts about financial products and services. Effective financial literacy 

approaches are structured to: 1) help consumers know when and how to locate information for making financial decisions; 2) help consumers understand how to interpret 

information for decision-making; and 3) help consumers have skills and confidence 

to take action and implement their decision.193

190. Fernandes, David, Lynch, John G. and Netemeyer, Richard G., “Financial Literacy, Financial Education, and 

Downstream Financial Behaviors”, Management Science, August 2014, available at: https://www.researchgate.net/

publication/259763070_Financial_Literacy_Financial_Education_and_Downstream_Financial_Behaviors.

191. Choice architecture refers to the design of the context in which decisions are made. See, Thaler, R. H., Sunstein, C. R., & 

Balz, J. P. (2013). Choice architecture. In E. Shafir (Ed.), The behavioral foundations of public policy (pp. 428-439). Princeton, NJ: 

Princeton University Press.

192 Id. at 100.

193. CFPB has developed a scale to measure financial skill, see Consumer Financial Protection Bureau, “Measuring financial 

skill: A guide to using the Bureau of Consumer Financial Protection’s Financial Skill Scale”, 2018, available at: https://www.

consumerfinance.gov/data-research/research-reports/measuring-financial-skill/.
56 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Build on Motivation

Effective financial literacy and education programs capitalize on people’s motivations. 

People driven by intrinsic values, desires, interests or aspirations are more likely to stay 

focused (because they want to learn) than those forced into learning through extrinsic pressures (because they have to learn). This best practice highlights the importance 

of financial educators who use empathy and identify learners’ specific goals, understand the learners’ financial conditions and help learners achieve their own goals. For 

example, people who are strongly motivated by values of a particular faith may find 

programs that build on those values, such as those developed by a faith-based organization, to be particularly helpful. Similarly, one-on-one coaching and peer support 

have also proven effective at turning motivation into action.

Make It Easy to Make Good 

Decisions and Follow Through

This best practice acknowledges that it can be hard for people to stick with their 

goals, but the environment or context can make it easier for people to carry out their 

intentions. Even small adjustments to a process, such as nudges and defaults, can help 

make it easier for people to make sound choices. Changing the options presented, 

removing hassles and barriers, and adding supports can help people bridge the gap 

between their intentions and what they actually do. This best practice also highlights 

that programs can be designed to make it easier for people to get financial education, for example, by integrating financial education into programs and places where 

people already are, like their job or a higher education institution. For example, institutions of higher education are uniquely positioned to influence how education-related financial choices are presented, made and executed, such as through financial 

aid offers, and can provide financial education through various venues and times to 

engage students during their education. 

Develop Standards for Professional Educators

According to the National Endowment for Financial Education (NEFE): “The educator needs to be confident, competent, and knowledgeable about the topic of personal 

finance in order to create a learning environment that is ideal for student-learning. 

Fundamentally, educators should demonstrate high levels of understanding—both 

with the content and the pedagogy—of the topics that espouse the tenets of financial 

capability.”194 However, there are few standards or designations to denote the quality 

or qualifications of financial educators. This lack of standards may result in uneven 

quality of delivery, and makes it difficult for consumers, funders and policy-makers 

to select appropriate providers. 

194. National Endowment for Financial Education, “Five Key Factors for Effective Financial Education”, webpage, available at: 

https://www.nefe.org/Who-We-Help/Educators/Five-Key-Factors-for-Effective-Financial-Education.
Section 3: Best Practices for Delivery of Financial Literacy and Education 57

Many stakeholders point to the need for clearer guidelines and possibly standards195

to make financial education a more serious, evidence-based endeavor. The GAO’s 

2011 report assessing the feasibility of a federal financial literacy certification process determined that a federal certification process was feasible, but a number of challenges need to be considered. These include the cost and staffing of certification, lack 

of consensus on definitions and standards and uncertainty that certification would 

improve quality and be valued by consumers. The GAO noted ways to improve quality without full certification, including voluntary certification and specific guidelines 

provided to federally-funded financial education programs. Financial education standards would provide a baseline for developing curriculum, include core competencies 

for both consumers and educators, and provide a common platform for evaluation 

and measurement.196

Recommendations

The FLEC should work with public and private stakeholders to develop voluntary 

quality standards, based on updated research and best practices. The FLEC should 

promote the adoption of these standards in the public and private sectors. 

Provide Ongoing Support

Financial education is most effective when it is not a one-time strategy, but rather 

enables continuing opportunities for people to build their knowledge and confidence, 

set goals, and receive feedback as action is taken. For example, there is a growing 

body of research pointing to the positive potential of one-on-one financial coaching 

and counseling as a method for teaching financial literacy and education and assisting clients with taking action to strengthen their financial health and well-being.197

Trained professionals collaborate with and guide clients in reaching the client’s financial goals, which may involve overcoming setbacks (like too much debt) and creating 

action plans (saving for a child’s education or starting a business). 

Recommendations

The FLEC should collaborate with the private sector and state and local governments to identify feasible options for incorporating one-on-one financial coaching 

into financial literacy and education services. Subject to the availability of funding, 

the FLEC directly or through its members should consider supporting research to 

identify lower-cost methods for providing financial coaching and counseling, including technology-based and abbreviated approaches. 

195. Grist, Nicky, “The Professionalizing Field of Financial Counseling: A Journal of Essays from Expert Perspectives 

in the Field”, Citi Community Development and Cities for Financial Empowerment Fund, available at: http://www.

professionalfincounselingjournal.org/assets/cfe-fund-professionalizing-field-of-financial-counseling-and-coaching-journal.pdf.

196. U.S. Government Accountability Office, “Financial Literacy: A Federal Certification Process for Providers Would Pose 

Challenges, GAO-11-614”, June 28, 2011, available at: https://www.gao.gov/products/GAO-11-614.

197. Center for Financial Security, University of Wisconsin-Madison, “Financial Coaching: Review of Existing Research,” 

Issue Brief 2017-3.1, March, 2017 available at: https://fyi.extension.wisc.edu/financialcoaching/files/2015/10/Financial_Coaching_

Review_3-2017.pdf.
58 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Evaluate for Impact

NEFE and other national stakeholders have stressed the importance of supporting 

research to identify and promote effective practices in financial literacy and education.198 The array of financial education providers (many of which are small in scale), 

the relative youth of the field, and the diversity of goals in financial education programs create a lack of consistency that makes data collection and evaluation challenging. Researchers do not have a shared set of standards for reporting on financial 

education and measuring changes in financial literacy that clearly identify changes 

in knowledge or behavior. Despite the call for national goals, the federal government 

has not established a methodology for achieving common goals. In addition, the 

federal government has not established a strategy for evaluating the effectiveness of 

individual programs and initiatives nor developed a way to measure national progress towards improving financial literacy. While there may be challenges to assessing 

federal activities, performance metrics, gauging progress towards goals and promoting a culture of data collection, evaluation and continuous improvement should be a 

key focus for the FLEC moving forward. 

Recommendations

The FLEC should collaborate with the private sector and state and local governments 

to strengthen the culture of continuous improvement within the financial literacy and 

education field and to establish methodologies, procedures, reporting and metrics for 

measuring program effectiveness. The FLEC should also promote core metrics that 

should be adopted and used by federal agencies, including organizations that receive 

federal funding with an obligation to deliver financial education, and other funders 

of financial literacy and education programs and services. 

198. Id at 194. 
Section 3: Best Practices for Delivery of Financial Literacy and Education 59

Net Worth and Measures of Financial Health

199. Parker, Sarah, Castillo, Nancy, Garon, Thea, and Levy, Rob, “Eight Ways to Measure Financial Health”, Center for Financial Services Innovation, May 

2016, available at: https://s3.amazonaws.com/cfsi-innovation-files-2018/wp-content/uploads/2016/05/09212818/Consumer-FinHealth-Metrics-FINAL_May.pdf.

200. Financial Literacy and Education Commission, 2011. 

201. Consumer Financial Protection Bureau, “Financial well-being: What it means and how to help”, available at: https://files.consumerfinance.gov/f/201501_

cfpb_digest_financial-well-being.pdf.

For many households, financial health is measured by their income. However, while income is 

an important component of financial health, it is 

only part of the equation. Some experts and academics believe that net worth is better assessment of financial health than income. Net worth 

or wealth allows a family to deal with a financial 

crisis, such as the loss of employment or long 

term sickness, and it also allows for investments 

in a home, small business and higher education. In other words, a household with no wealth, 

whether intergenerational or accumulated from 

their own savings and investments, may not be 

financially healthy despite a high salary. The type 

of assets also affect financial health, with illiquid 

assets and short-term liabilities a greater potential risk than liquid assets and long-term debt. 

For many financial educators and households, 

assessing a household’s net worth is the start 

of the conversation. It allows financial educators 

and households to create a financial plan that 

consider assets and liabilities and leads to better financial health. Net worth considerations will 

also allow policymakers to have a more accurate 

picture of financial health to assess middle class 

economic security across different demographic 

populations. 

There are other reasonable approaches to considering overall financial health or well-being. 

For example, the Center for Financial Services

Innovation (CFSI) looks at four components 

(spending, saving, borrowing, and planning) 

and eight indicators of financial health as well 

as data that can be collected to make the financial health assessment. The data collected to 

measure the financial health for each component range from the difference between income 

and expenses (for spending) to the debt-to-income ratio (for borrowing) to the type and extent 

of insurance coverage (for planning). The type 

of assets also matter for financial health. For 

example, CFSI distinguishes between the liquid and illiquid assets by pointing out that liquid 

savings are “important for coping with an unexpected expense,” while long-term savings promote financial security. 199

Financial well-being has been identified as a 

common outcome goal of financial education 

efforts.200 The CFPB has developed a robust 

and validated scale to measure a person’s 

sense of financial well-being, which is defined 

as the “state of being wherein a person can 

fully meet current and ongoing financial obligations, can feel secure in their financial future 

and is able to make choices that allow them to 

enjoy life.” While this measure is subjective, a 

number of trackable and objective factors are 

strongly associated with a person’s level of 

financial well-being, most notably having liquid savings.201
60 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Section 4:

202. U.S. Department of the Treasury, “A Financial System That Creates Economic Opportunities Nonbank Financials, Fintech, 

and Innovation”, July 2018, available at: https://home.treasury.gov/sites/default/files/2018-08/A-Financial-System-that-CreatesEconomic-Opportunities---Nonbank-Financials-Fintech-and-Innovation.pdf.

203. G20/OECD INFE, “Ensuring financial education and consumer protection for all in the digital age,” 2017, available at: 

http://www.oecd.org/finance/g20-oecd-report-on-ensuring-financial-education-and-consumer-protection-for-all-in-the-digital-age.htm.

204. Id. at 202.

Technology and the Future of 

Financial Education

As noted in Treasury’s recent report A Financial System That Creates Economic 

Opportunities: Nonbank Financials, Fintech, and Innovation, technology is rapidly 

developing and expanding the financial services industry’s ability to reach consumers 

who increasingly prefer fast and convenient services.202 The rapid ascent of technology into the daily lives of consumers exemplifies the ubiquity, versatility and potential 

of technology to facilitate financial education and financial literacy capability building. As financial technology continues to advance, policymakers must also consider 

how financial education must evolve to help people effectively manage these emerging technologies. 

The application of digital technologies to personal finance provides significant opportunity for consumers to improve their financial literacy and well-being. For example, 

mobile phones make it easy for people to find information and tools and select financial products and services. Reminders and behavioral prompts, learning games, and 

self-study modules can all be delivered through the phone. These offerings can deliver 

up-to-the minute information, making it easier to make informed “just in time” decisions and manage toward one’s goals. Digital reminders can prompt learning, catalyze 

behavioral changes, and overcome barriers to action.203 Additionally, mobile apps can 

be highly engaging, and make learning fun and desirable, especially when they use 

strategies such as gamification or social interactions. 

Despite the growth of digital financial services, financial education is not yet effectively leveraging technology. For example, many digital financial products and services 

and financial education are not designed to build consumer knowledge and understanding, and are not geared to less financially educated users. Additionally, many 

consumers, even young people, lack trust in technology and maintain a preference 

for in-person learning, especially for major financial decisions. Finally, little is known 

about the impact of financial technologies on knowledge or behaviors, as few have 

been rigorously studied by outside parties.

Technology solutions may help bridge the gap between consumers and more “human 

touch” responses. For example, customer service tools, chatbots204 and artificial 
Section 4: Technology and the Future of Financial Education 61

intelligence may be able to help people get customized responses to their questions. 

Technologies can also be used to make more efficient the delivery of high-touch, 

face to face services, such as making it easy to find help available when needed, and 

reduce the cost of providing one-on-one financial education. Better data analysis can 

also enable financial education providers to more effectively target their activities. For 

example, universities are using data analytics to target financial counseling and supports to those students likely to pose greater risk for non-completion and defaulting 

on their student loans. 

Technology can augment existing financial education strategies. For example, effectively using technology, financial education providers may be able to reach more 

people with quality services, including reaching people in remote and rural communities who might not otherwise be able to access their services.205 Federal agencies 

and other financial education providers should consider monitoring developments in 

technology-driven education to learn of emerging approaches to overcome the challenges raised above, while also tracking evolving needs of consumers within the rapidly changing landscape of digital financial services. Federal agencies and the private 

sector have a long way to go in addressing these issues before best practices can be 

developed for the delivery of financial education through technology.

Finally, there are many complexities associated with an increasingly technology-based 

financial sector that financial education should address. Consumers are increasingly 

facing new financial products and services delivered through digital means, such as 

peer-to-peer payments, mobile banking, virtual currency, crowdfunding, and digital 

credit. As these financial technology products continue to enter the market, financial 

education programs will need to evolve to teach consumers how to make informed 

decisions with respect to these products. In addition, consumers may need assistance 

in understanding their obligations and protections related to digital financial services, 

and where to go to seek redress and complain about products and services and report 

non-compliant activities.206 The financial education field has not fully responded to 

both the challenges and opportunities posed by technology, as it must do to remain 

relevant in the years ahead.

205. For some examples, see: Nonprofit Leaders in Financial Technology, “Fulfilling the Promise of Fintech: The Case for a 

Nonprofit Vision and Leadership,” The Aspen Institute, 2018, available at: https://assets.aspeninstitute.org/content/uploads/2018/09/

nLIFT-Manifesto-FINAL-1.pdf

206. Organization for Economic Cooperation and Development (OECD), “G20/OECD INFE Policy Guidance: Digitalisation 

and Financial Literacy”, 2018, available at: https://www.gpfi.org/sites/default/files/documents/G20_OECD_INFE_Policy_Guidance_

Digitalisation_and_Financial_Literacy.pdf.
62 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Exhibits

Exhibit A: Participants in the Engagement Process

Nonprofits and Professional and Trade Associations 

ACCION NY

Achieving the Dream

American Association of State 

Colleges and Universities

Association for Enterprise Opportunity 

Association of Community College Trustees

American Bankers Association

American Benefits Council

Association for Financial Counseling 

& Planning Education

Atlanta University Center Consortium

Career Education Colleges and Universities 

Center for Financial Services Innovation 

Center for Responsible Lending

Cities for Financial Empowerment Fund

Clarifi

Coalition of Higher Education 

Assistance Organizations

Council for Economic Education

Credit Builders Alliance

EARN

Earn to Learn

Education Finance Council

Family, Career and Community 

Leaders of America

Florida Prosperity Partnership

Higher Education Financial 

Wellness Association 

Homeownership Preservation Foundation

Hugh O’Brian Youth Leadership 

The Institute for College Access and Success

Insured Retirement Institute

International Foundation of 

Employee Benefits Plans

Jumpstart Coalition

Junior Achievement USA

Justine Peterson

Local Initiatives Support Corporation 

Lumina Foundation

MOHELA

National Association of Financial 

Aid Administrators

NASPA Student Affairs Administrators 

in Higher Education

National College Access Network

National Council of Higher 

Education Resources

National Endowment for Financial Education

NeighborWorks

Next Gen Personal Finance

Pacific Community Ventures

Parents Step Ahead

Pension Rights Center
Exhibits 63

Society for Financial Education and 

Professional Development 

SourceLink

Stewards of Affordable Housing for the Future

Uaspire

Women’s Institute for A Secure 

Retirement (WISER)

State and Local Government

City of San Francisco, Office of 

Financial Empowerment

Indiana Treasurer and Secretary of State

Mississippi Treasurer

Nevada Treasurer

Tennessee Treasurer, Financial 

Literacy Commission

Vermont Treasurer

Washington Department of 

Financial Institutions 

Wisconsin Department of Financial Institutions

Other Private Sector Entities

Azim Premji Foundation

Bank of America

Charles Schwab Foundation

Discover Financial Services

Edward Lowe Foundation

EverFi

Fidelity Investments

FICO

FINRA Investor Education Foundation

Ideas42

iGrad

Kauffman Foundation

LendEDU

Meredith Corp.

PayforEd

Pepsico

Prudential

Ramsey Education

Savingforcollege.com

Trellis Group

Vanguard

Think Tanks

Aspen Institute

New America

Urban Institute
64 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Academics and Institutions of Higher Education

Alamo Colleges District, Palo Alto College

Babson College/Goldman Sachs 

10,000 Small Businesses

Boston College, Center for Retirement Research

Cabarrus College of Health Sciences

Center for Allied Health Education

Champlain College

Clark Atlanta University 

Cloud County Community College

Cuyahoga Community College

Duke University, Common Cents Lab

Front Range Community College

George Washington University, Global 

Financial Literacy Excellence Center

Georgia State University

Harvard College

Indiana University

Indiana Wesleyan University

Iowa State University

Kansas State University

Lancaster Bible College

Loyola University Chicago

Maricopa Community College

Michigan State University 

Milwaukee School of Engineering

Minnesota State University Mankato

Montana State University

Morehouse College, School of Medicine 

Ohio State University

Oregon State University 

Portland State University

Prairie View A & M University

Ramapo College of New Jersey

Rutgers University 

Seton Hall University

Skyline College

Southern Utah University

Southwestern College & New Earth Institute

Southwestern Illinois College

Spelman College 

State University of New York 

Erie Community College

State University of New York Oneonta

Stockton University

Syracuse University

Texas Tech University

University of Colorado, Center for Research 

on Consumer Financial Decision Making

University of Kentucky

University of Maryland 

University of Miami

University of Montana

University of Montevallo

University of North Texas

University of South Carolina

University of Texas - Austin

University of Virginia

University of West Georgia

University of Wisconsin-Madison, 

Center for Financial Security

Utah State University 
Exhibits 65

Valencia College

Washington University in St. Louis, 

Center for Social Development

Western Governors University

William & Mary, Raymond A. 

Mason School of Business

Worcester Polytechnic Institute

Government-related Entities (other than FLEC members)

Federal Reserve Bank of Boston

Federal Reserve Bank of St. Louis, Center 

for Household Financial Stability

National Science Foundation – iCorps

Members of the Financial Literacy and Education Commission 

Department of the Treasury (Treasury), Chair

Consumer Financial Protection 

Bureau (CFPB), Vice Chair

Department of Agriculture (USDA)

Department of Education (ED)

Department of Defense (DoD)

Department of Health and 

Human Services (HHS)

Department of Housing and 

Urban Development (HUD)

Department of the Interior (DOI) 

Department of Labor (DOL)

Department of Veterans Affairs (VA)

Board of Governors of the Federal 

Reserve System (FRB) 

Commodity Futures Trading 

Commission (CFTC)

Federal Deposit Insurance Corporation (FDIC)

Federal Emergency Management 

Agency (FEMA) 

Federal Trade Commission (FTC) 

General Services Administration (GSA)

National Credit Union Administration (NCUA)

Office of the Comptroller of 

the Currency (OCC)

Office of Personnel Management (OPM)

Securities and Exchange Commission (SEC)

Small Business Administration (SBA)

Social Security Administration (SSA)

White House Domestic Policy Council (DPC)
66 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Exhibit B: Summary of Recommendations

Section 1: Governance of Federal Financial Literacy and Education Efforts

Recommendation Policy Responsibility

Best Practices for Delivery of Financial Literacy to the Public

Treasury recommends that the primary federal role for financial literacy 

and education should be to empower financial education providers as 

opposed to trying to directly reach every American household. This federal 

role could include developing and implementing policy, encouraging 

research, and other activities, including conducting financial education 

programs, and developing educational resources as needed to advance 

best practices and standards to equip Americans with the skills, 

knowledge, and tools to confidently make informed financial decisions 

and improve their financial well-being. The federal government should 

also consider the impact of the lack of financial literacy on households 

and the risk to the economy from negative externalities and market 

failures. Financial literacy and education should be seen as a vehicle 

to guard against market failures and foster competitive markets. 

FLEC

Leadership and Accountability for Federal Financial Literacy and Education

Treasury recommends the FLEC establish bylaws to set clear expectations 

for its decision-making and roles, including establishing a six-member 

Executive Committee comprised of Treasury (chair), CFPB (vice chair), and 

ED, HUD, DOL and DoD. The Executive Committee will be responsible for 

crafting, with input from other FLEC members, a shared agenda for action 

and priorities, and be accountable to report on achievement of that agenda. 

The agenda would be voted on and approved by a majority of the members.

To ensure the FLEC is accountable for the agenda and improving 

Americans’ financial decision-making, Treasury recommends the 

Executive Committee develop and implement outcome measures 

for federal financial education activities. These measures, and the 

actions toward attaining them, would be reported in the FLEC’s report 

to Congress189 and used to recommend future actions. Exhibit C

includes potential outcome measures recommended by Treasury.

FLEC
Exhibits 67

Recommendation Policy Responsibility

Treasury recommends all other FLEC members would provide information 

and input to the FLEC Executive Committee and serve on one or more 

working groups or task forces (below) based on their areas of expertise. 

Treasury also recommends that the FLEC form the following five 

working groups, with the member of the Executive Committee 

identified below leading each working group by taking responsibility 

for developing an agenda for programs, research and outreach: 

Basic Financial Capability (CFPB)

Retirement Savings and Investor Education (DOL) 

Housing Counseling (HUD)

Postsecondary Education (ED)

Military (DoD) 

FLEC

Coordination of FLEC Efforts

Treasury recommends that the FLEC should determine a structure 

to liaise in a more consistent and ongoing way with intermediaries 

or populations that are critical to financial education, such as: 

State, tribal and local governments

Nonprofit organizations

Employers 

Financial institutions and financial services industry

Federal Reserve Banks and Federal Home Loan Banks 

and Government Sponsored Enterprises (GSEs)

Youth and families and state and local education agencies

Older Americans

People with disabilities 

Low and moderate-income individuals 

Minority populations

FLEC
68 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Section 2: Coordination of Programs and Policy Proposals

Recommendation Policy Responsibility

Basic Financial Capability

The CFPB in its role on the FLEC Executive Committee and 

leading the Basic Financial Capability Working Group should 

have the responsibility for coordinating the FLEC’s activities 

related to basic financial capability and have accountability 

for reporting on those activities. Treasury also recommends 

that the outcome measures such as those in Exhibit C be 

considered for adoption to measure the impact of financial 

literacy and education efforts on basic financial capability

CFPB 

Treasury recommends that FLEC designate the Money Smart 

curriculum and the Your Money Your Goals program as the core 

resources for use by federal agencies with initiatives targeted 

to civilians, and that the CFPB and FDIC collaborate to align 

the recommended uses of the Your Money, Your Goals Toolkit 

and the Money Smart curriculum to create a comprehensive 

set of materials to be considered the core federal financial 

education product for adults, especially low-income adults. 

CFPB and FDIC

Access to Financial Services and Saving and Credit

Treasury recommends that financial institutions and educators 

incorporate into their curriculum and programs information 

about account screening CRAs. The curriculum and programs 

should discuss how account screening CRAs are a potential 

barrier to accessing the banking system, ways to avoid 

negative information on bank account screening reports, and 

the error resolution process to resolve incorrect information. 

Financial Literacy Programs

Treasury recommends that the FLEC collaborate with 

public-private partnerships between state and local 

governments and financial institutions to develop best 

practices for building financial capability by connecting 

consumers to suitable financial products and education. 

FLEC and Financial 

Literacy Programs

Treasury recommends that the CFPB and the FLEC work 

with employers to promote emergency savings. CFPB, FLEC and Employers
Exhibits 69

Recommendation Policy Responsibility

Treasury recommends that the CFPB lead on disaster financial 

preparedness education content and effective delivery, such as 

education about emergency savings, insurance, and working 

closely with FEMA and other agencies. Metrics and methodology 

for evaluating and measuring impact should be established, 

building on the financial preparedness questions in FEMA’s Annual 

Survey of Household Preparedness. Treasury also recommends 

the Federal National Mitigation Investment Strategy and state 

and local disaster planning should include household financial 

preparedness and recovery as part of their mitigation strategies.

CFPB and FEMA

Retirement Savings and Investor Education

Treasury recommends the DOL in its role on the FLEC Executive 

Committee and leading the Retirement Savings and Investor 

Education Working Group should have the responsibility for 

coordinating the FLEC’s activities related to retirement planning, 

savings and investor education and have accountability for 

reporting on those activities. Treasury also recommends that the 

outcome measures such as those in Exhibit C be considered for 

adoption to measure the impact of financial literacy and education 

efforts on basic retirement savings and investor education.

DOL

Treasury recommends SSA coordinate with other agencies on 

retirement matters related to Social Security, with an emphasis 

on ways to capitalize on SSA’s established networks with specific 

populations or intermediaries. Treasury also recommends that 

OPM and DoD coordinate with other agencies to improve the 

quality of financial education on retirement savings and related 

topics provided to federal employees and military service 

members. Finally, Treasury recommends that HHS and DOL/

EBSA continue to collaborate on ensuring their resources are 

consumer-friendly and effective in reaching their target populations.

CFPB, SSA, DOL, HHS 

OPM and DoD

Housing Counseling

Treasury recommends that HUD in its role on the FLEC Executive 

Committee and leading the Housing Counseling Working Group 

should have the responsibility for coordinating the FLEC’s activities 

related to housing issues and have accountability for reporting 

on those activities. Treasury also recommends that the outcome 

measures such as those in Exhibit C be considered for adoption 

to measure the impact of financial literacy and education efforts. 

HUD
70 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Recommendation Policy Responsibility

In addition to face-to-face housing counseling, Treasury 

supports the use of online counseling, telephone hotlines, 

applications and other technologies to “meet consumers 

where they are” and to provide assistance to more people. 

HUD

Treasury recommends that mortgage lenders, servicers, 

investors and state and local governments continue to 

explore opportunities to incorporate housing counseling 

into their lending and servicing strategies. 

Financial Institutions and 

Housing Counseling Agencies

Treasury recommends that HUD and affordable rental 

housing providers continue to integrate financial 

education into the services provided to their residents, 

either directly or through partnerships, as feasible.

HUD and Affordable 

Housing Providers

Postsecondary Education

Treasury recommends that ED in its role on the FLEC Executive 

Committee and leading the Postsecondary Education Working 

Group, should have the responsibility for coordinating the 

FLEC’s activities related to postsecondary education and have 

accountability for reporting on those activities. Treasury also 

recommends that the outcome measures such as those in Exhibit C

be considered for adoption to measure the impact of these efforts. 

ED

Institutions of higher education should ensure that their financial 

aid offer letters are clear, timely and customized, and provide 

students with a clear sense of their investment and borrowing 

obligations. Higher education institutions should consider 

developing and testing additional interventions to improve 

students’ comprehension of options for paying for college.

Institutions of Higher 

Education

Institutions of higher education should provide students with annual 

debt letters, to ensure that students have a clear sense of their total 

borrowing obligations. State lawmakers should consider broader 

adoption of debt letters and a standardization of requirements. 

Institutions of Higher 

Education, State lawmakers

Military Service Members and Their Families

Treasury recommends DoD lead the financial education activities 

focused on service members and their families. Other agencies 

should increase their coordination with DoD with an intent to find 

opportunities for improvement through coordination through DoD’s 

Financial Readiness Network or other appropriate channels. 

DoD
Exhibits 71

Recommendation Policy Responsibility

Treasury recommends that DoD consider how to reduce, 

consolidate or eliminate seemingly duplicative financial education 

activities among the military services, including duplicative 

curricula. The Transition Assistance Program includes close 

coordination between DoD and VA and other relevant agencies on 

a range of topics, including financial knowledge. This coordination 

should continue, and draw on other members of the FLEC for 

subject matter expertise as needed, such as SEC and CFPB. 

DoD

Websites and Outreach, Research Agenda, and Allocation of Resources

Treasury recommends that the FLEC members collaborate to 

identify modern, highly interactive web information and tools that 

include the best, most consumer-friendly resources from member 

agencies on key topics. Agencies are encouraged to crossoffer and showcase both general purpose financial education 

materials even as they also offer specialized or topical content 

that is developed and maintained on federal agency websites. 

Treasury recommends that the FLEC develop a shared outreach 

agenda and strategy for the FLEC so that agencies can work 

together to inform the public about available financial education.

FLEC

Treasury recommends that the FLEC develop and promote 

a shared research agenda that identifies priorities and goals 

for all federally-supported research on financial literacy and 

education. To ensure coordination responsiveness, and efficiency, 

and avoid duplication, each agency will be expected to align 

their financial literacy research plans and priorities with FLEC 

research agenda. The research agenda could also be developed 

in consultation with non-federal researchers and funders. 

FLEC

Treasury recommends that appropriated FLEC 

agencies recommend the allocation of resources to 

support the high impact areas in financial literacy, 

consistent with the Administration’s priorities. 

FLEC
72 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Section 3: Best Practices for Delivery of Financial Literacy and Education

Recommendation Policy Responsibility

CFPB Five Best Principles of Effective Financial Education

Treasury recommends that financial education 

providers adopt the CFPB “Five Principles of 

Effective Financial Education”, which include:

• Know the Individuals and Families to be Served

• Provide Actionable, Relevant, and Timely Information

• Improve Key Financial Skills

• Build on Motivation

• Make It Easy to Make Good Decision and Follow Through

Financial Literacy Programs

Three Additional Best Practices

Treasury also recommends the adoption by financial 

education providers of three additional best practices 

based on Treasury’s outreach to stakeholders:

• Develop Standards for Professional Educators

• Provide Ongoing Support

• Evaluate for Impact

Financial Literacy Programs

In order to ensure professional educators, Treasury recommends 

that the FLEC work with public and private stakeholders to 

develop voluntary quality standards, based on updated research 

and best practices. The FLEC should promote the adoption 

of these standards in the public and private sectors. 

FLEC
Exhibits 73

Recommendation Policy Responsibility

The FLEC should collaborate with the private sector and state and 

local governments to identify feasible options for incorporating 

one-on-one financial coaching into financial literacy and education 

services. Subject to the availability of funding, the FLEC directly or 

through its members should consider supporting research to identify 

lower-cost methods for providing financial coaching and counseling, 

including technology-based and abbreviated approaches. 

FLEC

Treasury recommends that the FLEC collaborate with the private 

sector and state and local governments to strengthen the culture of 

continuous improvement within the financial literacy and education 

field and to establish methodologies, procedures, reporting and 

metrics for measuring program effectiveness. The FLEC should 

also promote core metrics that should be adopted and used by 

federal agencies, including organizations that receive federal 

funding with an obligation to deliver financial education, and other 

funders of financial literacy and education programs and services.

FLEC
74 Federal Financial Literacy Reform: Coordinating and Improving Financial Literacy Efforts

Exhibit C: Proposed Sample Outcome Measures

Basic Financial Capability – Access to Financial Services

1. Impact of the activity on reducing the number of households without a bank account or an

affordable alternative.

2. Impact of the activity on reducing the disparities between the national average for the unbanked

and the rate of unbanked among minorities, people with disabilities and other groups more likely

to be unbanked.

Basic Financial Capability – Saving and Credit

3. Impact of the activity on reducing over-indebtedness of households based on a payment

to income ratio (e.g. tracking percentage of households reducing their payment to income

ratio below 40 percent).

4. Impact of the activity on increasing credit scores. 

5. Impact of the activity on household preparedness for short term (e.g. minimum

$400 liquid savings) or long-term emergencies (e.g. 3-6 month’s income in savings).

Retirement Savings and Investor Education

6. Impact of activity on the percentage of households financially prepared for retirement

(e.g. tracking the retirement savings of financial education recipients at different ages).

7. Impact of the activity on the timing of commencing Social Security benefits.

8. Impact of the activity on people having a retirement savings plan (defined benefit, defined 

contribution and/or IRA or similar).

9. Impact of the activity on reducing losses from investor and consumer fraud.

10. Impact of the activity on savings to consumers and investors from increased financial literacy

Housing Counseling

11. Impact of the activity on reducing the default rate on mortgages.

12. Impact of the activity on increasing the rate of homeownership among underrepresented groups.

13. Impact of the activity on reducing the mortgage or rent burden on households.

Postsecondary Education

Treasury notes that other measures may be adopted in place of the measure below.

14. Impact of the activity on reducing the student loan default rate of recipients of the intervention.

General – Financial Well-Being

15. Impact of activity on improving Financial Well-Being, as measured by the CFPB

Financial Well-Being Scale.
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2019-04961 (Rev. 1) • Department of the Treasury • Departmental Offices • www.treasury.gov