Minutes

Financial Literacy and Education Commission – Public Meeting June 29, 2016

U.S. Department of the Treasury, Washington, DC

Melissa Koide, Deputy Assistant Secretary for Consumer Policy, U.S. Department of the 

Treasury, called the meeting to order at approximately 9:15 a.m. She explained that Secretary 

Lew would be delayed, and asked Secretary Perez to provide remarks.

Ms. Koide introduced Tom Perez, U.S. Secretary of Labor. Secretary Perez addressed the 

Commission. He thanked the members of the FLEC, including Treasury and the CFPB for their 

partnership. He described how retirement plans have changed in the past 30 years, from defined 

benefit to defined contribution plans. He noted that the greater onus on consumers to make 

critical decisions for their own retirement security. Yet, financial education of Americans has 

not kept up, even with the efforts of government agencies and the private sector. Americans’ 

financial literacy is insufficient to meet their needs, even in comparison to other countries. He 

noted the efforts for financial literacy are important to ensuring a dignified retirement as a 

critical pillar of middle class security. The Secretary described how the Department of Labor has 

been focused on promoting savings and protecting consumers, including helping state programs 

that help workers save for retirement and supporting myRA . Currently eight states have passed 

programs to enable auto-enrollment in an IRA, which increases the likelihood of saving 13 times. 

He congratulated the Treasury in releasing myRA as an important tool in the toolkit. 

Secretary Perez described the new conflict of interest rule as important to helping millions of 

Americans safeguard and grow their retirement nest egg, by helping them get advice in their

financial best interest. Secretary Perez noted that the Department will defend the rule against 

lawsuits. He explained that it is often difficult for consumers to figure out which advisors are 

best for them and cited the CFPB’s report on this topic, as well as the recent show in which John 

Oliver humorously highlighted the challenge. Perez praised private sector leaders who are 

focusing on financial education, and noted the role of the FLEC in fortifying the pillar of middle 

class security, to make sure consumers are able to retain their savings. 

Next, Secretary Jacob Lew thanked everyone for focusing on helping Americans attain their 

financial goals. He thanked Secretary Perez for his leadership in helping people have the tools 

and protection to plan for their own future. Secretary Lew noted the importance of savings and 

investment for security and future generations. He explained that for many, the best way to 

retirement savings is through their workplace savings plans, yet many do not use such 

opportunities. He also noted that 30 million Americans lack access to retirement plans, but 

would have access if auto IRA is enacted. Secretary Lew also noted new state programs that 

enable auto IRAs. Secretary Lew noted DOL’s new rule in this area, and Treasury’s myRA as a 

type of Roth which is simple, low risk and safe, thus meeting the needs of people who are new to 

saving for retirement. 

Secretary Lew reiterated the importance of education and advice for individuals to manage their 

retirement savings, given lack of confidence in investing. Secretary Lew spoke on the 
Department of Labor’s work on the conflict of interest rule to help people obtain trusted advice. 

Secretary Lew pointed out the importance of reaching young people, including through 

technology-based tools. He noted the importance of helping young workers gain financial 

education and opportunities to access an account with their first paycheck, and referred to efforts 

across the FLEC to support that activity. Secretary Lew closed with encouraging the FLEC to 

have a productive conversation.

Next, Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB), stated 

the value of working together to promote financial well-being, especially for vulnerable people. 

He noted the CFPB is interested in helping people obtain financial advice in their best interest. 

He described the role of the CFPB in consumer protection and informing consumers. He noted

the importance of diverse array of partnerships at the local level. Director Cordray pointed to

important partnerships with legal aid groups, and how the CFPB is providing resources to help 

these groups help their consumers. For example, Your Money, Your Goals’ toolkit has been 

shared with 450 legal aid staff and volunteer lawyers have attained in person and online training. 

The “Managing Someone Else’s Money” guides are written in plain language to help an array of 

lay fiduciaries, especially those serving older adults. There have been 600,000 printed copies of 

the guides distributed. He encouraged other agencies to work with Legal Aid groups to enable

greater effectiveness. Director Cordray’s full remarks are available here: 

http://www.consumerfinance.gov/about-us/newsroom/prepared-remarks-richard-cordraydirector-consumer-financial-protection-bureau-doe/

Secretary Lew congratulated Assistant Secretary Phyllis Borzi on protection of retirement 

savings, and the Commission acknowledged her with applause. . 

Panel 1. Financial Education and Retirement Investment Advice

Phyllis Borzi, Assistant Secretary, Employee Benefits Security Administration, Department of 

Labor, introduced the panel: Marilyn Mohrman-Gillis, Managing Director, Public Policy and 

Communications, CFP Board, Sarah Newcomb, Behavioral Economist, Morningstar and Jon 

Stein, Founder and CEO, Betterment. Ms. Borzi asked about their work, including the role of 

the CFP Board certification, consumers’ understanding of risks and investments, various 

approaches to help people gain better understanding on financial terms and even contracts. 

Ms. Borzi posed a question about the Certified Financial Planner (CFP) Board designations to 

financial advisors. Ms. Mohrman-Gillis explained that the CFP Board is a 501(c)(3) 

organization with high standards for certification, including education, experience, and an 

extensive examination. Since 2008, there is a standard of professional conduct which includes

the Department of Labor’s fiduciary rule. A brief advertisement produced by the CFP Board was 

shown, and explained by Ms. Mohrman-Gillis. The spot showed a DJ disguised as financial 

advisor. Most of the people said they would work with him, one said he would work with him 

even after he was revealed as a DJ. 
Sarah Newcomb, Behavioral Economist, Morningstar, discussed two approaches to behavioral 

economics: nudges vs. financial education. She expressed the view that it is important to

combine the two—nudges get people to the table and then financial education helps them to use 

tools once they get to the table. People do need the financial education, but studies of financial 

education have had mixed results. She noted, for example, that “just in time” financial education 

has proven valuable, but we don’t know when people will need it. She noted that financial 

information needs to be simplified because people do not understand, including financial 

professionals. Ms. Newcomb stated regarding the CFP Board ad, it iterated the point that people 

do not understand how their financial advisor is being paid, and it is a difficult question for 

people to raise.

Jon Stein, Founder and CEO of Betterment described how and why he founded the company, 

which is to help people make better financial decisions. He made an analogy on financial

education being like a map, and advice being like a GPS directing you along the way. 

Panelists further discussed the value of both financial education and one-on-one advice. Ms. 

Mohrman-Gillis emphasized the value of a regulatory structure clarifying the responsibilities of 

different types of advisors. Ms. Newcomb noted that while financial products may be complex, 

general concepts may be easier, but it is hard to choose from many choices. She noted that there 

are ways of organizing choices, such as rating systems, to make them easier to navigate.

FLEC members raised questions about access to customer data and use of customer data in an

on-line advising format. Mr. Stein explained that more financial data helps provide better 

solutions for consumers, such as by considering more information about the intentions and 

financial goals of an individual. Factors like Social Security information and spouse information 

can be helpful in providing a holistic view of the customers’ needs. He also noted that 

consumers can contract with businesses so that they don’t share their data. Additionally, he 

reported that algorithmic advice is transparent and accurate, as well as consistent. 

The panelists were asked for their advice for the FLEC and particularly around the question

about how to help people access advice and guidance. Mr. Stein stated that automated advice is 

very cost effective, and thus enables a low-cost, aligned business model. Betterment charges 

customers for consultation advice only. He stated the believe that the automated model will be 

increasingly common. He gives the parallel of the self-driven car which is complex, but 

technology is good at solving the problems that make it difficult, although it may be with human 

intermediation. . Ms. Mohrman-Gillis believes that technology is important, but at the same 

time you need the financial literacy and education. Regulatory safety nets are needed to be 

extended to financial advice, like the conflict of interest rule. 

Ms. Newcomb gave a three legged rule analogy which are policy concerns, education and 

nudges. Ms. Borzi closed the panel with two thoughts, that financial literacy been focused on the 

consumer, we should spend more time on educating the advisor. She also noted that regulations

can be altered in the future to respond to needs that arise. 
Panel 2. Legal Aid and Financial Education 

Karen Lash, Executive Director of the White House Legal Aid Interagency Roundtable (LAIR) 

introduced the panelists. She gave a background on the Legal Aid Interagency Roundtable, 

which was started in 2012. She described both the low public awareness of the legal aid and the 

role legal aid can play in addressing many issues related to the financial well-being, education, 

employment and housing.

Mary Griffin, Senior Advisor, Office of Financial Empowerment, Consumer Financial Protection 

Bureau explained how her office sees financial empowerment and education, and its focus on 

integrating financial empowerment into existing programs. She noted that the CFPB developed 

Your Money, Your Goals to address an unmet need – to help frontline staff have the “money 

conversation” with their clients. The toolkit is a series of modules that address specific topics 

such as how to read your credit report or your rights related to debt collection. More than 450 

legal aid volunteers and staff have been trained to incorporate Your Money, Your Goals into 

their work. Working with partners, national and local, public and private, CFPB has reached

more than 8,000 frontline social services and legal aid staff and community volunteers. She 

closes by speaking on partnerships with legal aid around financial education and empowerment 

efforts informing many aspects of CFPB’s work. 

Monica Vaca, Assistant Director, Bureau of Consumer Protection, Federal Trade Commission 

(FTC), speaks on the Federal Trade Commission’s Legal Services Collaboration project. Ms. 

Vaca explains how it has become an important part of consumer protection efforts. In short: the 

FTC’s work is better because of the partnership with legal services advocates. She explains 

some of the consumer protection problems being addressed are helping people from losing 

homes and getting scammed. The FTC wants to make sure that information is accurate and 

relevant, given the feedback that some resources were too complex for consumers. Ms. Vaca 

described how the FTC receives information about scams and other issues through their 

partnerships with legal aid programs. For example, the FTC developed a simple website, 

Consumer.gov (consumidor.gov in Spanish), as well as resources targeting particular needs. Ms. 

Vaca spoke on cross training helping all agencies involved with advancement in knowledge of 

issues.

Michael Froehlich, Managing Attorney, Community Legal Service (CLS) of Philadelphia, began 

with a little background of the CLS and provided a description of their partnership with Clarifi, a 

consumer credit counseling agency that provides financial education and counseling on site with 

CLS’s clients. The financial counselors help clients avoid fees and manage their finances, while 

the lawyers can focus on resolving legal matters, which may be related, such as managing home 

mortgage modifications to avoid foreclosure. Mr. Froehlich indicated that this partnership 

provides trusted financial counseling services for clients of CLS, which is especially important in 

the face of many unscrupulous financial advisors. The financial counselor can spend more time 

with the client than the legal aid lawyer can, educating and empowering her about her finances, 

and doing so one-on-one. Mr. Froehlich also described the value of the CFPB’s and FTC’s 

consumer facing materials, which are written in clear, consumer-friendly language. He added 

that more such materials would be valuable, in addition to materials in Spanish and other 
languages. Mr. Froehlich closed with a recommendation that the FLEC continue to support 

financial education and consumer resources, but also work to make financial products more clear 

and easy for consumers to understand. 

Ms. Lash suggested agencies consider how their programs focused on low-income populations, 

can include a legal aid income representative to get the information produced into the hands of 

those who need it most. Mr. Cordray proposed that materials that go towards the public have to 

be translated from legal terms into English. 

National Strategy Update

DAS Koide called on Louisa Quittman, Director, Financial Security at the Department of the 

Treasury to provide a status report on the FLEC’s National Strategy Update. The National 

Strategy Update will reflect the fact that there have been many changes in the state of financial 

education since the National Strategy was released in 2011. The National Strategy Update will 

capture what has been learned, what the FLEC has done, and steps forward. The Update will 

enable a smooth transition to the next Administration. Ms. Quittman described that a Request for 

Public Comments was released in April, and the Treasury Department, on behalf of the FLEC 

received responses from non-profits, businesses, trade associations and members of the public. 

Comments were generally supportive of the update. The feedback addressed topics including the 

understanding and addressing the needs of financially vulnerable individuals, and the value of 

financial education across the lifecycle. The Update is expected to be released this fall

DAS Koide thanked the Commission members, those in attendance and adjourned the meeting at 

approximately 11:35 a.m.

Participants

Members of the FLEC

Jacob Lew Secretary of the Treasury, Chair of the FLEC

Richard Cordray Director-Consumer Financial Protection Bureau,

Vice Chair of the FLEC

Thomas Perez Secretary of Labor, Department of Labor

Jack Bienko Small Business Administration

Phyllis Borzi Department of Labor

Wayne Boswell Department of Defense

Linda Bradford Office of Personnel Management

Jeannie Chaffin Department of Health and Human Services

Alan Fishbein Federal Reserve Board

Amias Gerety Department of the Treasury

Bill Glavin Department of Housing and Urban Development

Beth Honadle Department of Agriculture

Marietta Jelks General Services Administration

Melissa Koide Department of the Treasury

Gail Laster National Credit Union Administration

Karen Marsh Federal Emergency Management Agency

Cristina Miranda Federal Trade Commission
Mark Mitsui Department of Education

Jioni Palmer Social Security Administration

Louisa Quittman Department of the Treasury

Janneke Ratcliffe Consumer Financial Protection Bureau

Luke Reynolds Federal Deposit Insurance Corporation

Dan Rutherford Commodities Futures Trading Commission

Lori Schock Securities and Exchange Commission

Julie Schroeder Department of Veterans Affairs

Barry Wides Office of the Comptroller of the Currency

Panelists 

Michael Froehlich Community Legal Service of Philadelphia

Mary Griffin Consumer Financial Protection Bureau

Karen Lash Legal Aid Interagency Roundtable

Marilyn Mohrman-Gillis CFP Board

Sarah Newcomb Morningstar

Jon Stein Betterment

Monica Vaca Federal Trade Commission