Summary of Financial Literacy and Education Commission Public Meeting

May 29, 2014

U.S. Department of the Treasury, Washington D.C. – Cash Room

Webcast available at: http://www.treasury.gov/press-center/press-releases/Pages/jl2413.aspx

Executive Summary 

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

Treasury, opened the meeting with a brief introduction to the topic of youth financial success in 

regards to retirement savings. She introduced Mary J. Miller, Under Secretary for Domestic 

Finance of the U.S. Department of the Treasury.

Miller described the role of the President’s Advisory Council on Financial Capability for Young 

Americans (PACFCYA), speaking on the collaborative effort between the private sector, 

families, schools, and communities in improving the financial capability of young people. She 

noted that the Department of the Treasury is eager to learn and assist these groups in their efforts 

for preparing young people for financial choices, including with financing higher education and 

planning for retirement. Some steps the administration has taken to make college more 

affordable are lowering interest rates on student loans and increasing the maximum Pell Grant to

more than $900. This is especially important as an increase in debt burden from student loans 

impedes future financial decisions, such as buying a home or planning for retirement. It is 

important young people have the tools, guidance and capabilities to ensure they can successfully 

plan for the future.

Miller spoke about the disparities of retirement savings, and how those with low savings are 

disproportionally young people, middle and low income people, women, and people of color. 

She introduced the myRA retirement savings product, which offers a simple and affordable way 

to save for retirement that is protected and backed by the U.S. government. It is intended to be a 

start-up tool for savings, and will especially benefit part-time and seasonal workers. Miller 

closed by stating that the Financial Literacy and Education Commission (FLEC) continues to 

seek research and ideas to increase financial literacy. These financial interventions are essential 

to creating effective policy, understanding consumer needs, and better assessing individual 

financial health. Miller’s remarks can be found on the Department of the Treasury’s website at

http://www.treasury.gov/press-center/press-releases/Pages/jl2413.aspx. Miller introduced

Richard Cordray, Director, Consumer Financial Protection Bureau. 

Cordray reiterated the Consumer Financial Protection Bureau’s (CFPB) enthusiasm for the

myRA product. He hopes the program will be heavily used amongst employers and will promote 

saving practices and financial awareness to employees. He spoke of the value of financial 

education within the workplace, as discussed at a FLEC Field Hearing held in Atlanta in 

February, and gave the example of Atlanta-based company Southwire, which partnered with the 

Federal Reserve Bank of Atlanta to provide financial education and mentoring programs to 

improve their employees’ basic financial skills. He indicated that this is a potentially valuable 

part of a work benefits package, and the federal government should lead by example and take 

advantage of financial fitness resources for its employees. He closed by giving a brief 
introduction of panel topics including the CFPB’s research initiatives, and the importance of 

state and local partnerships with the State Engagement Project. Cordray’s remarks can be found 

on the CFPB’s website at http://www.consumerfinance.gov/newsroom/prepared-remarks-ofcfpb-director-richard-cordray-at-the-financial-literacy-and-education-commission-field-hearing/.

Judy Mares, Deputy Assistant Secretary, Employee Benefits Security Administration, U.S. 

Department of Labor spoke about how the retirement marketplace has changed over the past 40 

years and how financial decision-making plays a significant role for young Americans now more 

than ever. She highlighted the value of financial knowledge as young consumers spend, save and 

plan for the future. Mares introduced panelists for further discussion on “Retirement Savings 

and the Young.” Mares’ presentation can be found at the Department of the Treasury’s website 

at http://treas.yorkcast.com/webcast/Play/64be9b02ee294902a906ffd544e391451d. 

Lisa Mensah, Founder and Executive Director, Initiative on Financial Security, the Aspen 

Institute began her discussion by emphasizing “Savings for Life,” the idea that savings needs to 

take place at all stages of a life cycle and be simple and automatic. Ideally, savings would begin 

at birth, develop through childhood and continue to retirement. For American youth, savings

should develop into a lifelong habit which would enable other financial opportunities later in life.

She also noted the importance of exposing a child to education and interaction with money as a 

significant emerging initiative. Mensah gave the example of Ariel Academy in Chicago, where 

children not only learn about investing money, but also control investment dollars for their class. 

She explained that even owning small dollar accounts greatly improve the probability of

completing college. One statistic showed that low- and moderate-income children with savings 

from $1 to $500 are three times more likely to complete college than a low-or moderate-income 

child without an account. She closed by highlighting that now is an important policy moment for

retirement savings, and that Americans are concerned about their savings and Social Security, 

especially as they approach their 50s, 60s, and 70s. Teaching young children the value of saving 

for their futures is an important investment that Americans can make, and can lead to the 

automatic thought process to planning for lifelong saving. 

J. Mark Iwry, Senior Advisor to the Secretary and Deputy Assistant Secretary for 

Retirement and Health Policy, U.S. Department of the Treasury began with an overview of 

the role of IRAs in individual saving, and its function to fill the gap for workers that do not have 

access to a workplace retirement plan. Despite the importance of saving for retirement, many 

individuals do not participate in an IRA for many reasons, for example, investment requires 

taking initiative, knowledge, good decision-making skills and confidence. Furthermore, lack of 

good jobs or an employer-sponsored plan, minimum balance requirements, and investment 

expenses often impede action. For new savers in particular, the fees associated with opening new 

accounts may be a significant amount of the initial savings, and often, the private sector does not 

serve these customers. Thus, myRA was developed by the Department of the Treasury, as a Roth

IRA savings bond designed to accommodate deposits that may be too small to be of interest to 

the private sector, or may otherwise be consumed by the fees to maintain the account. It is 

targeted towards low and moderate income individuals who may not have access to employerbased retirement plans. The myRA allows workers to open an account for as little as $25 and 

deposit savings through payroll deposits. Unlike bonds of the past, myRA would be an accountlike experience for the individual. The account is capped at $15,000, allowing for a reasonable 
transition point to move savings into the private sector for continued investment, the ultimate 

goal for these accounts. The myRA is targeted to employers that currently do not offer a plan for 

their employees and the employer participates by acting as a conduit using its payroll system to 

transfer funds. The myRA program should provide a platform to expand financial literacy for 

Americans. 

Yvonne Cowser Yancy, Commissioner of Human Resources, City of Atlanta highlighted the 

role that employers play in promoting financial literacy. She opened by speaking about the City 

of Atlanta’s current pension reform and commented that the public sector is at the point that the 

private sector encountered twenty years ago, meaning individuals will need to take a more active

role in their financial choices in order to have adequate savings. During the reform, they noticed 

a surprising trend that workers often did not know about the benefits they were receiving and

lacked knowledge and confidence about personal finance issues. To address this, the City of 

Atlanta designed a comprehensive financial education initiative which focused on the concerns 

employees had about their savings and benefits. The findings showed that employee savings 

were often influenced by how much knowledge an individual had about money and the financial 

options available to them. This played a greater role than class, income or access to knowledge. 

Efforts to improve awareness included creating a culture of engagement around money by using 

texting and interactive services, and using metrics to gauge employee financial literacy. She 

noted the challenge of helping people understand that they can be actively involved in their 

planning choices and have enough money for retirement even without a pension. They have also 

developed outreach programs to young Americans about managing credit and saving for the 

future, as findings suggest that young Americans do not have a long-term view of saving. She 

closed the discussion by reiterating the importance of developing relationships with employers as 

a means to improve financial literacy in the workplace.

Discussion with FLEC Members:

Mensah spoke about the new research which will allow for creative outreach to consumers and 

that in short, fun sells—especially when trying to get young people excited about retirement 

savings. She recapped that the best savings programs are simple and automatic, especially for 

priorities that are low on your list, as retirement often is for young people. The structure of the 

account is important and she sees hope in new tools such as mobile apps that utilize “set it and 

forget it” philosophies.

Yancy added that new mobile apps that track performance over time, for example fitness

tracking apps, may be a potential savings tool for personal finance as well, as they reward 

persistence and competition. She mentioned that when the City of Atlanta used encouragement 

through text messaging and persistent reminders, they were successful in decreasing the 

percentage of those who had never logged into their 401(k) account from 87% to less than 20% 

over the course of a year. 

Iwry spoke on the myRA outreach and development strategy with employers and stated the 

Bureau of Fiscal Service was piloting the program with a small amount of participants in order to 

have smooth implementation and operation of the new myRA product. Iwry said the Department

of the Treasury is looking for a diverse set of employers and industries and welcomes
suggestions from the Commission. Those initial employers who do choose to participate in 

offering the myRA program are especially encouraged to offer insight into their experiences.

Iwry spoke about the changing landscape of the defined-benefit plans over the years and the 

disproportionate lack of access for those who do not have access to employer-based programs. 

He noted that this leads to a wage and benefit disparity that translates to a greater wealth 

inequality and insecurity, as well as the inability to manage economic shocks. In reference to 

consumer attitudes post-recession, he believes Americans have a higher awareness of debt and 

the accumulation of assets.

Mares gave the closing remarks for the panel by adding that today’s youth will have the 

additional advantage of learning from the experiences of their parents as they prepare for 

retirement and make their own financial choices.

Max Schmeiser, Senior Economist, Federal Reserve Board introduced the panel for

“Starting Early for Financial Success” and spoke about the successful call for papers on 

academic research and the future academic symposium on the topic of financial literacy.

Louisa Quittman, Director, Financial Education, U.S. Department of the Treasury

described two research projects recently completed for the Department of the Treasury within the 

Assessing Financial Capability Outcome pilots. The youth pilot assessed the effects of five or six 

hours of classroom financial education and access to a school bank or credit union on fourth- and 

fifth-grade students in two communities. The research found that classroom financial education 

had significant effects on knowledge, and that access to a financial institution and education had 

significant effects on student attitudes and confidence about savings and financial institutions. 

Quittman also described the adult pilot which assessed outcomes from a project to offer low-cost 

checking accounts and one-on-one financial counseling to low-income workers in a transitional 

jobs program. This pilot found that while financially vulnerable adults continued to have 

difficulty maintaining accounts and improving credit scores, they did seek to retain their bank 

accounts, and those who had as little as one or two hours of financial counseling made 

improvements in their past-due debt and planning for the future. Quittman concluded by 

encouraging the FLEC members to use this research, and build on it with additional research on 

similar topics. 

Camille Busette, Assistant Director, Office of Financial Education, Consumer Financial 

Protection Bureau provided an overview of the research the CFPB’s Office of Financial 

Education (OFE) is pursuing to build understanding about the definition of financial wellbeing

and analyze the long-term impact of starting early with financial education programming.

Busette asked what defines successfully pursuing one’s financial goals. She continued that the

OFE is working to answer this question by developing a definition of the concept of individual 

financial wellbeing, developing hypotheses about what contributes to individual financial 

wellbeing, and creating measurement tools for these concepts. The outcomes of this work will 

allow understanding in measuring the success of financial literacy programs. Research currently 

underway by the CFPB defines financial wellbeing as a state wherein one can fully meet current 

and ongoing obligations, has secured the future, and is able to make choices that allow them to 
enjoy life. Allowing personal preferences to enjoy life is particularly notable; as it includes the 

often challenging day-to-day financial decisions and tradeoffs it takes to achieve it.

She mentioned the next phase of work includes developing questions to measure financial 

wellbeing on a scale, and understanding the antecedents to the skills and behavior that young 

people may need to develop to be able to experience financial wellbeing as adults. From a 

broader perspective, she hopes they can use consumer focus groups to understand consumer 

needs, challenges, and experiences in financial decision making, as well as examine the 

effectiveness of existing practices. This work supports the Commission’s focus on youth 

financial literacy by identifying positive habits and behaviors that support financial wellbeing 

and will enable collaboration with stakeholders to prepare young people to be able to succeed 

financially. 

Discussion with FLEC Members:

Quittman spoke of the difficulties of follow-up participation twelve months after the financial 

intervention of the program. She hopes this investigation will open up additional research 

questions and allow FLEC members to integrate programs to help individuals find financial 

success. She noted in the study that counseling was often a means of problem-solving, in 

particular to debt and credit issues, and that this information may offer answers for questions of 

attendance and seeking guidance.

Busette commented on the inundation of marketing and advertising that consumers receive 

versus information about financial literacy and capabilities. She believes financial education can 

target the aspirations of the consumers. Schmeiser added to the topic by talking about the tools 

available to consumers, and thinking and acting like marketers to better reach consumers. 

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

Treasury closed the panel by giving a brief report on the activities and plans for the 

Commission. She hopes the Commission will continue to expand the complex meaning of 

financial capability, to include broader terms than if an individual uses a bank or not. She posed

a call for research endeavors for the Innovation Fund to topics on government payments and 

benefits, higher education decision making, and levering different approaches to build financial 

capability at large. She stated the next meeting will be in the fall, and focus on workplace 

financial opportunities. She introduced Amias Gerety, Acting Assistant Secretary for 

Financial Institutions, U.S. Department of the Treasury, who closed the discussion by 

highlighting the importance of incorporating sound research into program design and policy 

choices.

Committee Members Present

Mary Miller, Department of the Treasury

Melissa Koide, Department of the Treasury

Amias Gerety, Department of the Treasury

Louisa Quittman, Department of the Treasury

Richard Cordray, Consumer Financial Protection Bureau

Camille Busette, Consumer Financial Protection Bureau

Susan Shockey, Department of Agriculture
Brenda McDaniel, Department of Defense

David Soo, Department of Education

Jeannie Chaffin, Department of Health and Human Services

Sandra Norcom, Department of Housing and Urban Development

Judy Mares, Department of Labor

Shonny Ogunfiditimi, Department of Veterans Affairs

Michael Herndon, Commodity Futures Trading Commission

Luke Reynolds, Federal Deposit Insurance Corporation

Gwen Camp, Federal Emergency Management Agency

Anna Alvarez-Boyd, Federal Reserve Board

Ryan Edelstein, General Services Administration

Kenneth Worthy, National Credit Union Administration

Karen Bellesi, Office of the Comptroller of the Currency

Alan Sorcher, Securities and Exchange Commission

Nathaniel Bishop, Small Business Administration

Maria Artista-Cuchna, Social Security Administration